The social-media giant loses hundreds of billions in value as users leave for TikTok.
Losing Face(book)
America’s Strategic Schadenfreude Reserve was replenished today as Facebook Meta lost $230 billion in market value, or 1.3 Bezoses, on signs its grip on our psyches is loosening just the tiniest bit — even if the new iron fist belongs to TikTok.
Facebook still has billions of users and many fans, but the Venn diagram of the two groups is far from a perfect circle. Many use it grudgingly, because it’s still the best way to yell at local parents, swap vaccine misinformation, or seethe over hurtful photos of high school enemies living their best lives. But its overpowering capacity to poison the body politic has long inspired calls for it to be cut down to size somehow, through regulation or ritual dismemberment.
But maybe all we had to do was wait for universal laws — of evolution, thermodynamics or goofy dances — to bring Facebook low on their own. The company lost users in the latest quarter, Parmy Olson notes, a previously unthinkable idea that contributed to its market bloodletting today. Facebook growth has peaked, and Mark Zuckerberg does not appear to have a time machine to reverse that.
The company still has almost all its chips placed on internet advertising, Parmy writes in a second column, a level of concentration topping even that of the ad behemoth Google Alphabet. The latter company saw the climate souring for the ad business a while back, which is why it’s made a belated push into cloud computing, just for a shred of diversification.
Facebook hasn’t even gotten that far. It recently ditched its crypto plans and is spending kajillions of dollars on the metaverse, aka Second Life: The Squeakquel, which might pay off many years in the future, if ever. Meanwhile, Tae Kim writes, it was unprepared for lithe little TikTok, which has zoomed past it in energy and influence, if not yet total users. Instagram Reels just isn’t cutting it.
Parmy suggests the best outcome for Facebook could be to end up like another formerly despised tech giant: Microsoft. Under Satya Nadella, it has become the tech giant most likely to be ignored, quietly growing solid roots in businesses from cloud computing to gaming and social media. It is also, after today, much bigger than Facebook, by about 0.4 Bezoses.
States of Emergency
I’ll never forget the day after Hurricane Irene, when my New Jersey neighbors and I gathered outside under a perfectly blue sky to share notes and gratitude for surviving the storm — and then watched as a tree belatedly dropped right on a neighbor’s house.
The lessons here are:
- Watch out for trees.
- Sometimes localized disasters happen in the aftermath of bigger ones.
For most of the pandemic, federal largesse has helped New York City’s economy defy pronouncements of its death. But with inflation annoyingly refusing to be transitory, federal spending is drying up and the Fed is starting to kick the props away from the U.S. economy. This shouldn’t be a big problem for municipalities where unemployment is low, writes Conor Sen. But big cities such as New York and Los Angeles, which rely much more on a service economy still in the grips of the pandemic, have higher unemployment and are less prepared to weather an economic slowdown. That tree could fall on us yet.
