17 ms·

Meta Reports Second Quarter 2022 Results

109 points by simonpure 4y ago

oneoff786 4y ago
Results are bad
pclmulqdq 4y ago
Lower revenue than Q2 of 2021 and higher expenses. They're on track to have significantly lower net income this year than last year. Au revoir, Facebook.
- flyinglizard 4y ago
  They are still a very powerful part of interpersonal communication - friends and family. The only way forward is for them to kick out Mark, stop the insanity that is Metaverse, focus on their core and play nice with the platforms and regulators.
  - __derek__ 4y ago
    > The only way forward is for them to kick out Mark It might be hard to convince him to give himself the boot, especially while the company continues to make gobs of money. Maybe we'll see a compromise where the company starts paying a dividend and Zuck shovels the rest of the cash into his passion project.
  - colinmhayes 4y ago
    Mark is unkickable, he has owns the majority of votes. We’re not even close to a world where he kicks himself
    - layer8 4y ago
      He may end up kicking himself in a different way. ;) In any case, it will be interesting to see how the Metaverse thing will eventually perish.
    - pclmulqdq 4y ago
      My guess is that he will resign in shame if the "Metaverse" project doesn't pan out for them, and get replaced by an MBA.
      - colinmhayes 4y ago
        Sure, but he gave himself until 2030 to prove the metaverse.
        oneoff786 4y ago
        That’s a laughably short duration to produce mass appeal VR
      - yuppie_scum 4y ago
        It should be pretty obvious at this point that the man has no shame.
  - pclmulqdq 4y ago
    From a less cynical point of view, they have basically bet the farm on "Metaverse." They can no longer buy out competitors (the FTC will block them), and they need a new monopoly to keep printing money. If they can make even a moderate success out of the metaverse project, they can get out of the hole. If they can make a massive success of the project, they will easily be the new Apple. However, I'm not sure that a recession is the time for a mega-cap company to start spending a lot on a new uncertain project.
    - giantrobot 4y ago
      > If they can make a massive success of the project, they will easily be the new Apple. In what way? If Facebook wanted to replace the iPhone with some "metaverse" device they would need to be able to build a device way more advanced than their current offerings at a price point equal to or less than the iPhone. That means they would need to make up for thousands of person years of engineering, manufacturing, and operations expertise that Apple currently has. You're basically saying "If Facebook could build a copy of Apple from scratch and make some compelling products, they could be the next Apple". Samsung is an industrial behemoth and just keeps up with Apple. Not only is that unlikely it doesn't even sound possible.
      - threeseed 4y ago
        Might want to watch this as it’s quite clear Meta knows exactly what’s required to make the Metaverse a reality. And if they achieve it then it will be a game changer as big as the internet or smart phone. https://youtu.be/2zHDkdkqd1I https://youtu.be/2zHDkdkqd1I
        deltree7 4y ago
        Bingo! I'm always astonished by the amount of cluelessness displayed by HN crowd -- supposedly at the cutting edge of things. Like all other platforms, about 5% of the posters at HN provide extremely valuable content. The rest just parrot current popular pitchfork (anti-capitalism, anti-corporate, anti-advertisments -- stuff that I can get from TikTok in a more entertaining format).
- gigatexal 4y ago
  Yeah as much as I hope they go the way of the dodo I think they're far too big to die soon. MySpace wasn't anywhere close to their size when it died. That being said it doesn't mean we can't hope and pray for such things. ;-)
  - onlyrealcuzzo 4y ago
    Well, the trend is that the successor is worse. Looks at TikTok...
    - gigatexal 4y ago
      True. Unfortunately that’s true.
- baal80spam 4y ago
  Hopefully 'farewell'.
- redmen 4y ago
  Au revoir? Don't think dethroning the lizard king is going to be that easy.
  - daenz 4y ago
    Facebook will die, Meta will live through Instagram and whatever else it can purchase.
  - solarmist 4y ago
    Snarky only comments aren’t in the spirit of HN… That said I laughed out loud to this. I’m not a FB fan because of all the dark patterns. Edit: Added “only”
    - spaceman_2020 4y ago
      - solarmist 4y ago
        It’s not the snarkiness. It can be snarky if it also adds to the conversation. There wasn’t really anything people could say in repose to your comment that was relevant to the topic.
      - threeseed 4y ago
        I do love the idea of computer nerds making fun of the appearance of other nerds.
      - Zuckeralt 4y ago
- civilized 4y ago
  At the current rate of year-over-year decline in operating income, they'll be losing money in two short years. Then they'll be as dead as eternal money-losing cash pit Uber. someone whispers in my ear ... correction, I'm being told Uber is still not dead. I know, I know, I'm as confused as you are.
  - colinmhayes 4y ago
    Revenue only down 1%. Their operating income went down because they hired 20,000 people. They can fire them whenever they want and be right back where they were profit wise. Their content is still free to them unlike Netflix after all.
  - PheonixPharts 4y ago
    > I'm as confused as you are. Don't be, for the last decade or so money has been extremely cheap. For anyone focused on fundamentals many of these companies don't make sense and it all seems eerily similar to the dotcom logic (anyone old enough will remember claims of "new economy" and "things are different"), but for anyone interested in growing their money, spending more than you make while money is essentially free makes a lot of sense. The thing many people still don't understand is that the era of cheap/free money is coming to an end and there is going to be a lot of reality coming to surprise companies that aren't actually able to become profitable in an era without free money. This doesn't just impact companies that currently don't make a profit, but those that make their profits from other companies that don't make a profit. How much AWS is paid for by startups that don't make a profit? How much of meta's ad revenue is ad-spend from companies that don't make a profit? We'll soon be finding out.
- threeseed 4y ago
  > Au revoir, Facebook. Modern day Linux on the Desktop.
  - christophilus 4y ago
    Desktop Linux and non-Facebook user, here. Can confirm.
  - pclmulqdq 4y ago
    Last week, I switched my desktop to Linux. I was pretty bullish on FB (but hated the company) until the whole "Metaverse" thing.
- pavlov 4y ago
  Comparing to 2021 can be misleading because the Covid year was a strange anomaly for digital businesses. That kind of profits may be a long way off for most of them. Meta's operating income (i.e. profit before taxes and interest basically) for this past quarter was $8.3 billion. That's roughly the same as Exxon did in its Q1. "Au revoir" seems premature when they're still raking in that much cash.
  - impulser_ 4y ago
    Also, they run three of the top five most used applications in the world. I love how people keep saying Facebook is dying, yet TikTok still doesn't have as many active users as Facebook, WhatsApp and Instagram. The only application that does is YouTube.
    - pclmulqdq 4y ago
      TikTok is the most used app. It has more users than Facebook, WhatsApp, or Instagram. It doesn't have as many users as the sum of the user totals of the three big Meta apps, but WhatsApp users aren't really monetizable, and there is a lot of overlap between FB users and Insta users now.
      - deleted 4y ago
        [deleted]
      - impulser_ 4y ago
        TikTok has ~1.4 billion monthly active users. Facebook has ~2.9 billion monthly active users. These are stats from Q1 2022.
    - potatolicious 4y ago
      The present state doesn't matter much though? At least, doesn't matter much over the trend. There were also many times more BlackBerries in the world than iPhones in 2009, but the trendline was pretty clear to anyone who was watching, and material reality has caught up to that trend as expected, with BlackBerry being firmly dead and buried. FB's products are trending downwards and TikTok is trending upwards. FB has pulled out the stops to stop the slide but has yet to find success doing so. If FB doesn't arrest the slide from relevance it's only a matter of time until TikTok catches it in absolute terms. The salient question isn't whether or not FB is bigger right now (the answer is unequivocally yes) but whether or not they can halt/reverse the decline of their product.
