TikTok’s U.S user growth is stagnating due to rising competition from Instagram Reels, bad reception of its bet on e-commerce and expiry of its music deal with Universal, the Wall Street Journal reported, citing people familiar with the matter.
According the the said people, TikTok is still gaining users but the number of users quitting has risen to a point where its user growth has stagnated.
Last month, Universal moved many of its artists’ promotional campaigns from TikTok to Instagram after it couldn’t agree on how much to pay artists.
Wells Fargo Securities analyst Ken Gawrelski said Meta is now more of a content recommendation engine than a social network.
He pointed out that its share of e-commerce ad spent rose from 25% in 2022 to 31% in 2023 and that it has gained back the share of engagement that it lost to TikTok in 2021 and 2022.
“What we’ve seen over the last couple years, and this really manifests itself in the back half of 23’ and continuing to 24’, is Meta has rebuilt its Signals,” said Gawrelski
Temu plans to reduce its reliance on the U.S market as scrutiny from the U.S lawmakers intensifies, the Information reported citing people familiar with the matter.
The Chinese e-commerce platform wants to reduce its U.S share of total merchandise sales to 25% by 2025 from the current 60%.
“We’re seeing excellent consumer feedback and strong customer retention in the U.S., and we’ll increase investment even further in 2024,” a Temu spokesperson said in a statement.
The Wall Street Journal reported early this month that Temu spent around $2 billion on advertisements last year at Meta.
However, a Temu spokesperson denied the $2 billion figure but failed to disclose the company’s spending levels on advertisement at Meta Platforms.
Some advertisers have noticed that Meta’s ad system has been faltering in the last two months.
The ad buyers note that the cost of advertising in Meta Platforms is up significantly while results are mixed.
“Our ads system is working as expected for the vast majority of advertisers,” a Meta spokesperson said in a statement. “We recently fixed a few technical issues and are researching a small amount of additional reports from advertisers to ensure the best possible results for businesses using our apps.”
As a result, some ad buyers have shifted budgets to TikTok and Alphabet.
Temu, one of Meta’s largest advertisers said it hasn’t notice any advertising issues with Meta.
Meta is shutting down Workplace in order to focus on AI and Metaverse.
“We are discontinuing Workplace from Meta so we can focus on building AI and metaverse technologies that we believe will fundamentally reshape the way we work," a spokesman told Techcrunch. “Over the next two years, we will provide our Workplace customers the option to transition to Zoom’s Workvivo product, Meta’s only preferred migration partner.”
Workplace was formed to compete with the likes of Microsoft Teams, Slack and Zoom but is said to have failed to recover following the Covid pandemic.
Meta has taken steps to fight against the spread of disinformation ahead of European Parliament elections, Reuters reported citing the EU Commission.
“Meta has now deployed new functionalities … 27 new real-time visual dashboards, one for each member state, to allow third-party real-time civic discourse and election monitoring,” a spokesperson for the commission said.
Last month, the EU Commission opened a formal investigation against Meta for spread of disinformation.
Meta Platforms wants to reduce the number of VP positions from 300 to 250 in what appears to be a continuation of its “Year of Efficiency”, Business Insider reported citing sources familiar with it.
Eye-maker EssilorLuxottica confirmed Meta is interested in stake
EssilorLuxottica SA, world’s biggest eye-maker confirmed to analysts that Meta is interested in investing in the company.
“We are proud that a company that knows us very well, after years of partnership, is convinced that our company can grow and do much better in the future,” CEO Francesco Milleri said.
Bloomberg reported earlier this month that Meta was planning to acquire a 5% stake (worth around €4.5 billion) in EssilorLuxottica as it pushes into the virtual and augmented reality market for smart glasses.
EssilorLuxottica reported a revenue of €1.75 billion (+10%) in the first half of 2024.
Last week, Meta issued investment grade bonds totaling $10.5 billion which according to Bofa analyst is another sign that its AI investment is not slowing down.
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Meta Platforms has worn a law suit which claimed that it defrauded shareholders by not revealing the impact of Apple privacy changes in 2022 and that former Chief operating officer Sheryl Sandberg used the company resources for personal matters.
