What you need to know
- Meta announced its Q2 2022 financial earnings, reporting a 1% drop in revenue compared to the same period last year.
- The company has been working on monetizing its products, including Reels, as TikTok dominates mobile streaming.
- The FTC has suited Meta to block its acquisition of VR studio Within.
Meta reported its second-quarter 2022 financial earnings on Wednesday, disappointing investors as the company saw its revenue drop for the first time compared to the same period in 2021. Meta saw a revenue of $28.82 billion, compared to $29.07 billion in Q2 2021, and below analyst expectations of $28.94 billion.
That said, the company saw an increase in daily and monthly active users.
"It was good to see positive trajectory on our engagement trends this quarter coming from products like Reels and our investments in AI," Meta CEO Mark Zuckerberg said in a statement. "We're putting increased energy and focus around our key company priorities that unlock both near and long term opportunities for Meta and the people and businesses that use our services."
As with much of the tech industry, Meta has been feeling the recent economic pressures, which has led to the company's "cost-conscious" decision to slow hiring and even reduce staffing on some projects, as reported by The Verge. This echos similar sentiments made by Alphabet, which is also slowing down hiring for the remainder of the year as it deals with economic stress.
The company has also felt pressure to monetize across its platform, including Instagram Reels, which competes with apps like TikTok. Most recently, the company raised the price of its Quest 2 VR headset by $100, citing increased manufacturing and shipping costs.
On the other side, and surely not helping the situation, the FTC is currently suing to block Meta's acquisition of Within, a VR studio responsible for the popular Supernatural game.
"Letting Meta acquire Supernatural would combine the makers of two of the most significant VR fitness apps, thereby eliminating beneficial rivalry between Meta's Beat Saber app and Within's Supernatural app," the complaint states. It suggests that Meta's control over the metaverse makes the proposed acquisition "unlawful."
In response, Meta stated Wednesday that FTC's case "is based on ideology and speculation, not evidence. The idea that this acquisition would lead to anticompetitive outcomes in a dynamic space with as much entry and growth as online and connected fitness is simply not credible."
"By attacking this deal in a 3-2 vote, the FTC is sending a chilling message to anyone who wishes to innovate in VR. We are confident that our acquisition of Within will be good for people, developers, and the VR space."
You can read Meta's full response here.
