META is having a rough year. The company’s stock is down 57% year-to-date, and CEO Mark Zuckerberg’s personal fortune is down to his $72 billion, according to Bloomberg’s Billionaires Index.

While macroeconomic conditions are hitting the tech industry as a whole, Meta and other tech companies that rely on ad-based revenue face their own set of headwinds. It’s a massive privacy reform called App Tracking Transparency by Apple (AAPL).

The feature, which lets users decide whether apps track them on the web, was expected to cut $10 billion from Meta’s revenue this year, the company said in February. The company is now being accused of trying to circumvent this feature and violating state and federal data collection laws in a proposed class action lawsuit in California.

Apple’s privacy changes have devastated Meta’s bottom line, but the company’s problems don’t stop there. The growth of TikTok has made the social media giant desperate to reinvent Instagram to appeal to Gen Z. Meanwhile, his main Facebook app has completely lost its dominance over younger demographics.

These problems are creating a terrifying vortex that Meta is trying to escape from.

How Meta allegedly collects data on the sites you visit

Apple’s App Tracking Transparency is a setting that asks if an app can track your movements on the web and in other apps. Apps and websites do this all the time. While looking for vintage consoles on eBay (EBAY), I started seeing ads for old Nintendo (NTDOY) and PlayStation (SONY) on various sites.

By tracking users across the web, companies like Meta create better profiles of consumer groups, which advertisers use to direct ads to people who want to buy their products. This allows for more precise targeting.

AUSTIN, TX - MARCH 15: Mark Zuckerberg presents Into the Metaverse: Creators, during the 2022 SXSW Conference and Festival at the Austin Convention Center on March 15, 2022 in Austin, Texas. Speaking via video at Commerce and Connection.  (Photo credit: Samantha Burkardt/Getty Images for SXSW)

Mark Zuckerberg speaks at Into the Metaverse: Creators, Commerce and Connection at the 2022 SXSW Conference and Festivals on March 15, 2022 at the Austin Convention Center in Austin, Texas. (Photo credit: Samantha Burkardt/Getty Images for SXSW)

However, opting out of tracking blocks access to your app, making it more difficult for advertisers to reach specific customers. As a result, these advertisers may focus their campaigns elsewhere. Meta isn’t the only company hit by Apple’s privacy measures. Snap also cites it as part of the company’s struggle with declining ad revenue.

According to a lawsuit filed on behalf of a Facebook user and citing an investigation by Felix Krause, Meta has taken users’ wishes not to be tracked by collecting data from websites they visit using the app’s built-in browser. is avoided.

For example, you click a link to go to a news site’s Instagram page, and then click the profile link to read the article. Select a story to read and it will open in Instagram’s built-in browser. Krause and the lawsuit allege that Meta was able to insert its own code into the site to collect data about what users were looking at.

Meta denied any wrongdoing in a statement to Yahoo Finance, saying, “These allegations are baseless and we will vigorously defend ourselves. The in-app browser does not disclose how data is used for advertising. It has been carefully designed to respect your privacy choices, such as

Meta is throwing everything at the wall

But Apple’s privacy changes aren’t the only thing Zuckerberg and company are concerned about. The company also faces its biggest competition in years with the rise of TikTok. Meta is obsessed with tackling this challenge, and TikTok is remaking his Instagram to look more like a short-form video app.

This change has not completely captivated users. A test version of the app was so heavily criticized by users, including Kim Kardashian, that Instagram head Adam Mosseri issued an official statement that the company would not release that version of the software. But he explained that Instagram will continue to push for short-form videos.

The meta has plenty of reasons to worry about competition. The company is losing its edge when it comes to appealing to teens, according to research by both Piper Sandler and the Pew Research Center.

Instagram isn’t the only company changing. In July, Meta made major changes to his main Facebook app,[ホーム]tab and[フィード]Announced to add tabs. Home aims to mimic the kind of discovery engine that powers TikTok, giving users a way to find new accounts to follow. Feeds, on the other hand, are where you find posts from your friends and family.

Of course, there’s also Meta’s big push into the metaverse, which they announced last October along with their rebranding. However, the effort has drained funds from Meta’s coffers, and we expect this trend to continue.

Investors don’t seem to mind Facebook’s commitment to the metaverse either. A look at the trajectory of the company’s stock price last year shows that the collapse began the same day the company announced that Apple’s change was becoming a multi-billion dollar issue.

And unfortunately for Meta, I don’t see that changing any time soon.

Sign up for Yahoo Finance’s Tech newsletter

Other works by Dan

Any tips? Email Daniel Howley at [email protected] Follow him on Twitter. @Daniel Howley.

Find the latest tech business news, reviews, and helpful articles on tech and gadgets here

Read the latest financial and business news from Yahoo Finance

Download the Yahoo Finance App apple Also android

Follow Yahoo Finance twitter, Facebook, Instagram, flip board, LinkedInWhen Youtube

Source link

By admin

Leave a Reply

Your email address will not be published. Required fields are marked *