Tech Inside

Meta sees first ever quarterly drop, misses estimates

Publish: 12:45 PM, 28 Jul, 2022


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Meta Platforms Inc has issued a gloomy forecast after recording its first-ever quarterly drop in revenue, with recession fears and competitive pressures weighing on its digital advertisement sales.

Shares of the Menlo Park, California-based company were down about 4.6 percent in extended trading.

The company said on Wednesday it expects third-quarter revenue to come in at $26bn to $28.5bn, which would make it a second year-over-year drop in a row. Analysts were expecting $30.52bn, according to IBES data from Refinitiv.

Total revenue, which consists almost entirely of ad sales, fell 1 percent to $28.8bn in the second quarter ended June 30, from $29.1bn last year. The figure slightly missed Wall Street’s projections of $28.9bn, according to Refinitiv.

The company, which operates the world’s largest social media platform, reported mixed results for user growth.

Monthly active users on flagship social network Facebook came in slightly under analyst expectations at 2.93 billion in the second quarter, an increase of 1 percent year-over-year, while daily active users handily beat estimates at 1.97 billion.

Like many global companies, Meta is facing some revenue pressure from the strong US dollar, as sales in foreign currencies amount to less in dollar terms. Meta said it expected a 6 percent revenue growth headwind in the third quarter, based on current exchange rates.

“We seem to have entered an economic downturn that will have a broad impact on the digital advertising business,” Chief Executive Officer Mark Zuckerberg said on the earnings call. “The situation seems worse than it did a quarter ago.”

Still, the Meta results also suggest that fortunes in online advertisement sales may be diverging between search and social media players, with the latter affected more severely as ad buyers reel in spending.

Alphabet Inc, the world’s largest digital advertisement platform, reported a rise in quarterly revenue on Tuesday, with sales from its biggest moneymaker – Google search – topping investor expectations.

Snap Inc and Twitter both missed sales expectations last week and warned of an advertisement market slowdown in coming quarters, sparking a broad sell-off across the sector.

Chasing TikTok

On top of economic pressures, Meta’s core business is also experiencing unique strain as it competes with short-video app TikTok for users’ time and adjusts its advertisement business to privacy controls rolled out by Apple Inc last year.

The company is simultaneously carrying out several expensive overhauls as a result, revamping its core apps and boosting its ad targeting with AI, while also investing heavily in a longer-term bet on “metaverse” hardware and software.

Meta executives told investors they were making progress in replacing advertisement dollars lost as a result of the Apple changes but said it was being offset by the economic slowdown.

They added that Reels, a short video product Meta is increasingly inserting into users’ feeds to compete with TikTok, was now generating more than $1bn annually in revenue.

However, Reels cannibalises more profitable content that users could otherwise see and will continue to be a headwind on profits through 2022 before eventually boosting income, executives told analysts on Wednesday.

“They are being greatly affected by everything,” Bokeh Capital Partners’ Kim Forrest said, referring to the economic slowdown as well as competition from TikTok and Apple.

“Meta has a problem because they’re chasing TikTok and if the Kardashians are talking about how they don’t like Instagram … Meta should really pay attention to that.”

On Monday, two of Instagram’s biggest users, Kim Kardashian and Kylie Jenner, both shared a meme imploring the company to abandon its shift to TikTok-style content suggestions and “make Instagram Instagram again”.

Zuckerberg did not appear to be swayed, however.

About 15 percent of content on Facebook and Instagram is currently recommended by AI from accounts users do not actively follow, and that percentage will double by the end of 2023, he told investors on the call.

Metaverse, still theoretical

For now, at least, the metaverse part of Meta’s business remains largely theoretical. In the second quarter, Meta reported $218m in non-ad revenue, which includes payments fees and sales of devices like its Quest virtual reality headsets, down from $497m last year.

Its Reality Labs unit, which is responsible for developing metaverse-oriented technology like the VR headsets, reported sales of $452m, down from $695m in the first quarter.

Although Meta has recently slowed investments as cost pressures increased, executives reassured investors it was still on track to release a mixed-reality headset called Project Cambria later this year, focused on professionals.

Meta broke out the Reality Labs segment in its results for the first time earlier this year, when it revealed the unit had lost $10.2bn in 2021.

Its second-quarter operating profit margin fell to 29 percent from 43 percent as costs rose sharply and revenue dipped.

