Mark Zuckerberg’s attempt to reinvent Facebook’s Meta Parent hits early hurdles

Meta on Thursday rolled back some of the new Instagram features central to the revamp that prompted swift reactions from users. The company acted just hours after Mr. Zuckerberg defended the introduction of the features.

Mr. Zuckerberg is trying to reform almost all aspects of the social media platform’s operations, From any content provided to userson how to present digital ads, To focus more on video content. Analysts say it all adds up to one of the biggest set of changes for the company in years.

“Dead at an inflection point – what once seemed untouchable is cracks emerging,” said Daniel Neumann, principal analyst at Futurum Research. “Meta has big problems to solve and, as she’s done in the past, has to be quick to tackle them all the time while dealing with the toughest competition she’s ever faced.”

Facebook, also called Meta before Rebranding last yearI’ve been through turmoil before. But adding to Mr. Zuckerberg’s challenge is the economic backdrop against which this shift is taking place. to rise Inflation affects advertising spending There is intense competition between platforms for the funds available for advertising. The company said Wednesday that ad prices, which fell 8% in the first quarter, Meta calculates, fell 14% in the April-June period. A year ago, the company reported a 47% year-over-year increase in average advertising price.

“We are focused on making the long-term investments that will make us stronger out of this downturn,” Zuckerberg said, in an earnings call on Wednesday.

Shares in Meta are down more than 6% in Thursday trading. The stock is down more than 50% this year, wiping nearly $500 billion from its market valuation.

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The company also faces massive competition. TikTok, China’s owned social media service has surpassed 1 billion monthly active users in September 2021, and its use surpassed that of Meta Instagram among teens in November 2021, according to

Forrester Research a company

To respond, Meta launched Reels – a short video service not unlike TikTok – for Instagram users in the US in August 2020. More recently, Mr. Zuckerberg said in April that Facebook and Instagram would Use AI more actively To recommend content to users from accounts they don’t already follow. It’s a radical shift away from the way Facebook and Instagram traditionally work, which is to display content to users from their friends, family, or accounts they follow. Using an algorithm to determine what content a user is likely to interact with is perhaps the most signature feature of TikTok.

This was followed by an announcement in May from Adam Mosseri, head of Instagram, who said the service would begin testing full-screen photos and videos for users, Similar to the layout of the TikTok app.

Zuckerberg said the changes show promising early returns. On Wednesday, Zuckerberg said that over the past three months, Meta has registered a 30% increase in the time users interact with Reels. He added that nearly one in six posts in users’ Instagram and Facebook feeds come from accounts that users don’t follow and are based on AI recommendations. That number will rise to one in three jobs by the end of 2023, he said.

“I think we’re on the right track here and we just need to get on with this,” Zuckerberg said.

Google, Meta, and ByteDance are in a battle for supremacy in the short video format. WSJ’s Miles Kruppa explains how each company operates and shares insight into the platform that may come to the fore. Illustration: Ryan Trevis

But changes are also created Revolution among some prominent users. Over 2 million Instagram users this week liked a post that said “Make Instagram again” and “Stop trying to be a tiktok, I just want to see cute pictures of my friends.” Among the users who have shared the post are influential celebrities Kylie Jenner and Kim Kardashian.

“I want to be honest. I think more Instagram will become videos over time,” Mr. Mosseri said on Tuesday.

Mr Zuckerberg addressed the backlash to the earnings call, saying users will still see content from their friends but insist the changes will improve Facebook and Instagram.

Hours later, the company, in a surprising move, retracted some of the changes it had recently made. Instagram said it will pause a beta version of the app that shows users full-screen photos and videos “so we can explore other options.” It also said it will reduce the number of posts shown to users from accounts they don’t follow.

“While we believe Instagram needs to evolve as the world changes, we want to take the time to make sure we’re doing it right,” the company said in a written statement. The latest changes were reported earlier by Platformer, the tech newsletter.

The social media giant has traversed tough terrain before. As it prepared for its 2012 IPO, Facebook, which was still largely accessed on PCs, faced Wall Street questions about how it handled consumers switching to mobile. The company responded before Buy Instagram for $1 Billion and renew their mobile applications.

Facebook found itself in a similar quagmire in 2016 when it got involved in a fierce competition with

Explode, Explode a company ,

Explode, Explode 1.26%

Snapchat Maker. The company responded by launching Instagram Stories, a rival to its competitor’s most prominent feature.

Mr. Zuckerberg will be following the latest transformation without one of his closest citizens. Sheryl Sandberg, who is credited with helping create Facebook Advertising has become a juggernautleft the company and was on its last call regarding Meta earnings on Wednesday.

Meta is also trying to push the changes while undergoing belt-tightening. The company lowered its forecast for expenses this year to a range of between $85 billion and $88 billion, from a previous forecast of $87 billion to $92 billion. The company will also cut its hiring rate, he said, with some teams shrinking. “This is a period of more intensity, and I expect we can do more with less,” Zuckerberg said.

The co-founder last year revealed new plans for the company as he renamed it Meta, primarily about pushing to adopt The so-called metaverse, which is a nascent and more comprehensive view of the Internet where people interact. “I still think these projects are important, but given the newer revenue trajectory that we’re seeing, we’re working to slow the pace of these investments and push some of the expenses that would have come in the next year or two to a somewhat longer schedule,” he said on the earnings call.

“Previously challenging periods have transformed our company and helped us develop our next generation of leaders, and I expect this period will be no different,” Zuckerberg said.

write to Salvador Rodriguez at [email protected]

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