Meta earnings beat market expectations as ads revive

SAN FRANCISCO -- Facebook parent Meta on Wednesday beat market expectations for quarterly earnings, powered by a reviving digital ad business.

Meta reported a profit of $7.8 billion on $32 billion in revenue during the recently ended quarter, as the number of people using Facebook monthly rose to 3.03 billion.

"We had a good quarter," Meta chief executive Mark Zuckerberg said in an earnings call.

"We continue to see strong engagement across our apps and we have the most exciting roadmap I've seen in a while..."

Meta had suffered a rough 2022 amid a souring economic climate, which forced advertisers to cut back on spending, and Apple's data privacy changes, which allowed users to block ad targeting, the pillar of Meta's business.

But like the other big US tech companies, Meta's share price has had a stellar 2023 that Zuckerberg in January said would be the "year of efficiency".

"With two straight quarters of positive revenue growth and the first quarter of double-digit revenue growth since late 2021, Meta’s year of efficiency is off to a strong start," said Insider Intelligence analyst Debra Aho Williamson.

"There's a lot to feel good about when it comes to Meta right now," Williamson added.

Meta shares were up more than seven percent $320.32 in after-market trades.

In its earnings release, the company said that the number of ads on its various applications rose by 34 percent year-on-year in the second quarter.

Analysts noted the greater interest from advertisers in Reels, the video format copied from TikTok, and a less gloomy economic context conducive to marketing spending.

Meta is seeing "good progress" in bringing in money from Reels, with the video snippets played more than 200 billion times daily across Facebook and Instagram, Zuckerberg said.

VR costs

Meta's vow of austerity on spending brought an unprecedented round of cost-cutting that has seen the company lay off tens of thousands of workers since last November.

Meta said it had 71,469 employees at the end of June, a decrease of 14 percent from the same time a year earlier.

The company has faced criticism over its gamble on the metaverse, the world of virtual reality that Meta believes will be the next frontier online and led it to change its name from Facebook in 2021.

This to date has proved to be a bad bet with customers so far unenthused by the technology, even though Apple will enter the space sometime next year with the release of its expensive VisionPro headset.

Zuckerberg referred to the lackluster rate at which people are embracing the metaverse as a "somewhat sobering signal" but he remained confident it is a computing platform of the future.

The metaverse and AI remain priorities at Meta, according to Zuckerberg.

Meta said in the earnings report that it expects its operating losses at the unit responsible for VR to "increase meaningfully" in the year ahead.

The company has also jumped to take advantage of the chaos at Twitter, which has now been renamed to X.

Earlier this month Meta rushed out the release of Threads, a text-only app that saw more than 100 million downloads in just days, though the users' longterm interest remains unproven.

"We saw unprecedented growth out of the gate and, more importantly, we're seeing more people coming back daily than I'd expected," Zuckerberg said of Threads.

"Now we're focused on retention and improving the basics; I'm really happy with the path that we're on here."

On AI, Zuckerberg has chosen a different track than Microsoft and its partnership with OpenAI.

Meta instead has endorsed a more "open source" approach and made its Llama generative AI technology available to researchers and companies to adapt to their own needs.

Investors are keen to see how Meta expands use of generative AI in its products, questions on the earnings call showed.

Zuckerberg indicated in a recent podcast that his company is working on an AI platform that would allow creators and advertisers to more efficiently work together.

Agence France-Presse

Meta guru says ChatGPT-style AI is out-of-date

PARIS — The chief scientist for Facebook-owner Meta said that generative AI, the technology behind ChatGPT, was already at a dead end, instead promising new artificial intelligence resembling human rationality.

"Today AI and machine learning really sucks. Humans have common sense, machines don't," Yann LeCun told reporters at a Meta launch event in Paris.

LeCun spoke as Meta announced its latest AI project -- called image-based Joint Embedding Predictive Architecture, or JEPA.

The project seeks to move beyond ChatGPT-like generative AI and give machines the ability to conceptualize abstract ideas and not just regurgitate what exists online.

"Generative models are the past, we will abandon them in favor of joint embedding predictive architecture," LeCun said, touting the Meta project he will lead.

"My prediction is that in a few years, generative large language models will not be used any more, we will have a better thing to replace them," he added.

LeCun is considered a major thinker on AI and has been a critic of the hype around the generative AI models that power ChatGPT or the image-based Dall-E since they launched last year.

LeCun believes that the fears and excitement surrounding generative AI grossly inflate its actual capabilities.

In a Facebook post, Meta CEO Mark Zuckerberg said the JEPA tool was open source, meaning it would be available to researchers to tinker with.

He said the aim was to develop AI that "more closely reflects how people understand the world."

"We need models that perceive the world and make predictions. This research is another step in that direction," Zuckerberg added.

Compared to its rivals, Meta has taken a more discrete approach to ChatGPT-style AI for its social media platforms Facebook and Instagram.

Meta infused generative AI in its products, but without the same publicity as Microsoft or Google.

In parallel, it has also released open source AI models that require less computing power than the technology that powers ChatGPT.

Agence France-Presse

Apple mixed-reality headset to take aim at the metaverse

SAN FRANCISCO, United States — Apple on Monday is expected to show off pricy mixed-reality headgear at its annual Worldwide Developers Conference, challenging Facebook-owner Meta in a market that has yet to sizzle.

The iPhone maker has remained mum on reports that it is poised to unveil a headset for augmented or virtual reality experiences at its annual jamboree for developers and app designers.

The release would be the most significant product launch by the iconic iPhone maker since it unveiled the Apple Watch in 2015.

It could also invite more tensions between Apple CEO Tim Cook and Meta's Mark Zuckerberg who have feuded over the handling of their sprawling tech empires, especially over data issues and China ties.