- kristopolous 4y ago
  The only thing that matters to see their trajectory is their performance with respect to their industry peers. So assuming they're just an online entertainment company, Netflix is higher, Twitter is about the same, Disney is probably on the up, Activision and EA have similar downward trends, so I don't know, might still be too noisy to tell. Personally if I were a betting man I'd be shorting them hard. People are quickly souring on the entire social media industry. There's no reason it had to stay around
  - colinmhayes 4y ago
    Netflix has much bigger problems than Facebook. Meta only has one real competitor right now, and they can easily coexist since they’re both free. Netflix is actively being canibalized by the rest of the media market because it turns out that making tv and movies isn’t a zero marginal cost business and is largely a zero sum game.
- phailhaus 4y ago
  Higher expenses were already expected due to the metaverse play, so I don't think this means that Facebook is really going anywhere.
- spaceman_2020 4y ago
  They’ve deeply embedded themselves into my life because of Whatsapp. Life and work are nearly impossible here without Whatsapp.
  - biorach 4y ago
    Yeah but how much advertising revenue does WhatsApp bring in?
  - brianhorakh 4y ago
    Talk to your friends and family about matrix.org, setup a whatsapp bridge for the laggards.
    - thematrixturtle 4y ago
      Signal is a more realistic compromise.
  - Karrot_Kream 4y ago
    So have the telecom companies. We don't need to downlevel the quality of the site because of it.
  - pclmulqdq 4y ago
    Whatsapp is really deeply embedded in business in Latin America and it's deeply concerning to me. It was already reading your conversations. At best, it's going to start serving ads soon.
    - takanori 4y ago
      How is WhatsApp embedded in business?
      - pclmulqdq 4y ago
        Businesses literally don't have phone numbers that can text or email addresses, but do have WhatsApp. If there was no WhatsApp, the main form of text communication that they use would be gone.
kgraves 4y ago
Great to see the beginning of the end of Meta / Facebook with their first revenue miss. Hopefully their metaverse play is a costly fatal distraction that will ultimately lead them to lose more money while lots of people run away from using their platform. The fact they are ruining their own product [0] to compete with TikTok shows that they have completely run out of ideas. There is no saving Facebook / Meta this time. [0] https://www.washingtonpost.com/technology/2022/07/27/instagram-video-shift-kardashian/ https://www.washingtonpost.com/technology/2022/07/27/instagr...
- throwaway1777 4y ago
  They’re still printing money. It’s hardly the end. People said this about Microsoft for years when they missed mobile, and look at them now.
  - mandeepj 4y ago
    > look at them now "A new CEO" - gave them that much needed new life lease
- alliao 4y ago
  wow is that right, that's gotta be pretty significant. first revenue miss.. gotta happen some time
deleted 4y ago
[deleted]
rvz 4y ago
Like I said before, the premature death of Meta Platforms constantly screamed here and even orchestrated and parroted by the mainstream media, has been greatly exaggerated. Still profitable in a market downturn even with rising inflation fears causing everyone else in big tech to slightly miss expectations. DAUs, MAUs up again and they will be here for another 10+ years like it or not. It's business as usual folks.
- pclmulqdq 4y ago
  The price of the stock is not based on "business as usual." It is based on relentless growth.
  - rvcdbn 4y ago
    with a PE of 13?
    - pclmulqdq 4y ago
      Oh, it's that low? I guess they are priced for "slow decline." For comparison, IBM's P/E ratio was around 10 before the pivot to a consulting company.
- stefan_ 4y ago
  That's nice, but what does the future hold? Companies aren't valued on the here and now. This is after all the company that is betting its future on clown shows like this: https://twitter.com/MetaQuestVR/status/1551943338038726657 https://twitter.com/MetaQuestVR/status/1551943338038726657 It's hard to decide what is the more inept management between the Twitter crypto avatar bros and the meta "meta" verse people.
- UncleMeat 4y ago
  This one will be interesting. On the one hand, still hugely profitable. An operating margin of 29% is insane. On the other hand, people expect growth and no revenue growth and a large drop in income is definitely not what investors want to see.
newfonewhodis 4y ago
https://www.cnbc.com/2022/07/27/facebook-parent-meta-earnings-q2-2022.html https://www.cnbc.com/2022/07/27/facebook-parent-meta-earning... - Earnings: $2.46 per share vs. $2.59 per share expected, according to Refinitiv - Revenue: $28.82 billion vs. $28.94 billion expected, according to Refinitiv - Daily Active Users (DAUs): 1.97 billion vs 1.96 billion expected, according to StreetAccount - Monthly Active Users (MAUs): 2.93 vs 2.94 billion expected, according to StreetAccount - Average Revenue per User (ARPU): $9.82 vs. $9.83 expected, according to StreetAccount
- jstummbillig 4y ago
  Okay at the danger of outing myself as financially incompetent at big company level, the difference seems neglible?
  - pclmulqdq 4y ago
    The part that's missing here is the expenses, which have risen substantially.
  - themanmaran 4y ago
    The market largely agrees with you. With the stock remaining flat over the last month (including today).
    - pclmulqdq 4y ago
      Apparently the market was basically expecting this, and Facebook now is priced like IBM in the early 2000's.
  - alliao 4y ago
    the game is you're supposed to beat analysts figures at the very least. easier when you have headroom or extra trick up your sleeves. I vaguely remember there was a time when facebook was so hot they were able to cook up a nice round figure for revenue or something prior or for IPO. pure flexing.
doubtfuluser 4y ago
I don’t think this is yet the beginning of the end - the company has proven to be resilient in the past (Google+, mobile). But yeah declining MAU from last quarter and overall numbers not too great. Now war-time Zuck will come.
alberth 4y ago
Off topic: I wonder why this is posted from fb.com as opposed to meta.com.
yuppie_scum 4y ago
You hate to see it
mannymanman 4y ago
Ties are back on the menu https://finance.yahoo.com/news/why-mark-zuckerberg-wore-tie-154432560.html https://finance.yahoo.com/news/why-mark-zuckerberg-wore-tie-...
almog 4y ago
Yes, Facebook has weathered past storms by adapting to changes, but anyone using Google+ failure to draw parallels with TikTok, is making a superficial comparison at best. For one, Google+ never matured in terms of user engagement or DAU that interacted with its social feed. It's not Facebook's "war story" but a story of Google's own failure.
decebalus1 4y ago
https://www.theverge.com/23277797/mark-zuckerberg-meta-facebook-employees-pressure https://www.theverge.com/23277797/mark-zuckerberg-meta-faceb... 'Crack' is the sound that is commonly associated with 'a whip'.
alangibson 4y ago
On the metaverse question: does anyone seriously believe Facebook can innovate, let alone build a new industry?
- mwint 4y ago
  I kind of think FB is uniquely positioned to make the metaverse thing work, if it possibly can. I just think it’s unlikely we’ll ever see it catch on, no matter who is pushing it.
  - spaceman_2020 4y ago
    Imagine Facebook comment sections…but in VR. Yikes!
  - alangibson 4y ago
    In terms of market position, you're right. But in terms of creativity and innovation, they've got the algorithmic news feed and little else.
  - kornhole 4y ago
    They have the capital and people. I keep asking people I know if anybody is excited about their metaverse, and only a marketing person told me she was. Their reputation from past behavior is going to make it difficult for people to adopt. I see a big flop, but I have been wrong before.
- Karrot_Kream 4y ago
  They have the cash to make the hardware, the capital-intensive side, work. On the actual product experience I'm unconvinced. But all Meta needs to do is be competitive in the space not win it. If they're in the top-3, that's still a huge revenue generator.
  - alangibson 4y ago
    They changed their name to Meta... They need to win it or become a footnote. The market won't accept them going from a world leader to an also-ran.
cletus 4y ago