In November, Chief Financial Officer David Wehner will become Meta’s first chief strategy officer. Susan Li, Meta’s current vice president of finance, will become CFO.


Meta  


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Tech Inside

Mark Zuckerberg's wealth dropped to $71 billion this year: Report

Publish: 04:04 PM, 20 Sep, 2022


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Facebook co-founder Mark Zuckerberg's wealth has dropped by a whopping $71 billion this year, the maximum for a billionaire being ranked on the Bloomberg Billionaires Index. The Meta CEO now ranks 20th among global billionaires, the lowest spot since 2014, Bloomberg reported.

Less than two years ago, the 38-year-old Facebook co-founder was worth $106 billion and was in the elite group of global billionaires with only Jeff Bezos and Microsoft co-founder Bill Gates commanding bigger fortunes. Zuckerberg's fortune rose to the peak of $142 billion in September last year, after the company's shares touched $382.

In October last year, Zuckerberg introduced Meta and renamed the company's name from Facebook Inc. Since, then the company has gone downhill, the Bloomberg report stated. In February, the company revealed it had witnessed no growth in monthly Facebook users resulting in massive collapse in its share prices and slashing the CEO's wealth by $31 billion.

According to Laura Martin, a senior internet analyst, the stock is being dragged down by Meta's investments in the metaverse. She added Meta has to get users back from TikTok, the prime competitor these days. Meta has fared worse in 2022 than most of the FAANG peers. FAANG is an acronym to denote Facebook, Amazon, Apple, Netflix, and Google. It's down about 57 per cent this year, the Bloomberg report stated.

According to report, Zuckerberg holds more than 350 million shares in Meta as per the company's proxy statement. Zuckerberg has attempted a rebranding of sorts. He recently uploaded a video of himself practicing mixed martial arts and repeatedly referred to himself as a "product designer" in a three-hour conversation on Joe Rogan's podcast.


Facebook   Mark Zuckerberg  


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Tech Inside

Digital nomads seek sun, sea and sustainability as remote work booms

Publish: 11:40 AM, 28 Jul, 2022


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Sitting on the terrace of a cafe in the heart of Lisbon one morning in June, sales specialist Victor Soto was busy at work communicating with colleagues across Europe and the Americas.

The COVID-19 pandemic is what drove the British-Peruvian 33-year-old to become a so-called "digital nomad".

"The lifestyle gives me a lot of choice and freedom," he told the Thomson Reuters Foundation. Soto made the decision to work only for companies that offer fully remote working in order to fulfil his passion for travel, he explained.

Soto is now also part of a growing trend among digital nomads who are looking for a less frenetic pace of life.

These new "slomads" still travel around the globe taking their work with them, but are choosing to spend longer in one location - some to enjoy a richer cultural experience while others are driven by the desire to be more eco-conscious.

Remote and flexible working has boomed since coronavirus lockdowns lifted globally, backed by major companies from AirBnB to Twitter and a rising number of nations issuing digital nomad visas which allow people to stay and work for up to two years.

The typical profile of a digital nomad is shifting, as island-hopping 20-somethings are joined by online workers in their 30s and 40s travelling with partners and children, experts and researchers say.

But concerns are growing over their environmental impact.

While data is scarce on the carbon footprint of digital nomads, "slomads" are striving to fly less, stay in sustainable accommodation, and invest in, or contribute to, green projects.

However, climate campaigners are not convinced, saying the social phenomenon still depends on air travel, which produces up to 3% of global greenhouse gas emissions.

"I think we feel a bit guilty, because the main issue with this lifestyle is the flying," said Emmanuel Guisset, a former digital nomad who is now chief executive of Outsite, which offers co-living spaces for people including remote workers.

SLOWING DOWN

Pre-pandemic, the stereotype of a digital nomad was a freelancer in their 20s bouncing between sunny locales and sporting little more than shorts, flip-flops and a laptop.

Now, more people are combining work with travel later in life - often staying longer in one place to benefit from cheaper rents and better appreciating and contributing to local culture.

A poll published in May by freelancer marketplace Fiverr and travel guide publisher Lonely Planet showed one-third of nomads surveyed moving every one to three months, while 55% enjoyed working in one location and moving after three months or more.

Americans make up the majority of digital nomads. A 2021 study from Upwork on the habits of hiring managers estimated that 36.2 million US citizens would work remotely by 2025, an 87% increase from pre-pandemic levels.

