Meta and the No Good, Very Bad Week
If you’ve ever had a particularly nasty week where nothing went your way, you should know exactly how Meta Platforms, the owner of Facebook and WhatsApp, must feel right now. In the span of a few days news broke that the company is underperforming financially, its products are losing users and one of them was hacked, using funding from one of their own investors. Read on for a closer look at each of these problems and what they mean for the company.
Meta Underperforms in Q4, Shares Drop 26%
Let’s start off with one thing we can all relate to: money problems. Meta Platforms’ shares fell 26.4% right as February hit, which might seem bad but no, it’s not bad. It’s straight-up awful, considering it tanked the company’s valuation by $240 billion. This is tied, in part, to the company missing its Q4 revenue mark, likely a result of increased competition as Facebook officials stated that going up against TikTok and YouTube was getting harder and harder. I’m sure having multiple serious rivals to WhatsApp didn’t help much either. The company’s products are all on the way to being dethroned and that is now reflected in their financial situation.
Interestingly, Meta’s official statement is that the slump is, at least in part, thanks to Apple. The company claimed that the privacy changes made to iOS, the same ones that I found dubious, actually ruined their plans. The changes supposedly made ad targeting more difficult, thus causing Facebook’s ad-powered finances to take a hit. At this point, we can pretend to show some pity but, considering the company is lashing out at the tiniest of privacy measures, perhaps it’s best for them to change their approach and learn a lesson. Especially considering that…
Facebook Hemorrhages Daily Users
Against the backdrop of a stagnant user base, Facebook is seeing another issue: fewer people are actually bothering to visit the site. It lost a whopping million in North America alone, a number that might seem less scary when contrasted with the overall stat of 1.92 billion daily users, but there’s something we need to keep in mind. This is the first time in over 15 years of Facebook’s existence that a drop of any significance has been registered. No matter what the company went through — privacy scandals, outages, support of political unrest — it kept growing. Up until now.
Based on current trends, we’ll likely see more dwindling numbers in the future, as the platform’s failure to adapt to the new content trends leaves it in the dust. Meanwhile, Meta Platforms has thrown its resources into the Metaverse, which so far has netted them a bunch of memes and mockery and, well, not much else. The company needs to either speed up development on Metaverse or think of something that will help Facebook retain an audience, at least a part of it. Otherwise, we might finally see the giant topple.
WhatsApp Security Was Compromised
WhatsApp has had its fair share of security issues over the years, ranging from attackers easily crashing your app so bad you’d have to reinstall it to get it working to an unanswered phone call giving attackers access to your device. However, the newly revealed hack that might have been out there for years is different in one big way: it was financed by one of Meta’s biggest investors — Peter Thiel. Per reports at New York Times and Forbes, Thiel was a major financing force behind Boldend, a startup that’s been running since 2017. You probably don’t know that company, since it hasn’t made many waves up until now.
Thiel gave Boldend, which aims to make tools for “cyber warfare”, the financing to develop the ability to hack WhatsApp’s encryption, gaining access to user data. Just so we’re clear, based on reports, we’re not talking about metadata, the company could see your actual messages and photos. There’s little info on when this exploit first launched but it was reportedly patched in January 2021, though WhatsApp didn’t find it necessary to warn its users about this vulnerability.
This is very disturbing news for more than just the obvious privacy breach. For one, there’s no telling what other shady things Thiel got up to while the public eye wasn’t on him and, as a Facebook insider, he might have used his knowledge to finance more tools that make Meta products even less secure than they already are. Not to mention that WhatsApp is using Signal’s encryption protocol, meaning Boldend’s tool might have put Signal at risk too. WhatsApp’s silence on the issue didn’t just affect its users, it could have easily put Signal’s user base under fire.
As you can see, Meta has had quite a bad week, from finances on a downward trend to user growth stalling and topped off with the company’s own investor compromising the security of its product. Something tells me this isn’t the end of the company’s unlucky streak. Let’s stay tuned for more news.