Disclaimer: Ex-Facebooker. The first thing to know about Facebook is that they view the social media landscape in two dimensions: format and audience size. Format here means text -> audio -> video. So if you look at the match up between audience of 1:1,000,000 and text you'll find Twitter, for example. This has served FB quite well but what happens after video, if anything? Well, the company believes the next two steps are VR then AR. In this context, the Oculus acquisition makes more sense. Meta is ultimately (IMHO) suffering from a problem similar to what Microsoft had in 2000: it didn't know where to go and lacked leadership and direction. With MS and Netscape, MS really believed they were doing normal MS things until the governmen tintervened and they didn't really know what to do. There have been three big initiatives from the top at FB that IMHO didn't and still don't make sense: 1. In respons eto the misinformation aroundd and subsequent to the 2016 election, FB decided to try and police truth with "fact checking". This is a huge mistake. Nobody is going to be happy. There will always be a line where people disagree. Even in clear cases of false information, as we've seen you're going to still upset a lot of people. This was always a losing strategy; 2. They decided to merge WhatsApp, FB Messenger and IG Direct to try and "win" the US messaging market against iMessage. Years before this there was no concerted effort to merge FB, IG and WA accounts. When asked, Mark said they were differnt ecosystems with different permissions. It didn't make sense to try and unify them. Well that fell by the wayside and angered users in the process; and 3. The Metaverse. Much like VR in general, I don't htink is ever going to be mainstream. It doesn't solve any problem. AR might if we can ever get AR glasses to work but that's a pretty big if. For now, people love their phones. They don't love VR headsets and (again, IMHO) they never will. So now Meta stock has lost half its value. The best performers will be looking at the door. An effort to weed out low performers is going to make things incredibly toxic. It won't weed out bottom performers. It'll weed out those who are the worst at politics because that's what employee calibration is. None of this is address the real problem: leadership. There is no top-level direction (that makes sense). Who you should be looking to lose is 50% of the people from directors right up to Mark's level. ICs and "leaf" managers don't decide company strategy. Direct this at those who do.
- chrisco255 4y ago
  Re: #2, they also decided to merge Facebook with Oculus login, and I still refuse to buy an Oculus for that reason alone. I'm tired of my data being cross analyzed and seeing creepy ads follow me around the internet. Last thing I want to do is plug into some Facebook metaverse where even my eyeball movements are analyzed and processed. As a kid I thought I would love VR. And even as solid as the modern experiences have gotten, spending more than 15 minutes in a headset is nauseating, and there's so much ceremony to get set up and you pretty much are expected to stand while playing. I'd rather veg out on the couch with a PS4 controller, I guess?
tmaly 4y ago
The note on Reality Labs is pretty big in my opinion given the rebranding as Meta.
fleddr 4y ago
As usual, people making a fool out of themselves by confusing "Facebook is no longer cool" with actual value. Half the adults on this planet use a Meta product DAILY, and they added some 3% to it in an incredibly difficult environment. The only interesting thing in the results are the lower ad prices.
- pclmulqdq 4y ago
  The real question is how many of those people are getting off the social networks, which are highly monetized, in exchange for people who are joining WhatsApp, which is nearly un-monetized. If Facebook and Instagram are losing the eyeballs of rich young people, and instead the DAUs are Indians and Latin Americans (as far as I know, these are the demographics on WhatsApp) with a lot less disposable income, those ad dollars are going to run away fast. It looks like that shift has begun to happen, with the reductions in ad prices and the increase in sales expenses for less revenue.
- SilverBirch 4y ago
  I think you're taking this too much at face value. Facebook is no longer cool, sure. But Meta platforms have basically peaked, they aren't adding significant numbers of users, and they're going to struggle to monetize those users due to a number of headwinds - decreased ad spend due to the economic environment, the changes made on iOS, a change app-mix to less monetizable apps (it's harder to monetize Whatsapp vs Instagram), and the fact that they're flat to down in the markets that actually have money (US, Canada, Europe). Meanwhile, their costs are through the roof, they're spending billions on a market segment that may not exist and the executive leadership at the company isn't focused on the core business. Meta just running their social media business would be a good dividend stock. They probably are transitioning away from growth to a mature company and can take a lot of profits off the table. But "Meta we're going to chase another home run" is both not a growth but also a bad mature stock...
- parkingrift 4y ago
  The problem with Meta is they can’t innovate. Facebook, now Meta, have achieved all of their growth through acquisitions. Instagram, WhatsApp, Oculus, and Giphy. The days of Meta making huge acquisitions are over. The world governments aren’t going to allow it. So now Meta will actually have to innovate to compete. And what are they up to? Copying features from TikTok. Losing $2.5 billion per quarter on VR while making little to no progress. WhatsApp is the biggest moat, but it’s also the hardest to monetize, and Meta has given no evidence that they can fend off a challenger without acquiring their way out. Good luck to anyone holding Meta stock. They won’t be able to buy their way out of this, not this time.
hamandcheese 4y ago
Facebook pays a lower effective tax rate than most HN commenters.
- Closi 4y ago
  Well that's probably mostly because the corporate tax rate in the united states is lower than many HN commenters taxes, rather than specific Meta policies. (USA corporate tax rate is 21%, while someone earning $200k in California would pay an effective rate of 33% including Federal, FICA & State taxes). Besides - the effective paid 17% compares favourably with their competitors and others in the space.
- googlryas 4y ago
  Is there a reason corporations even pay taxes, versus just taxing individuals once they get money distributed to them from the corporation?
  - throwaway5959 4y ago
    If that happens I’ll form a corporation, rent forever and have my employer pay my corporation and move to a state without income tax.
    - vineyardmike 4y ago
      Should move to Puerto Rico and avoid federal tax.
    - zeroonetwothree 4y ago
      The corporate income tax rate is already much lower than the top federal rates so you can already benefit from this. Except that you still owe taxes when your corporation gives the money to you (the individual).
  - Closi 4y ago
    > Is there a reason corporations even pay taxes, versus just taxing individuals once they get money distributed to them from the corporation? Yes - because without corporation tax the revenues might get funneled out of the country and taxed elsewhere in tax avoidance schemes (both at the 'corporate' level in foreign-owned businesses, and at the individual level with the ability for the rich to setup shell corps to avoid income tax).
MarcellusDrum 4y ago
Do you think we have already seen peak Facebook? Obviously we can't judge from one bad(?) quarter, but from Meta's desperate attempts to copy Tiktok, I think its a slow decline from here.
- paulpauper 4y ago
  They have Instagram and what's app , too, let's not forget. So it is diversified in that sense.
  - steve_adams_86 4y ago
    It's popular to hate on Meta/Facebook but those acquisitions were very prescient and evidently pure dumb luck, either. The same Zuckerberg is still a directional force now as he was then, so it seems it isn't cut and dry that the company will only trend down from here. The bet on VR seems dubious to me, but I'm getting old and boring. I don't know what anyone likes.
- vineyardmike 4y ago
  Their attempt to copy TikTok is a sign they're still competing - they copied snap and won, so it'd be more concerning if they didn't do it again.
sys_64738 4y ago
Look how many people FB has to support their webpage. Insane.
- Yhippa 4y ago
  It must be mostly backend stuff. It feels like the website itself barely evolved over the past several years.
  - spoils19 4y ago
    It hasn't. Despite having a new fancy framework and some new rewrites, the website is almost exactly the same as 6-7 years ago. I can't name one single meaningful feature added.
    - colinmhayes 4y ago
      Marketplace was a huge add. Was that 6 or 7 years ago now?
- zeroonetwothree 4y ago
