Meta Platforms (META) Launches Latest Features for Facebook
Meta Platforms META unveiled the latest features for Facebook, which would help users to customize the Facebook Feed and select the type of content they want to view.
Facebook is continuously using machine learning to personalize feeds to users’ interests. Per its strategy, Meta Platforms recently announced the launch of its feature, allowing to select show more or show less on posts from the people and communities that users are connected to and posts that Facebook recommends.
The show more feature will increase the ranking score for posts similar to it and the show less feature will decrease the ranking score for similar posts. This will provide direct feedback to Meta Platforms to make their artificial intelligence system efficient.
The launch of the latest feature is in line with the company’s recent strategy to drive user growth for its family of apps. Meta Platforms also recently launched features to switch between and create new accounts and profiles on Facebook and Instagram more easily. Meta Platforms expects the features to boost its user growth and drive ad revenues.
Meta Platforms, Inc. Price and Consensus
Meta Platforms, Inc. price-consensus-chart | Meta Platforms, Inc. Quote
Meta Platforms Launches Features to Drive User growth
META is currently facing the worst downturn in its history, with declining digital advertisement revenues.
The recent revenue fall can be attributed to geopolitical tensions like the Russia-Ukraine war, which reduced META’s monthly active users across its family of apps, namely Facebook and Instagram. Also, rising inflation weakened digital advertising revenues. This hurt investors’ sentiments about ad revenue-dependent companies.
Ad-targeting-related headwinds resulting from Apple’s AAPL iOS changes are also impacting Meta Platforms’ ad revenue growth.
Apple’s iOS changes have made ad targeting difficult, which has increased the cost of driving outcomes. Measuring these outcomes is difficult. Meta Platforms expects these factors to hurt advertising growth through the rest of 2022.
Shares of Meta Platforms, which currently has a Zacks Rank #4 (Sell), have tumbled 59.5% in the year-to-date period compared with the Zacks Internet – Software industry’s decline of 53.7%.
You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Intensifying competition for ad dollars and user engagement from the likes of Snap SNAP, Twitter TWTR and TikTok are other headwinds.
Snap is benefiting from improving its user engagement, particularly in the 13-34-year-old demography, which is expanding its advertiser base. SNAP is also giving competition to META in the metaverse space. It collaborated with Vogue to feature a virtual try-on experience of select pieces from Balenciaga, Dior and Gucci, which will be available for snapchatters globally.
Although Meta Platforms is investing aggressively in building the metaverse, Twitter surpassed it as the first social media giant to enter the non-fungible token marketplace by launching a tool to showcase and sell NFTs on its platform.
Rising legal woes, strong competition and geopolitical headwinds negatively impacted revenue growth in the second quarter of 2022.
Revenues of $28.82 billion beat the Zacks Consensus Estimate by 0.44% but decreased 0.9% year over year. At constant currency (cc), the top line improved 3%.
Although Meta Platforms’ short-term revenue growth looks bleak, the company is confident about its long-term growth. It is investing heavily in developing AI, which will drive revenue growth in its ad business.
Reels are the newest trends and feeds are increasingly being recommended by AI. This will enable Meta Platforms to evolve its ad systems to help creators earn through Facebook and Instagram, and create ad revenues for the company.
Further, Meta Platforms’ investments in AI will reduce privacy breaches and protect its users' data.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Apple Inc. (AAPL) : Free Stock Analysis Report
Twitter, Inc. (TWTR) : Free Stock Analysis Report
Snap Inc. (SNAP) : Free Stock Analysis Report
Meta Platforms, Inc. (META) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
