Social media platform Facebook recorded a drop in the number of its daily active users for the first time in 18 years of its existence, along with lower ad growth. Following the news, Meta shares were down roughly 20%, and this massive stock drop wiped around $200 billion off the company's market value.
Daily Active Users (DAU) is a tool that measures the success of an online product. It represents the number of users who are active on a website or app during the day.
In the third quarter of 2021, Facebook had 1.93 billion daily active users, while in the last three months of 2021, this number decreased to 1.929 billion, the quarterly earnings report of Meta revealed.
Meta CEO Mark Zuckerberg believes that the main reason for this decline is an unprecedented level of competition from fast-growing competitors like TikTok as people watch more and more short videos online. He revealed that Meta is investing heavily in developing its own short-video product, Reels, to compete with TikTok.
In addition, the company's digital advertising platform was also hit by Apple's privacy changes, which made it more difficult for brands to target and measure advertising on Instagram and Facebook.
While Facebook has been trying to attract the attention of a younger audience, TikTok has grown rapidly to become one of the most used and downloaded apps in the world, and it shows no signs of slowing down.