  “The bureaucracy is expanding to meet the needs of the expanding bureaucracy.”
rightbyte 4y ago
"Headcount was 83,553 as of June 30, 2022, an increase of 32% year-over-year." Like ... why? They hired 20 000 employees net in a year? And Zuckerberg now somehow says that they need to tighten the belt?
- dralley 4y ago
  Yeah, that casts a very different light over the suggested layoffs.
  - deltree7 4y ago
    It doesn't. Lot's of tech companies over-hired, over-invested both in 1999 and 2021. Can companies be conservative? Yes, but people were also predicting a tech crash in 2010, 2011, 2012....
- antoniuschan99 4y ago
  Thinking they had an aggressive hiring for metaverse
  - mhio 4y ago
    Had a quick check of each q2 report, no figures in 2016 2017 20,658 43% yoy 2018 30,275 47% 2019 39,651 31% 2020 52,534 32% 2021 63,404 21%
    - rightbyte 4y ago
      I wonder how hireing sprees like this effect market wages for programmers? There are about 65000 CS students getting a diploma each year in the US. I wonder how many of FB employees are SWEs.
- snoopy_telex 4y ago
  I have no idea what all those people are actually doing. That seems so heavy a head count for the public end result. Is there a break down somewhere of how many are SWE vs SRE vs support?
t_mann 4y ago
Imho Facebook has entered Nokia territory. Their core products are losing market share, their innovative products (Oculus) are lacking a killer app.
- sparkbII 4y ago
  What did Facebook do to innovate on the Oculus? Oculus Rift was amazing before they sold.
- threeseed 4y ago
  iPhone has been losing market share and never had a killer app. And given the Quest2 has a been a commercial success perhaps like the iPhone there is no one game changing single app but a range of apps and features.
mgl 4y ago
This is likely the peak for facebook, the website. But it may not be a peak for facebook, the company - it is time for a new product. Facebook successfully digested any vital competition in the social media market, the big question is whether they (still) have the innovation gene in their DNA. Alternatively, they could keep acquiring any new emerging social apps like BeReal, especially targeting the youngest people, so the platform can keep the attractive demographics forever.
- civilized 4y ago
  When did they last do innovation? As far as I can tell the site is hardly different from when the Wall / News Feed was invented in... what, 2005? Since then they've made a few minor extensions of the site, a few major acquisitions of competitors, and that's it.
  - rschachte 4y ago
    not sure if you’re just referring to the network itself, but Meta has done a ton of innovation. React, PyTorch, Jest, RocksDB, etc etc. As an app though, no clue. Haven’t had a Facebook account for 6-7 years. Feel like people just have such a poor view of social media now that they are on a downward spiral. Lots of smart people there though, hopefully we can move away from social media and focus on social welfare.
- pclmulqdq 4y ago
  The FTC almost blocked the instagram acquisition. I doubt they would let Meta get away with that trick again.
- specialist 4y ago
  > ...whether they (still) have the innovation gene in their DNA. I attribute many (most?) of Facebook's prior successful pivots to having better intel on emerging products and segments. By using stuff like a VPN product (Onavo?) to surveil their users. How's Facebook going to get that kind of intel now? What's informing Zuck's pivot into VR? Hunches? Reading back issues of Wired and Mondo 2000?
paulpauper 4y ago
Bad..as expected. Meta generates tons of cash though, i think it's cheap, imho
- alexk307 4y ago
  They operate on 30% margins, even a bad quarter or two is worth looking at
clintonwoo 4y ago
I'm guessing they publish their tax rate on the first page to counter criticisms of "big corps that pay no taxes". It's hard to deny that a company cannot grow forever with the same product. There's literally only so many people on Earth. It's not a bad thing for growth to stop. It's a bad thing for your product to offer a sub par user experience though. I think this is where Facebook has suffered as they prioritized metrics and numbers over making a product that people love.
deleted 4y ago
[deleted]
spaceman_2020 4y ago
Guidance is atrocious. While the misses might not look bad in isolation, the overall picture isn’t looking good. The COO just quit after an extremely successful run, guidance is bad, and worst of all, the planned rebranding to Metaverse has been hijacked by crypto bros shilling ponzis on steroids.
- vineyardmike 4y ago
  The overall picture looks promising... except the gov just blocked one of their latest acquisitions, which may mean the end of that. They're best positioned to combat the ATT changes. No one can handle the engineering costs of navigating that and the data limitations as well as them. Their direct response advertising base has no where else to go, snap just proved that. The meta verse re-brand is meant to be forward looking (although IMO not close enough for their needs). They can't grow social media forever - especially as social views of it sour.
- kart23 4y ago
  >hijacked by crypto bros shilling ponzis on steroids wat?
  - zucker_lover 4y ago
    It’s actually spelled “what”, fellow kids
  - spaceman_2020 4y ago
    Go to any crypto tracking website and search for "metaverse". You'll see dozens of projects, all of them trying to create their own "metaverses". Many of these have outsized mindshare among young users (Facebook's target audience) since younger demos have high crypto adoption. Instead of Facebook being the metaverse, its now one of many - most of which are vaporware (which can potentially turn off users from the concept altogether).
cm2012 4y ago
I am very bullish on FB: 1) Founder still has majority voting shares, gives a lot more freedom. 2) I think the Metaverse stuff will pay off in the long run 3) They are making the changes necessary to compete with TikTok. I am buying shares now at this price
- pclmulqdq 4y ago
  Honestly, the whole question with FB stock is whether you believe the Metaverse stuff will pay off. I give them worse than even odds, but better than a 10% chance, to be the ones who get it right.
  - anhncommenter25 4y ago
    They don't necessarily have to get it right. They just have to be geared up enough to fast follow whoever does get it right, or be an enticing M&A partner. My bellwether is how they respond to TikTok. Now with all that said, I think there's a snowball's chance in hell that VR headsets become as ubiquitous as cell phones. It won't happen until AR. It's like TiVo and Netflix.
    - JumpCrisscross 4y ago
      > or be an enticing M&A partner This is probably out of the cards for a generation. (At least in the U.S. and EU.) What Facebook fights with, they'll have to build on their own, a handicap not shared by their peers.
    - epolanski 4y ago
      point is: vr headsets are barely used by vr headesets owners. Them being ubiquitous or not doesn't change how inconvenient it is to not have vision of the surroundings. It's also not practical to use them.
    - jsemrau 4y ago
      Exactly. Minecraft, Fortnite, and Roblox have shown that there is customer demand for Metaverse content. I.e., UGC in 3D. If they execute like Microsoft with the XBOX they will succeed in the long run. But it's a long road.
yuan43 4y ago
> We expect third quarter 2022 total revenue to be in the range of $26-28.5 billion. This outlook reflects a continuation of the weak advertising demand environment we experienced throughout the second quarter, which we believe is being driven by broader macroeconomic uncertainty. ... "Macroeconomic uncertainty" is almost certainly code for "fear about an impending recession." An advertising company like Facebook is especially vulnerable given that ad spending is one of the first things to go when companies start losing customers/revenue/investors in the early phases of a downturn.
debacle 4y ago
I expect Facebook is in a better ARPU position as the ad market continues to implode than Google. I further expect that, as Google becomes more desperate, more users will flock to non-Google products due to the poorer UX on e.g. YouTube. Facebook may have a rough 2022, but I think they will probably be fine.
- rossdavidh 4y ago
  I'm genuinely curious, why would you think FB is in a better position in the ad market than Google? I find it hard to believe that, if forced to cut one or the other from their ad budget, most companies would choose FB ads over Google. But, perhaps I am missing something?
  - debacle 4y ago
    FB ads are higher value, less obtrusive, and despite it's reputation in tech circles, FB has a better reputation with genpop than Google does.

