Changes made to iOS have caused a big headache for Meta.
Facebook is not what it once was. The social media company grabbed headlines recently after its parent company Meta announced its latest financial results. These results were surprisingly bad, so much so that its share price dropped 26 percent on Thursday. This wiped about $220 billion off Meta’s market value, making it the biggest single-day loss in market value in history for a US company.
Mark Zuckerberg was estimated to have faced a $31 billion drop in his personal wealth, as the co-founder of Facebook owns 14.2 percent of the company. Zuckerberg blamed “headwinds” from Apple in an earnings call with investors this week as big tech rival Apple is causing a lot of pain for the social media giant.
This is due to changes Apple has made to iOS that affects Meta’s revenue model which depends on online advertising. The changes mean advertisers now have a harder time tracking the effectiveness of ads which hampers their ability to target ads. Meta has said that these changes made by Apple could affect it “in the order of $10bn” this year.
“We believe the impact of iOS overall is a headwind on our business in 2022,” Meta’s chief financial officer Dave Wehner said during an earnings call on Wednesday, reports The Guardian.
Apple CEO Tim Cook has been vocal in marketing Apple as a champion of privacy, using this aspect as a way of differentiating it from its Silicon Valley rivals such as Google and Facebook which both hoard user data to sell to advertisers. Mark Zuckerberg and Cook have been at odds for months over Apple’s decision to change the operating system an enormous number of people use via iPhones and iPads. Apple’s privacy settings allow these users to stop apps from tracking their online activity for advertising use. A majority of iOS users have used this feature to opt out of this tracking.
This adds to Meta’s woes as it also recorded a $10.2 billion operating loss in its Reality Labs division. The augmented and virtual reality division is a passion project for Zuckerberg as the Facebook creator is a champion of the Metaverse concept.
Facebook is also facing intense competition from the likes of TikTok and Snap in the attention economy as these rivals are proving more popular with younger users.
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