Tourist hot-spots have been quick to embrace digital nomads, and view the growing trend of remaining longer in one location as a way to recoup losses from pandemic lockdowns.

Destinations such as Aruba, Barbados, Cape Verde, Croatia, Estonia, Indonesia, Malta and Norway have created digital nomad visas, allowing people to stay put and work for up to two years.

Accommodation rental company AirBnB saw a 90% rise in long-term bookings in Portugal last year compared to 2019, which it said reflected how more people are taking advantage of the ability to work and live from anywhere.

Yet digital nomads admit there is still a lot of flying involved, especially since the easing of COVID-19 restrictions, although experts say it is difficult to identify nomads' share of flights compared with tourism and business passengers.

Denise Auclair, corporate aviation expert at European clean transport campaign group, Transport and Environment (T&E), said there was "a golden opportunity" to continue with the reduced level of business travel seen during the pandemic, and to cut down on unnecessary flying.

But she queried whether companies are factoring the carbon footprint of employees working as digital nomads into their annual emissions reports.

Guisset of Outsite said nomads are increasingly turning to carbon offsets, whereby people seek to compensate their climate impact by funding projects that reduce emissions through activities such as planting trees.

Some environmental groups, however, have dismissed such carbon-credit schemes as "window dressing".

"It gives people a false sense of flying green, when there are so many problems with it," said Dewi Zloch, aviation expert at Greenpeace Netherlands.

She pointed to research done for the European Commission in 2017 which said carbon-offsetting schemes are not providing real and measurable emissions reductions.

GREEN LIVING

The pandemic-driven remote work boom, meanwhile, has encouraged the creation of co-living and co-working spaces, some of which are trying to put green ideas into practice.

When Outsite first started with its California co-living property, the company planted a tree for each booking made in locations from the Andes mountains to Indonesia.

Traditional Dream Factory, a co-living space in Portugal's vast rural Alentejo region which plans to launch in summer 2023, is trying something more ambitious.

Co-founder Samuel Delesque said the aim is to set up a community of like-minded digital nomads, engineers, artists and crypto entrepreneurs who will also regenerate the land.

The organisation has already started covering deforested areas with nitrogen-fixing crops and planted hundreds of trees.

It also plans to insulate its living quarters and create natural pools and showers to save water and become self-sufficient.

A former software engineer and digital nomad, Delesque plans to expand in countries like South Africa and the United States.

Caring for the environment is at the heart of his project, the Franco-Danish entrepreneur said.

"If we don't manage to align economic values with (the) ecological, then we're really doomed as a species," he added.



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Tech Inside

5G internet within December: BTRC

Publish: 09:36 AM, 29 Jun, 2022


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BTRC Chairman Shyam Sunder Sikder said 5G internet will be introduced by all mobile operators within December next.

He said grassroots people, a technology-based education system, women, physically challenged people, and informal sectors have been prioritized to form Bangladesh Broadband Policy 2022.

Shyam Sunder Sikder revealed the information while speaking at a workshop in the capital on Tuesday.

Brig Gen Md Nasim Parvez, Director General (System & Services), BTRC, presented details about the digital connectivity to implement blended education.

He said currently, the number of mobile phone users is 18.40 crore while the number of internet users is 12.50 crore. 

Around 1, 47,975 kilometres in 4,431 unions have been connected with broadband internet across the country, Nasim added.

- UNB


Bangladesh   5G  


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Tech Inside

Sandberg steps down as COO of Facebook parent company Meta

Publish: 12:07 PM, 02 Jun, 2022


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Sheryl Sandberg, the chief operating officer of Facebook and its parent company Meta, has announced she will step down from her role, ending 14 years in the job that made her one of the most powerful figures in the tech world and saw the company weather a meteoric rise and multiple controversies.

Sandberg announced the move in a post on her own Facebook page on Wednesday, adding that she was not sure of what the future holds for her but plans to focus on her foundation and philanthropic work going forward.

“When I took this job in 2008, I hoped I would be in this role for five years. Fourteen years later, it is time for me to write the next chapter of my life,” Sandberg wrote on Facebook.

She said she will leave the company this fall, but will continue to be on Meta’s board and thanked Meta founder and chief executive officer Mark Zuckerberg for his support, saying “sitting by Mark’s side for these 14 years has been the honor and privilege of a lifetime”.

In his own Facebook post, Zuckerberg called it “the end of an era” and said Sandberg “deserved the credit for so much of what Meta is today”.