109 points by simonpure 4y ago

Results are bad

Lower revenue than Q2 of 2021 and higher expenses. They're on track to have significantly lower net income this year than last year. Au revoir, Facebook.

flyinglizard 4y ago
They are still a very powerful part of interpersonal communication - friends and family. The only way forward is for them to kick out Mark, stop the insanity that is Metaverse, focus on their core and play nice with the platforms and regulators.
- __derek__ 4y ago
  > The only way forward is for them to kick out Mark It might be hard to convince him to give himself the boot, especially while the company continues to make gobs of money. Maybe we'll see a compromise where the company starts paying a dividend and Zuck shovels the rest of the cash into his passion project.
- colinmhayes 4y ago
  Mark is unkickable, he has owns the majority of votes. We’re not even close to a world where he kicks himself
  - layer8 4y ago
    He may end up kicking himself in a different way. ;) In any case, it will be interesting to see how the Metaverse thing will eventually perish.
  - pclmulqdq 4y ago
    My guess is that he will resign in shame if the "Metaverse" project doesn't pan out for them, and get replaced by an MBA.
    - colinmhayes 4y ago
      Sure, but he gave himself until 2030 to prove the metaverse.
      - oneoff786 4y ago
        That’s a laughably short duration to produce mass appeal VR
    - yuppie_scum 4y ago
      It should be pretty obvious at this point that the man has no shame.
- pclmulqdq 4y ago
  From a less cynical point of view, they have basically bet the farm on "Metaverse." They can no longer buy out competitors (the FTC will block them), and they need a new monopoly to keep printing money. If they can make even a moderate success out of the metaverse project, they can get out of the hole. If they can make a massive success of the project, they will easily be the new Apple. However, I'm not sure that a recession is the time for a mega-cap company to start spending a lot on a new uncertain project.
  - giantrobot 4y ago
    > If they can make a massive success of the project, they will easily be the new Apple. In what way? If Facebook wanted to replace the iPhone with some "metaverse" device they would need to be able to build a device way more advanced than their current offerings at a price point equal to or less than the iPhone. That means they would need to make up for thousands of person years of engineering, manufacturing, and operations expertise that Apple currently has. You're basically saying "If Facebook could build a copy of Apple from scratch and make some compelling products, they could be the next Apple". Samsung is an industrial behemoth and just keeps up with Apple. Not only is that unlikely it doesn't even sound possible.
    - threeseed 4y ago
      Might want to watch this as it’s quite clear Meta knows exactly what’s required to make the Metaverse a reality. And if they achieve it then it will be a game changer as big as the internet or smart phone. https://youtu.be/2zHDkdkqd1I https://youtu.be/2zHDkdkqd1I
      - deltree7 4y ago
        Bingo! I'm always astonished by the amount of cluelessness displayed by HN crowd -- supposedly at the cutting edge of things. Like all other platforms, about 5% of the posters at HN provide extremely valuable content. The rest just parrot current popular pitchfork (anti-capitalism, anti-corporate, anti-advertisments -- stuff that I can get from TikTok in a more entertaining format).
gigatexal 4y ago
Yeah as much as I hope they go the way of the dodo I think they're far too big to die soon. MySpace wasn't anywhere close to their size when it died. That being said it doesn't mean we can't hope and pray for such things. ;-)
- onlyrealcuzzo 4y ago
  Well, the trend is that the successor is worse. Looks at TikTok...
  - gigatexal 4y ago
    True. Unfortunately that’s true.
baal80spam 4y ago
Hopefully 'farewell'.
redmen 4y ago
Au revoir? Don't think dethroning the lizard king is going to be that easy.
- daenz 4y ago
  Facebook will die, Meta will live through Instagram and whatever else it can purchase.
- solarmist 4y ago
  Snarky only comments aren’t in the spirit of HN… That said I laughed out loud to this. I’m not a FB fan because of all the dark patterns. Edit: Added “only”
  - spaceman_2020 4y ago
    - solarmist 4y ago
      It’s not the snarkiness. It can be snarky if it also adds to the conversation. There wasn’t really anything people could say in repose to your comment that was relevant to the topic.
    - threeseed 4y ago
      I do love the idea of computer nerds making fun of the appearance of other nerds.
    - Zuckeralt 4y ago
civilized 4y ago
At the current rate of year-over-year decline in operating income, they'll be losing money in two short years. Then they'll be as dead as eternal money-losing cash pit Uber. someone whispers in my ear ... correction, I'm being told Uber is still not dead. I know, I know, I'm as confused as you are.
- colinmhayes 4y ago
  Revenue only down 1%. Their operating income went down because they hired 20,000 people. They can fire them whenever they want and be right back where they were profit wise. Their content is still free to them unlike Netflix after all.
- PheonixPharts 4y ago
  > I'm as confused as you are. Don't be, for the last decade or so money has been extremely cheap. For anyone focused on fundamentals many of these companies don't make sense and it all seems eerily similar to the dotcom logic (anyone old enough will remember claims of "new economy" and "things are different"), but for anyone interested in growing their money, spending more than you make while money is essentially free makes a lot of sense. The thing many people still don't understand is that the era of cheap/free money is coming to an end and there is going to be a lot of reality coming to surprise companies that aren't actually able to become profitable in an era without free money. This doesn't just impact companies that currently don't make a profit, but those that make their profits from other companies that don't make a profit. How much AWS is paid for by startups that don't make a profit? How much of meta's ad revenue is ad-spend from companies that don't make a profit? We'll soon be finding out.
threeseed 4y ago
> Au revoir, Facebook. Modern day Linux on the Desktop.
- christophilus 4y ago
  Desktop Linux and non-Facebook user, here. Can confirm.
- pclmulqdq 4y ago
  Last week, I switched my desktop to Linux. I was pretty bullish on FB (but hated the company) until the whole "Metaverse" thing.
pavlov 4y ago
Comparing to 2021 can be misleading because the Covid year was a strange anomaly for digital businesses. That kind of profits may be a long way off for most of them. Meta's operating income (i.e. profit before taxes and interest basically) for this past quarter was $8.3 billion. That's roughly the same as Exxon did in its Q1. "Au revoir" seems premature when they're still raking in that much cash.
- impulser_ 4y ago
  Also, they run three of the top five most used applications in the world. I love how people keep saying Facebook is dying, yet TikTok still doesn't have as many active users as Facebook, WhatsApp and Instagram. The only application that does is YouTube.
  - pclmulqdq 4y ago
    TikTok is the most used app. It has more users than Facebook, WhatsApp, or Instagram. It doesn't have as many users as the sum of the user totals of the three big Meta apps, but WhatsApp users aren't really monetizable, and there is a lot of overlap between FB users and Insta users now.
    - deleted 4y ago
      [deleted]
    - impulser_ 4y ago
      TikTok has ~1.4 billion monthly active users. Facebook has ~2.9 billion monthly active users. These are stats from Q1 2022.
  - potatolicious 4y ago
    The present state doesn't matter much though? At least, doesn't matter much over the trend. There were also many times more BlackBerries in the world than iPhones in 2009, but the trendline was pretty clear to anyone who was watching, and material reality has caught up to that trend as expected, with BlackBerry being firmly dead and buried. FB's products are trending downwards and TikTok is trending upwards. FB has pulled out the stops to stop the slide but has yet to find success doing so. If FB doesn't arrest the slide from relevance it's only a matter of time until TikTok catches it in absolute terms. The salient question isn't whether or not FB is bigger right now (the answer is unequivocally yes) but whether or not they can halt/reverse the decline of their product.
kristopolous 4y ago
The only thing that matters to see their trajectory is their performance with respect to their industry peers. So assuming they're just an online entertainment company, Netflix is higher, Twitter is about the same, Disney is probably on the up, Activision and EA have similar downward trends, so I don't know, might still be too noisy to tell. Personally if I were a betting man I'd be shorting them hard. People are quickly souring on the entire social media industry. There's no reason it had to stay around
- colinmhayes 4y ago
  Netflix has much bigger problems than Facebook. Meta only has one real competitor right now, and they can easily coexist since they’re both free. Netflix is actively being canibalized by the rest of the media market because it turns out that making tv and movies isn’t a zero marginal cost business and is largely a zero sum game.
phailhaus 4y ago
Higher expenses were already expected due to the metaverse play, so I don't think this means that Facebook is really going anywhere.
spaceman_2020 4y ago
They’ve deeply embedded themselves into my life because of Whatsapp. Life and work are nearly impossible here without Whatsapp.
- biorach 4y ago
  Yeah but how much advertising revenue does WhatsApp bring in?
- brianhorakh 4y ago
  Talk to your friends and family about matrix.org, setup a whatsapp bridge for the laggards.
  - thematrixturtle 4y ago
    Signal is a more realistic compromise.
- Karrot_Kream 4y ago
  So have the telecom companies. We don't need to downlevel the quality of the site because of it.
- pclmulqdq 4y ago
  Whatsapp is really deeply embedded in business in Latin America and it's deeply concerning to me. It was already reading your conversations. At best, it's going to start serving ads soon.
  - takanori 4y ago
    How is WhatsApp embedded in business?
    - pclmulqdq 4y ago
      Businesses literally don't have phone numbers that can text or email addresses, but do have WhatsApp. If there was no WhatsApp, the main form of text communication that they use would be gone.

