Facebook built one of the most amazing money machines the world has ever seen. Then Apple came and threw a wrench in the gears.
That’s one of the narratives that sprang from last week’s news, when Facebook’s parent company Meta delivered an alarming earnings report to Wall Street, which promptly cut an astonishing $250 billion out of the company’s value in a single day — a 26 percent drop. And there were a lot of narratives.
For a large and vocal group of Facebook haters, the stock crash was a chance to reaffirm your priors: If you thought Facebook was getting comeuppance for creating a toxic product that made the world worse, you could point to its first-ever loss of users. If you thought Mark Zuckerberg’s pivot to a yet-to-exist metaverse is a fantasy, you could point to the $10 billion the company said it sunk into the effort last year. And if you thought TikTok was eating Facebook’s lunch, you could cite Mark Zuckerberg himself, who acknowledged on the company’s earnings call that the video app was “so big as a competitor already, and also continues to grow at quite a fast rate off of a very large base.”
And all of those stories have a degree of truth. But the idea that Apple has hurt Facebook’s revenue in a direct and meaningful way seems the truest: Facebook says changes Apple made that affect how ads work on iOS apps — namely, that it’s now much harder for app-makers and advertisers to track user behavior — will cost it $10 billion in revenue this year. Read more…