When Facebook changed its algorithm a few years ago after the paralysis of the Cambridge Analytica scandal, many companies which built on Facebook went bankrupt. Today, Apple’s privacy changes in its products are hitting Facebook hard. Yes, Meta (parent company of Facebook, Instagram and WhatsApp) is off by more than 22% in after hours after the company missed earnings targets.
Simply, privacy changes by Apple have allowed users to opt out of having much of their online activity tracked, and that has made it harder for Meta to soup them with ads. With less efficiency, clicks drop and Facebook sees more than $200 billion wiped out in its market value.
You can see why modern digital infrastructure companies in the mobile internet era own the future. Apple’s iOS and Google Android for mobile while Windows rules everything else.
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As that happens, TikTok provides another asymmetric attack from the flanks. TikTok is a key reason the growth on active users has stalled.
Meta’s companies are just visitors in those ecosystems, and that is why Mark Zuckerberg is hoping he can create a new dawn in metaverse with an amalgam of Oculus VR and other things to control one. Possibly, Meta will build the operating system for metaverse so that this risk of changes in Google and Apple will become better managed.
Meta’s stock slumped more than 20% after the Facebook parent company posted disappointing earnings and reported that its number of active users had stalled. Profits dropped 8 percent in the fourth quarter, to $10.3 billion, from a year earlier and the company’s number of monthly users remained static at 2.91 billion, compared with analyst projections of 2.95 billion. Meta said it was being hit by a combination of “headwinds,” including the negative effects of inflation and supply chain problems on advertising spending, and increased competition for users’ time. (LinkedIn News)
People, it is just a click away and the digital animal fades; TikTok ticking!
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Well, for digital native companies, this can also become part of scenario planning, so as to know where or how to pivot when outside forces alter the equilibrium. Amazon is neither dependent on Apple nor Google, yet it’s a great company.
Even when you rely on iOS and Android for access, you can still deliver products users would naturally come for, without needing any intrusive algorithm to coerce or entice them.
After Facebook’s emergence, it became a bad business model to anchor revenues on advertising, Google does it differently, so anyone building a digital native enterprise with no clear monetization policy is just floating around, because once things get boring – you could be out of business.
In all you do, just ensure that there’s something you have control over, in order not to get easily swept away…