Chennai: Facebook’s parent Meta said on Thursday it was a “really important” time for regulations in the technology industry to be reconsidered and rewritten, as the rules governing the Internet not only in Europe but around the world.
The company said in its call with analysts after its first-quarter results that it is working closely with regulators and “to do more with less data” on things like privacy-enhancing technologies.
In a change from its historically disappointing Q4 results, Meta reported that it had added users across the board as daily active users (DAUs) rose 4% to 1.96 billion. Last quarter, the Facebook app alone lost 1 million daily active users.
The company reported revenue of $27.9 billion, as the stock jumped 15.4% in the hours after trading. Revenue grew 7% from the year-ago period.
Meta said that in terms of regional growth, it saw “particular strength in India”, which benefited from a good supply tailwind.
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The social media giant said it expects revenue in the second quarter to be between $28 billion and $30 billion.
Meta’s founder and CEO Mark Zuckerberg said that its three main investment priorities that will drive growth going forward are Instagram Reels, Ads and Metaverse.
“Reel already makes up more than 20% of the time people spend on Instagram,” Zuckerberg said in his opening remarks. “Videos make up 50% of the total time people spend on Facebook, and the reels are growing rapidly there too.”
He said a major change to the feed, which is being curated almost exclusively by a user’s social graph or a follow graph, is now to be more of a user’s feed recommended by AI, regardless of whether the content is from a friend or a follower. Not posted by anyone visiting. ,
“We’re managing headwinds from the changes to the short-form video I just mentioned,” he said. “In the near term this is a drag on revenue as reel monetization is less than feed or stories, but I expect that to improve over time.”
For the Metaverse, Zuckerberg said it’s important to lay the foundation for the next era of social technology and that the centerpiece of the strategy is the social platform that Meta is starting to build with Horizon. There are plans to launch Horizon’s web version later this year, which will make it easier for people to move into Metaverse experiences from too many platforms without even needing a headset, he said.
On the hardware side, Zuckerberg said that Meta Quest 2 remains the leading virtual reality headset. Later this year, he said Meta will release a high-end headset, codenamed Project Cambria, that will be more focused on work use cases and eventually replace a user’s laptop or work setup.
The company said the Digital Markets Act (DMA) could pose significant challenges especially for the industry. It said the final text is yet to be released and be sure to state that the details will matter. “But overall, the regulatory environment is a real challenge for our industry,” said Sheryl Sandberg, Meta’s chief operating officer (COO). “We expect this to be a very challenging time not only for us, but for our entire industry.”
In India, META last year said it would follow the arbitration guidelines announced by the Indian government in February 2021. “Our aim is to comply with the provisions of the IT Rules and continue to discuss some of the issues that need more. India announced these rules to regulate content on social media, making Facebook, WhatsApp and others more accountable to legal requests to swiftly remove posts and share details of where they originated.
Meta also highlighted that it expects the “privacy headwinds from the iOS change” to continue to pose a challenge, which, along with the impact of the war in Ukraine, has been factored into its Q2 outlook. .
In April, Apple released an update for iPhones with a new popup asking users if they wanted to allow apps on their phones to target them for ads. iPhone owners can easily opt-out by tapping the button labeled “Ask App Not to Track.” A feature called App Tracking Transparency (ATT) is posing challenges for companies like Snap and Facebook.
“ATT remains a headwind, but we are also seeing incremental headwinds from iOS 15 and other regulatory changes,” said Chief Financial Officer (CFO) Dave Weiner. “And then, we factored all those headwinds into our Q2 outlook. Of course, any outlook on platform headwinds depends on the platforms themselves and how they write and implement their policies.”
Facebook said it had estimated a $10 billion impact on ATT in the previous quarter. “We believe this is still an order of magnitude over the expected impact. This is not an accurate point estimate and we do not plan to update it,” Weiner added on Thursday.
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