“When Sheryl joined me in 2008, I was only 23 years old and I barely knew anything about running a company … Sheryl architected our ads business, hired great people, forged our management culture, and taught me how to run a company,” the CEO added.

He said that Sandberg’s position would not be filled, and announced restructuring of existing roles at the company.

Sandberg has been one of Facebook’s most prominent public faces since joining in 2008, shaping its policies and overseeing responses to the myriad public controversies the company has battled.

The billionaire executive led the company’s advertising business and was responsible for nurturing it from its infancy into a Silicon Valley behemoth. She joined four years after its founding to be “the adult in the room”, analysts have said, attempting to help navigate the company through the scandals that ensued along with its vast user growth.

She quickly gained notoriety as one of the most visible and most powerful female executives globally, with previous positions at Google and the Clinton administration. In 2013 she published her female empowerment manifesto Lean In.

More recently, she has overseen operations as the company weathers a financial downturn amid a shift away from its core social media platforms into virtual reality.

Facebook rebranded in October 2021 to Meta, reflecting its move into VR after a series of difficult years. Zuckerberg has bet big on his hopes for the “metaverse”, an augmented and virtual reality space where people can interact through avatars in a shared world. The company has earmarked $10bn for the metaverse over the next year and plans to consistently spend more in coming years, Zuckerberg announced last year.

But Meta has struggled with the transition, reporting a record $230bn loss in market value after a disappointing earnings report in February. That report also revealed that Facebook had seen its first-ever drop in daily user numbers. The company is boosting efforts to retain young users - a key advertising demographic that has been leaving Facebook and Instagram in droves to platforms such as TikTok.

Zuckerberg said on Wednesday that Javier Olivan, the vice president of central products, will be promoted to chief operating officer and take on some of the advertising-related responsibilities previously under Sandberg’s purview. Justin Osofsky, Instagram’s chief operating officer, will now oversee AI-trained content production across platforms.

“Meta has reached the point where it makes sense for our product and business groups to be more closely integrated, rather than having all the business and operations functions organized separately from our products,” he wrote.

Sandberg’s departure also comes after billionaire tech investor Peter Thiel stepped down from Meta’s board, following the company’s worst-ever earnings report, suggesting some power players may be jumping ship as the company flounders.

Most recently Sandberg and Facebook had faced increased scrutiny after documents leaked by the whistleblower Frances Haugen were turned over to Congress and published by a number of news outlets.

The documents revealed the extent to which Meta knew about the aggressive spread of misinformation and hate speech on its platform, that it was reluctant to censor rightwing news organizations for fear of angering the Trump administration, and how it struggled to crack down on human trafficking operations advertised on Instagram. It also revealed internal studies that showed grave mental health effects of the platform on teens.

Sandberg referenced in her departure missive the ways the tech landscape has evolved since she began at the company.

“The debate around social media has changed beyond recognition since those early days,” she wrote. “To say it hasn’t always been easy is an understatement. But it should be hard. The products we make have a huge impact, so we have the responsibility to build them in a way that protects privacy and keeps people safe.”

As backlash mounted over the whistleblower documents in 2021, Sandberg and Zuckerberg avoided making public comment on the revelations, instead leaving Nick Clegg, the vice-president of global affairs, and Adam Mosseri, the head of Instagram, to manage the official response to the revelations.

Sandberg’s behavior at Facebook has been scrutinized in the past. She reportedly asked Facebook employees to examine George Soros’s finances after he criticized the social media giant and she was called before Congress in 2018 to testify about misinformation and manipulation surrounding the 2018 elections.

It also recently came to light that she allegedly pressured the Daily Mail to drop unflattering stories about her romantic partner Bobby Kotick, the CEO of Activision Blizzard. Caroline Nolan, a spokeswoman with Meta, said that the matter has “nothing to do with Sheryl’s decision to step back from the company”.

Sandberg, who lost her husband Dave Goldberg suddenly in 2015, said she is “not entirely sure what the future will bring”.

“But I know it will include focusing more on my foundation and philanthropic work, which is more important to me than ever given how critical this moment is for women,” she wrote, adding that she is also getting married this summer, and that parenting their expanded family of five children will also be a part of this future.

- The Guardian, Reuters


META   Facebook   Sandberg  


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Tech Inside

Shareholders await Musk's next move in Twitter takeover bid

Publish: 10:04 AM, 19 Apr, 2022


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Twitter has dropped a major roadblock in front of Elon Musk’s effort to take over the company, leaving investors to wonder about the mercurial Tesla CEO’s next move.