kgraves 4y ago

Great to see the beginning of the end of Meta / Facebook with their first revenue miss. Hopefully their metaverse play is a costly fatal distraction that will ultimately lead them to lose more money while lots of people run away from using their platform. The fact they are ruining their own product [0] to compete with TikTok shows that they have completely run out of ideas. There is no saving Facebook / Meta this time. [0] https://www.washingtonpost.com/technology/2022/07/27/instagram-video-shift-kardashian/ https://www.washingtonpost.com/technology/2022/07/27/instagr...

throwaway1777 4y ago
They’re still printing money. It’s hardly the end. People said this about Microsoft for years when they missed mobile, and look at them now.
- mandeepj 4y ago
  > look at them now "A new CEO" - gave them that much needed new life lease
alliao 4y ago
wow is that right, that's gotta be pretty significant. first revenue miss.. gotta happen some time

deleted 4y ago

[deleted]

rvz 4y ago

Like I said before, the premature death of Meta Platforms constantly screamed here and even orchestrated and parroted by the mainstream media, has been greatly exaggerated. Still profitable in a market downturn even with rising inflation fears causing everyone else in big tech to slightly miss expectations. DAUs, MAUs up again and they will be here for another 10+ years like it or not. It's business as usual folks.

pclmulqdq 4y ago
The price of the stock is not based on "business as usual." It is based on relentless growth.
- rvcdbn 4y ago
  with a PE of 13?
  - pclmulqdq 4y ago
    Oh, it's that low? I guess they are priced for "slow decline." For comparison, IBM's P/E ratio was around 10 before the pivot to a consulting company.
stefan_ 4y ago
That's nice, but what does the future hold? Companies aren't valued on the here and now. This is after all the company that is betting its future on clown shows like this: https://twitter.com/MetaQuestVR/status/1551943338038726657 https://twitter.com/MetaQuestVR/status/1551943338038726657 It's hard to decide what is the more inept management between the Twitter crypto avatar bros and the meta "meta" verse people.
UncleMeat 4y ago
This one will be interesting. On the one hand, still hugely profitable. An operating margin of 29% is insane. On the other hand, people expect growth and no revenue growth and a large drop in income is definitely not what investors want to see.

newfonewhodis 4y ago

https://www.cnbc.com/2022/07/27/facebook-parent-meta-earnings-q2-2022.html https://www.cnbc.com/2022/07/27/facebook-parent-meta-earning... - Earnings: $2.46 per share vs. $2.59 per share expected, according to Refinitiv - Revenue: $28.82 billion vs. $28.94 billion expected, according to Refinitiv - Daily Active Users (DAUs): 1.97 billion vs 1.96 billion expected, according to StreetAccount - Monthly Active Users (MAUs): 2.93 vs 2.94 billion expected, according to StreetAccount - Average Revenue per User (ARPU): $9.82 vs. $9.83 expected, according to StreetAccount

jstummbillig 4y ago
Okay at the danger of outing myself as financially incompetent at big company level, the difference seems neglible?
- pclmulqdq 4y ago
  The part that's missing here is the expenses, which have risen substantially.
- themanmaran 4y ago
  The market largely agrees with you. With the stock remaining flat over the last month (including today).
  - pclmulqdq 4y ago
    Apparently the market was basically expecting this, and Facebook now is priced like IBM in the early 2000's.
- alliao 4y ago
  the game is you're supposed to beat analysts figures at the very least. easier when you have headroom or extra trick up your sleeves. I vaguely remember there was a time when facebook was so hot they were able to cook up a nice round figure for revenue or something prior or for IPO. pure flexing.

doubtfuluser 4y ago

I don’t think this is yet the beginning of the end - the company has proven to be resilient in the past (Google+, mobile). But yeah declining MAU from last quarter and overall numbers not too great. Now war-time Zuck will come.

alberth 4y ago

Off topic: I wonder why this is posted from fb.com as opposed to meta.com.

yuppie_scum 4y ago

You hate to see it

mannymanman 4y ago

Ties are back on the menu https://finance.yahoo.com/news/why-mark-zuckerberg-wore-tie-154432560.html https://finance.yahoo.com/news/why-mark-zuckerberg-wore-tie-...

almog 4y ago

Yes, Facebook has weathered past storms by adapting to changes, but anyone using Google+ failure to draw parallels with TikTok, is making a superficial comparison at best. For one, Google+ never matured in terms of user engagement or DAU that interacted with its social feed. It's not Facebook's "war story" but a story of Google's own failure.

decebalus1 4y ago

https://www.theverge.com/23277797/mark-zuckerberg-meta-facebook-employees-pressure https://www.theverge.com/23277797/mark-zuckerberg-meta-faceb... 'Crack' is the sound that is commonly associated with 'a whip'.

alangibson 4y ago

On the metaverse question: does anyone seriously believe Facebook can innovate, let alone build a new industry?

mwint 4y ago
I kind of think FB is uniquely positioned to make the metaverse thing work, if it possibly can. I just think it’s unlikely we’ll ever see it catch on, no matter who is pushing it.
- spaceman_2020 4y ago
  Imagine Facebook comment sections…but in VR. Yikes!
- alangibson 4y ago
  In terms of market position, you're right. But in terms of creativity and innovation, they've got the algorithmic news feed and little else.
- kornhole 4y ago
  They have the capital and people. I keep asking people I know if anybody is excited about their metaverse, and only a marketing person told me she was. Their reputation from past behavior is going to make it difficult for people to adopt. I see a big flop, but I have been wrong before.
Karrot_Kream 4y ago
They have the cash to make the hardware, the capital-intensive side, work. On the actual product experience I'm unconvinced. But all Meta needs to do is be competitive in the space not win it. If they're in the top-3, that's still a huge revenue generator.
- alangibson 4y ago
  They changed their name to Meta... They need to win it or become a footnote. The market won't accept them going from a world leader to an also-ran.

