Meta, the parent company of Facebook, set a Wall Street record last week, and not the good kind.
After reporting earnings at midweek, shares plunged and kept going down, losing $232 billion in one day alone – the biggest loss in Wall Street history.
The company reported weaker-than-expected revenue for the fourth quarter, but that’s not what led to the wave of selling. CEO Mark Zuckerburg was blunt in his assessment of the company’s immediate future, citing inflation, supply chain issues affecting advertisers, and users shifting to alternatives that “monetize at lower rates.”
“People have a lot of choices for how they want to spend their time and apps like TikTok are growing very quickly,” Zuckerburg said on the conference call. “And this is why our focus on Reels is so important over the long-term. As is our work to make sure that our apps are the best services out there for young adults, which I spoke about on our last call.”
Facebook purchased Instagram when young adults switched from Facebook, which was increasingly being used by their parent's generation. Even though Facebook has more than 2 billion users worldwide, the latest earnings report showed a slowdown in user growth.
ConsumerAffairs reviewers weigh in
An analysis of verified reviews of Facebook at ConsumerAffairs shows that the platform still has its fans, earning a respectable 3.4-star rating in a 5-star system. But recent reviews suggest a rising level of user frustration.
Laurel, of Fredericksburg, Va., is among several Facebook users who are bewildered by the company’s policies.
“I get banned from reacting, commenting, sharing, you name it, without warning because I violated some vague community standard,” Laurel wrote in a ConsumerAffairs review. “Facebook says I am ‘spamming’ people by reacting or commenting. Huh?”
Lisa, of Fort Lauderdale, Fla., says the problem goes deeper than being temporarily banned. She says Facebook has shut down many users’ accounts since December for unspecified reasons.
“They have no support team to inquire, the phone numbers listed online do not work or are fraud, and the forms requested to fill out are never replied to,” Lisa told us. “I sent in 30+ requests for help and NO one has replied to my requests.”
Challenges for small businesses
Justin, a ConsumerAffairs reviewer from San Diego, said he owns a business and has to work with Facebook on advertising. Lately, he says it hasn’t been easy.
“Their AI robots will reject your ad for no reason other than it made a mistake,” Justin contends in a ConsumerAffairs review. “Even worse, if their stupid robots make a big mistake, they'll shut down your entire ad account. Even worse, when you chat with their support, they'll never tell you why it was rejected or taken down. You can get everything back up and running again if you constantly send it in for a review and after many reviews, an actual human will do it and reinstate it.”
According to Reuters, analysts are beginning to wonder if Facebook’s problems are contagious and will eventually spread to Instagram, which is favored by a younger demographic. The news service cites Insider Intelligence, a forecasting firm, which recently estimated that Instagram’s growth in users could eventually be at risk, slowing to 5.8% this year and to 3.1% by 2025.