The social media company has adopted a “poison pill” defense that makes it difficult for Musk or any other investor to buy Twitter without the board of directors’ approval. Musk, who currently owns about 9% of the company, last week disclosed an offer of about $43 billion, or $54.20 per share.

Twitter’s next likely move is to formally reject Musk’s offer, although it could negotiate. Musk has a number of options which also include talks with the board, sweetening his offer, or even triggering the poison pill, which experts say would be disastrous for the company.

In a regulatory filing on Monday, Twitter’s board said it approved the defensive move to protect the company from “coercive or otherwise unfair” takeover tactics.

The board is leaving open the possibility of negotiating with Musk or another suitor. The filing says the shareholder rights agreement should not interfere with any merger or offer approved by the board.

Although he said his offer was “final,” Musk may have to raise his bid to satisfy other shareholders. A Saudi prince who is among Twitter’s major shareholders scoffed at the offer last week in a tweet. Al Waleed bin Talal said he didn’t believe $43 billion is close to Twitter's value given its growth prospects. Twitter shares hit an all-time high of $77.63 in March 2021.

When he made his offer public, Musk provided no details on financing, but such a disclosure could improve his chances. He could raise money by borrowing billions using his stakes in Tesla and SpaceX as collateral, and he could bring in other investors.

The poison pill would give stockholders as of April 25 the right to buy one one-thousandth of a share of preferred stock for each common share they own, at a price of $210. The rights are triggered if any person or group of investors buys 15% or more of the company’s shares without board approval.

The preferred stock would have the same voting rights as a common share, according to the filing, which does not specifically mention Musk.

The poison pill essentially would spell the end of Twitter if Musk or another investor acquires 15% or more of the company, said James Cox, a professor of corporate and securities law at Duke University.

Shareholders who exercise the rights and buy preferred stock at $210 would get $420 in Twitter stock or assets, he said. That would be more than Twitter can afford to pay, and likely would send the company into receivership, Cox said.

“You want to create an event that Musk would never want to trigger because it would be the death of Twitter,” Cox said. He predicts that Musk and the board will negotiate, at least for a while, adding that no investor has ever crossed the line to activate a poison pill.

If Musk triggered the poison pill, he risks wiping out much of the money he has invested in Twitter because his stake would be diluted, said Columbia University law professor Eric Talley. “You want to deter someone from deliberately triggering the poison pill,” Talley said.

Twitter's board has information that the average shareholder doesn't, such as earnings or market growth projections, and whether there's reason to believe that the share value is artificially depressed, Talley said. The board, he said, could just hold out.

"They’re sitting right now on top of a poison pill that’s a bit of a showstopper. From a corporate law perspective, they’re on pretty solid footing right now if they just keep that in place and say they’re not comfortable bargaining at this stage.”

Musk said in making his bid that Twitter “needs to be transformed as a private company” in order to build trust with users and do better at serving what he calls the “societal imperative” of free speech. He said shareholders, not the board, should decide whether Twitter goes private.

Shares of Twitter closed Monday up 7.5% at $48.45, still $5.75 shy of Musk’s offer. That’s a sign that investors are skeptical of whether Musk can pull off the deal.

Musk began accumulating Twitter shares in late January, ending up with a stake of about 9%. Only Vanguard Group controls more shares. A lawsuit filed last week in New York federal court alleged Musk illegally delayed disclosing his stake so he could buy more shares at lower prices.

Musk took to Twitter to criticize board members in recent days, saying he’d save about $3 million per year by bringing the board salary to zero if his bid succeeds, and noting that board members collectively owning just a tiny financial stake in Twitter shows that their “economic interests are simply not aligned with shareholders.”

Musk, who has more than 82 million followers, is a prolific tweeter who has criticized other celebrity accounts for not tweeting enough, suggesting that as a sign that Twitter is dying.

The takeover episode will put pressure on Twitter executives to show that the company is not underperforming, said Olaf Groth, a business professor at the University of California, Berkeley. Even the entire social media business model of making money through advertising -- which Musk has questioned -- is now “up for discussion,” Groth said.

“He may decide it’s not worth it, and that he sent a political signal to exert pressure,” Groth said. “Now all eyes are on Twitter and the clock is ticking.”


Elon Musk   Twitter  


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