cletus 4y ago

Disclaimer: Ex-Facebooker. The first thing to know about Facebook is that they view the social media landscape in two dimensions: format and audience size. Format here means text -> audio -> video. So if you look at the match up between audience of 1:1,000,000 and text you'll find Twitter, for example. This has served FB quite well but what happens after video, if anything? Well, the company believes the next two steps are VR then AR. In this context, the Oculus acquisition makes more sense. Meta is ultimately (IMHO) suffering from a problem similar to what Microsoft had in 2000: it didn't know where to go and lacked leadership and direction. With MS and Netscape, MS really believed they were doing normal MS things until the governmen tintervened and they didn't really know what to do. There have been three big initiatives from the top at FB that IMHO didn't and still don't make sense: 1. In respons eto the misinformation aroundd and subsequent to the 2016 election, FB decided to try and police truth with "fact checking". This is a huge mistake. Nobody is going to be happy. There will always be a line where people disagree. Even in clear cases of false information, as we've seen you're going to still upset a lot of people. This was always a losing strategy; 2. They decided to merge WhatsApp, FB Messenger and IG Direct to try and "win" the US messaging market against iMessage. Years before this there was no concerted effort to merge FB, IG and WA accounts. When asked, Mark said they were differnt ecosystems with different permissions. It didn't make sense to try and unify them. Well that fell by the wayside and angered users in the process; and 3. The Metaverse. Much like VR in general, I don't htink is ever going to be mainstream. It doesn't solve any problem. AR might if we can ever get AR glasses to work but that's a pretty big if. For now, people love their phones. They don't love VR headsets and (again, IMHO) they never will. So now Meta stock has lost half its value. The best performers will be looking at the door. An effort to weed out low performers is going to make things incredibly toxic. It won't weed out bottom performers. It'll weed out those who are the worst at politics because that's what employee calibration is. None of this is address the real problem: leadership. There is no top-level direction (that makes sense). Who you should be looking to lose is 50% of the people from directors right up to Mark's level. ICs and "leaf" managers don't decide company strategy. Direct this at those who do.

chrisco255 4y ago
Re: #2, they also decided to merge Facebook with Oculus login, and I still refuse to buy an Oculus for that reason alone. I'm tired of my data being cross analyzed and seeing creepy ads follow me around the internet. Last thing I want to do is plug into some Facebook metaverse where even my eyeball movements are analyzed and processed. As a kid I thought I would love VR. And even as solid as the modern experiences have gotten, spending more than 15 minutes in a headset is nauseating, and there's so much ceremony to get set up and you pretty much are expected to stand while playing. I'd rather veg out on the couch with a PS4 controller, I guess?

tmaly 4y ago

The note on Reality Labs is pretty big in my opinion given the rebranding as Meta.

fleddr 4y ago

As usual, people making a fool out of themselves by confusing "Facebook is no longer cool" with actual value. Half the adults on this planet use a Meta product DAILY, and they added some 3% to it in an incredibly difficult environment. The only interesting thing in the results are the lower ad prices.

pclmulqdq 4y ago
The real question is how many of those people are getting off the social networks, which are highly monetized, in exchange for people who are joining WhatsApp, which is nearly un-monetized. If Facebook and Instagram are losing the eyeballs of rich young people, and instead the DAUs are Indians and Latin Americans (as far as I know, these are the demographics on WhatsApp) with a lot less disposable income, those ad dollars are going to run away fast. It looks like that shift has begun to happen, with the reductions in ad prices and the increase in sales expenses for less revenue.
SilverBirch 4y ago
I think you're taking this too much at face value. Facebook is no longer cool, sure. But Meta platforms have basically peaked, they aren't adding significant numbers of users, and they're going to struggle to monetize those users due to a number of headwinds - decreased ad spend due to the economic environment, the changes made on iOS, a change app-mix to less monetizable apps (it's harder to monetize Whatsapp vs Instagram), and the fact that they're flat to down in the markets that actually have money (US, Canada, Europe). Meanwhile, their costs are through the roof, they're spending billions on a market segment that may not exist and the executive leadership at the company isn't focused on the core business. Meta just running their social media business would be a good dividend stock. They probably are transitioning away from growth to a mature company and can take a lot of profits off the table. But "Meta we're going to chase another home run" is both not a growth but also a bad mature stock...
parkingrift 4y ago
The problem with Meta is they can’t innovate. Facebook, now Meta, have achieved all of their growth through acquisitions. Instagram, WhatsApp, Oculus, and Giphy. The days of Meta making huge acquisitions are over. The world governments aren’t going to allow it. So now Meta will actually have to innovate to compete. And what are they up to? Copying features from TikTok. Losing $2.5 billion per quarter on VR while making little to no progress. WhatsApp is the biggest moat, but it’s also the hardest to monetize, and Meta has given no evidence that they can fend off a challenger without acquiring their way out. Good luck to anyone holding Meta stock. They won’t be able to buy their way out of this, not this time.

hamandcheese 4y ago

Facebook pays a lower effective tax rate than most HN commenters.

Closi 4y ago
Well that's probably mostly because the corporate tax rate in the united states is lower than many HN commenters taxes, rather than specific Meta policies. (USA corporate tax rate is 21%, while someone earning $200k in California would pay an effective rate of 33% including Federal, FICA & State taxes). Besides - the effective paid 17% compares favourably with their competitors and others in the space.
googlryas 4y ago
Is there a reason corporations even pay taxes, versus just taxing individuals once they get money distributed to them from the corporation?
- throwaway5959 4y ago
  If that happens I’ll form a corporation, rent forever and have my employer pay my corporation and move to a state without income tax.
  - vineyardmike 4y ago
    Should move to Puerto Rico and avoid federal tax.
  - zeroonetwothree 4y ago
    The corporate income tax rate is already much lower than the top federal rates so you can already benefit from this. Except that you still owe taxes when your corporation gives the money to you (the individual).
- Closi 4y ago
  > Is there a reason corporations even pay taxes, versus just taxing individuals once they get money distributed to them from the corporation? Yes - because without corporation tax the revenues might get funneled out of the country and taxed elsewhere in tax avoidance schemes (both at the 'corporate' level in foreign-owned businesses, and at the individual level with the ability for the rich to setup shell corps to avoid income tax).

MarcellusDrum 4y ago

Do you think we have already seen peak Facebook? Obviously we can't judge from one bad(?) quarter, but from Meta's desperate attempts to copy Tiktok, I think its a slow decline from here.

paulpauper 4y ago
They have Instagram and what's app , too, let's not forget. So it is diversified in that sense.
- steve_adams_86 4y ago
  It's popular to hate on Meta/Facebook but those acquisitions were very prescient and evidently pure dumb luck, either. The same Zuckerberg is still a directional force now as he was then, so it seems it isn't cut and dry that the company will only trend down from here. The bet on VR seems dubious to me, but I'm getting old and boring. I don't know what anyone likes.
vineyardmike 4y ago
Their attempt to copy TikTok is a sign they're still competing - they copied snap and won, so it'd be more concerning if they didn't do it again.

sys_64738 4y ago

Look how many people FB has to support their webpage. Insane.

