The parent company of Facebook, Meta Platforms, has posted its first-ever revenue decline.
The company's revenue in the second quarter fell by 1% to $28.8 billion (€28.3 billion), which was also below Wall Street projections.
The company cited a fall in advertising revenue, thanks to recession fears, a strong US dollar and increased competition as the reasons behind the drop.
Facebook is the world's largest social networking platform. The internet giant also owns Instagram, WhatsApp and Oculus, and is making inroads into the metaverse space.
"This is a period that demands more intensity," Meta CEO Mark Zuckerberg told analysts on a conference call on Wednesday. "Expect us to get more done with fewer resources."
Industry growth stagnating
Meta reported that Facebook had 2.93 billion monthly active users in the second quarter — an increase of 1% but short of analyst expectations.
"The good news, if we can call it that, is that its competitors in digital advertising are also experiencing a slowdown," social media analyst Debra Aho Williamson told AFP.
Twitter as well as Snap Inc, which owns Snapchat, both reported revenue losses last week. Google owner Alphabet, however, reported a rise in quarterly revenue on Tuesday, thanks to the search engine's popularity.
The rise of TikTok
One social media platform bucking the trend is the Chinese-owned video app TikTok, which has seen strong user growth — and revenue growth — in recent years.
In 2020, Instagram launched its Reels feature to compete on the short video front. However, the move has sparked backlash from some users, including big names like Kylie Jenner and Kim Kardashian.
"Meta has a problem because they're chasing TikTok and if the Kardashians are talking about how they don't like Instagram," Kim Forrest, founder of Bokeh Capital Partners, told Reuters. "Meta should really pay attention to that."