Expectations are high that Apple will use the WWDC stage to spotlight a "Reality Pro" headset priced around $3,000, along with custom-made software for the gear, Wedbush analyst Dan Ives said in a note to investors.

"We believe Apple's Reality Pro will come with many apps and use cases," Ives said.

Cook is also expected to talk about the company's strategy when it comes to artificial intelligence, which has been in the spotlight since startup OpenAI released ChatGPT late last year.

The headset has been in development at Cupertino-based Apple for years, and will focus on gaming, streaming video and conferencing, as well as health and fitness, according to Ives.

It is also expected to synch closely with other Apple devices, following the company's strategy of using premium hardware to lock customers into other products and services.

"From all reports, Apple hoped to release a product that felt more like designer glasses than a gaming headset, but it's releasing something much bulkier," said Insider Intelligence principal analyst Yory Wurmser.

"It wants to get its device into the hands of early adopters and developers, who will start to build a (mixed reality) ecosystem around Apple software."

A report by Bloomberg described the headset as a high-tech pair of ski googles that would project a wearer's eyes and facial expressions on an external screen.

Just days before Apple's event, Meta ramped up its line of Quest virtual reality headgear.

A new-generation Quest 3 with improved performance and slimmed design will be available later this year at a starting price of $500, Zuckerberg said.

The Facebook founder described the coming model as Meta's "most powerful headset yet" and promised it would provide the best wireless way to experience virtual reality.

Metaverse bound 

Zuckerberg has been adamant that Meta remains devoted to building for a future in which internet life plays out in virtual worlds referred to as the metaverse.

"Meta has been the dominant VR manufacturer over the past several years, thanks to its cheap Quest devices," Wurmser said.

But Meta's experience with the metaverse has been humbling despite it being a leader in the emergent sector and many questioned whether Apple would in the end jump in.

And less than two years after changing its name to Meta to reflect a metaverse priority, the Facebook giant has fired tens of thousands of staff and promised to get back to its social media basics.

Meta's false start follows the failure of Google Glass, the search engine giant's decade long effort that was mothballed for good in March.

Agence France-Presse

Meta virtual money moves could include 'Zuck Bucks': report

SAN FRANCISCO, United States - Facebook's parent company Meta is exploring the potential of digital money referred to internally as "Zuck Bucks" in a play on the founder's name, the Financial Times reported.

Meta abandoned its effort to create a global cryptocurrency -- first called Libra but eventually re-branded as Diem -- in the face of fierce backlash by financial regulators around the world.

However, founder and chief Mark Zuckerberg has spoken about the importance of e-commerce and financial tools to his vision for an immersive online world called the metaverse.

"We continuously consider new product innovations for people, businesses, and creators," a Meta spokesperson said in response to an AFP inquiry.

"As a company, we are focused on building for the metaverse and that includes what payments and financial services might look like."

The spokesperson would not comment on specific innovations being pursued.

Products being considered at Meta include digital tokens similar to those used for transactions in video games, with the internet company's version nicknamed "Zuck Bucks" by those working on it, according to the Financial Times.

Popular games such as "Fortnite" and "Roblox" use tokens for transactions.

The tokens could potentially be used to reward creators and influencers whose posts draw online audiences.

Meta is looking to diversify its revenue beyond a reliance on targeted advertising that has provoked concerns about invading users' privacy.

Agence France-Presse

Meta rolls out parental supervision tools on Instagram

Facebook owner Meta Platforms Inc will allow parents to track how much time their children are spending on Instagram and will soon roll out parental supervision features on Quest virtual reality headsets, the company said.

The new parental controls are part of Meta's promise to protect children using its social media apps, after a whistleblower leaked internal documents that showed the company was aware that Instagram caused body image problems for some teenage girls.

The uproar resulting from the leaked documents led to Adam Mosseri, head of Instagram, testifying before Congress in December, where he was grilled about children's safety online. 

The Instagram supervision tools will be available in the United States beginning Wednesday and will roll out globally over the coming months, Meta said.

Parents will be able to view what accounts their children follow and can set time limits for how long their kids spend on the app.

In May, Meta will launch a dashboard that includes supervision tools for its Quest headsets and will automatically block teens from downloading age-inappropriate apps on Quest.

Parental supervision on both Instagram and Quest will require consent from teens, Meta said in a blog post.

The company added it plans to eventually allow parents to oversee their kids' activities across all of Meta's services from one central place.

-reuters

Facebook tests paid subgroups in subscription push

Facebook is testing ways for creators to make money through Facebook Groups, such as users paying fees for exclusive access to content or conversations within subgroups, the company said on Thursday.

Facebook, which recently changed its name to Meta, said the test was part of its broader paid subscription effort. The social media company is one of many tech giants that have been working to woo social media creators and their large followings through payments and new tools.

Facebook, which has in recent years focused on building communities as a tactic to drive engagement on the site, said Group administrators will be able to run e-commerce shops to sell merchandise or create community fundraisers, which could offset the costs of running a Group.

On Wednesday, CEO Mark Zuckerberg also said that creators would be able to share custom links allowing them to accept payments directly, in a swipe at Apple's subscription fees. Facebook launched its subscriptions service last year.

The company announced a series of updates to its Groups product during its live-streamed Communities Summit. It said the subgroups feature, which can be free or paid, would allow members to break off within groups to focus on certain regions or topics.

Facebook Groups have been under scrutiny from lawmakers and researchers who argue that they provide closed spaces for health misinformation, violent rhetoric and extremism to proliferate without being properly policed.

A company spokesperson said Facebook was testing community fundraisers with select Groups and that Groups created in the last 30 days, violate its content rules or frequently share harmful content or misinformation were not eligible.

-reuters