Yhippa 4y ago
It must be mostly backend stuff. It feels like the website itself barely evolved over the past several years.
- spoils19 4y ago
  It hasn't. Despite having a new fancy framework and some new rewrites, the website is almost exactly the same as 6-7 years ago. I can't name one single meaningful feature added.
  - colinmhayes 4y ago
    Marketplace was a huge add. Was that 6 or 7 years ago now?
zeroonetwothree 4y ago
“The bureaucracy is expanding to meet the needs of the expanding bureaucracy.”

rightbyte 4y ago

"Headcount was 83,553 as of June 30, 2022, an increase of 32% year-over-year." Like ... why? They hired 20 000 employees net in a year? And Zuckerberg now somehow says that they need to tighten the belt?

dralley 4y ago
Yeah, that casts a very different light over the suggested layoffs.
- deltree7 4y ago
  It doesn't. Lot's of tech companies over-hired, over-invested both in 1999 and 2021. Can companies be conservative? Yes, but people were also predicting a tech crash in 2010, 2011, 2012....
antoniuschan99 4y ago
Thinking they had an aggressive hiring for metaverse
- mhio 4y ago
  Had a quick check of each q2 report, no figures in 2016 2017 20,658 43% yoy 2018 30,275 47% 2019 39,651 31% 2020 52,534 32% 2021 63,404 21%
  - rightbyte 4y ago
    I wonder how hireing sprees like this effect market wages for programmers? There are about 65000 CS students getting a diploma each year in the US. I wonder how many of FB employees are SWEs.
snoopy_telex 4y ago
I have no idea what all those people are actually doing. That seems so heavy a head count for the public end result. Is there a break down somewhere of how many are SWE vs SRE vs support?

t_mann 4y ago

Imho Facebook has entered Nokia territory. Their core products are losing market share, their innovative products (Oculus) are lacking a killer app.

sparkbII 4y ago
What did Facebook do to innovate on the Oculus? Oculus Rift was amazing before they sold.
threeseed 4y ago
iPhone has been losing market share and never had a killer app. And given the Quest2 has a been a commercial success perhaps like the iPhone there is no one game changing single app but a range of apps and features.

mgl 4y ago

This is likely the peak for facebook, the website. But it may not be a peak for facebook, the company - it is time for a new product. Facebook successfully digested any vital competition in the social media market, the big question is whether they (still) have the innovation gene in their DNA. Alternatively, they could keep acquiring any new emerging social apps like BeReal, especially targeting the youngest people, so the platform can keep the attractive demographics forever.

civilized 4y ago
When did they last do innovation? As far as I can tell the site is hardly different from when the Wall / News Feed was invented in... what, 2005? Since then they've made a few minor extensions of the site, a few major acquisitions of competitors, and that's it.
- rschachte 4y ago
  not sure if you’re just referring to the network itself, but Meta has done a ton of innovation. React, PyTorch, Jest, RocksDB, etc etc. As an app though, no clue. Haven’t had a Facebook account for 6-7 years. Feel like people just have such a poor view of social media now that they are on a downward spiral. Lots of smart people there though, hopefully we can move away from social media and focus on social welfare.
pclmulqdq 4y ago
The FTC almost blocked the instagram acquisition. I doubt they would let Meta get away with that trick again.
specialist 4y ago
> ...whether they (still) have the innovation gene in their DNA. I attribute many (most?) of Facebook's prior successful pivots to having better intel on emerging products and segments. By using stuff like a VPN product (Onavo?) to surveil their users. How's Facebook going to get that kind of intel now? What's informing Zuck's pivot into VR? Hunches? Reading back issues of Wired and Mondo 2000?

paulpauper 4y ago

Bad..as expected. Meta generates tons of cash though, i think it's cheap, imho

alexk307 4y ago
They operate on 30% margins, even a bad quarter or two is worth looking at

clintonwoo 4y ago

I'm guessing they publish their tax rate on the first page to counter criticisms of "big corps that pay no taxes". It's hard to deny that a company cannot grow forever with the same product. There's literally only so many people on Earth. It's not a bad thing for growth to stop. It's a bad thing for your product to offer a sub par user experience though. I think this is where Facebook has suffered as they prioritized metrics and numbers over making a product that people love.

deleted 4y ago

[deleted]

spaceman_2020 4y ago

Guidance is atrocious. While the misses might not look bad in isolation, the overall picture isn’t looking good. The COO just quit after an extremely successful run, guidance is bad, and worst of all, the planned rebranding to Metaverse has been hijacked by crypto bros shilling ponzis on steroids.

vineyardmike 4y ago
The overall picture looks promising... except the gov just blocked one of their latest acquisitions, which may mean the end of that. They're best positioned to combat the ATT changes. No one can handle the engineering costs of navigating that and the data limitations as well as them. Their direct response advertising base has no where else to go, snap just proved that. The meta verse re-brand is meant to be forward looking (although IMO not close enough for their needs). They can't grow social media forever - especially as social views of it sour.
kart23 4y ago
>hijacked by crypto bros shilling ponzis on steroids wat?
- zucker_lover 4y ago
  It’s actually spelled “what”, fellow kids
- spaceman_2020 4y ago
  Go to any crypto tracking website and search for "metaverse". You'll see dozens of projects, all of them trying to create their own "metaverses". Many of these have outsized mindshare among young users (Facebook's target audience) since younger demos have high crypto adoption. Instead of Facebook being the metaverse, its now one of many - most of which are vaporware (which can potentially turn off users from the concept altogether).

cm2012 4y ago

I am very bullish on FB: 1) Founder still has majority voting shares, gives a lot more freedom. 2) I think the Metaverse stuff will pay off in the long run 3) They are making the changes necessary to compete with TikTok. I am buying shares now at this price

pclmulqdq 4y ago
Honestly, the whole question with FB stock is whether you believe the Metaverse stuff will pay off. I give them worse than even odds, but better than a 10% chance, to be the ones who get it right.
- anhncommenter25 4y ago
  They don't necessarily have to get it right. They just have to be geared up enough to fast follow whoever does get it right, or be an enticing M&A partner. My bellwether is how they respond to TikTok. Now with all that said, I think there's a snowball's chance in hell that VR headsets become as ubiquitous as cell phones. It won't happen until AR. It's like TiVo and Netflix.
  - JumpCrisscross 4y ago
    > or be an enticing M&A partner This is probably out of the cards for a generation. (At least in the U.S. and EU.) What Facebook fights with, they'll have to build on their own, a handicap not shared by their peers.
  - epolanski 4y ago
    point is: vr headsets are barely used by vr headesets owners. Them being ubiquitous or not doesn't change how inconvenient it is to not have vision of the surroundings. It's also not practical to use them.
  - jsemrau 4y ago
    Exactly. Minecraft, Fortnite, and Roblox have shown that there is customer demand for Metaverse content. I.e., UGC in 3D. If they execute like Microsoft with the XBOX they will succeed in the long run. But it's a long road.

yuan43 4y ago

> We expect third quarter 2022 total revenue to be in the range of $26-28.5 billion. This outlook reflects a continuation of the weak advertising demand environment we experienced throughout the second quarter, which we believe is being driven by broader macroeconomic uncertainty. ... "Macroeconomic uncertainty" is almost certainly code for "fear about an impending recession." An advertising company like Facebook is especially vulnerable given that ad spending is one of the first things to go when companies start losing customers/revenue/investors in the early phases of a downturn.

debacle 4y ago

I expect Facebook is in a better ARPU position as the ad market continues to implode than Google. I further expect that, as Google becomes more desperate, more users will flock to non-Google products due to the poorer UX on e.g. YouTube. Facebook may have a rough 2022, but I think they will probably be fine.

rossdavidh 4y ago
I'm genuinely curious, why would you think FB is in a better position in the ad market than Google? I find it hard to believe that, if forced to cut one or the other from their ad budget, most companies would choose FB ads over Google. But, perhaps I am missing something?
- debacle 4y ago
  FB ads are higher value, less obtrusive, and despite it's reputation in tech circles, FB has a better reputation with genpop than Google does.