Facebook’s daily active users (DAUs) have fallen for the first time in the company’s 18-year history.
According to Meta Platforms, Facebook’s owner, DAUs fell to 1.929 billion in the three months to the end of December, down from 1.930 billion in the previous quarter.
The company also warned of slowing revenue growth due to competition from rivals such as TikTok and YouTube, as well as a reduction in advertising spending.
In New York after-hours trading, Meta’s stock fell by more than 20%.
The drop in Meta’s share price reduced the company’s stock market value by approximately $200 billion (£147.5 billion).
Other social media platforms’ shares, such as Twitter, Snap, and Pinterest, fell sharply in extended trading.
According to CEO Mark Zuckerberg, the company’s sales growth has been hampered as audiences, particularly younger users, have defected to competitors.
Meta, which owns the world’s second largest digital advertising platform after Google, also stated that it had been impacted by Apple’s operating system privacy changes.
According to Meta’s chief financial officer Dave Wehner, the changes have made it more difficult for brands to target and measure their advertising on Facebook and Instagram, and could cost them “in the order of $10 billion” this year.
In the period, Meta’s total revenue, the majority of which comes from advertising sales, increased to $33.67 billion, narrowly beating market expectations.
It also forecasts revenue of $27 billion to $29 billion for the next quarter, which is lower than what analysts expected.
While the company has been investing in video to compete with TikTok, which is owned by Chinese tech giant ByteDance, the company makes less money from those offerings than it does from its traditional Facebook and Instagram feeds.
Mr. Zuckerberg expressed confidence that the investments in video and virtual reality would pay off, just as previous bets on mobile advertising and Instagram stories had.
However, he pointed out that previous strategy shifts did not have to contend with a major competitor.
“The teams are doing a great job, and the product is growing at a rapid pace,” he said. “One thing that is somewhat unique here is that TikTok is a video-sharing app.”
