Meta recently reported robust Q3 results, showcasing a 23% surge in revenue, signalling the revival of its core digital ads business after a challenging 2022. The company exceeded expectations with earnings per share reaching $4.39. Moreover, Meta boasts impressive user numbers with 2.09 billion daily active users and 3.05 billion monthly active users. This remarkable growth is setting the social media giant ahead of competitors like Google and Snap, especially in terms of ad revenue.
However, despite these impressive financial results, Meta’s stock initially experienced a boost in after-hours trading but took a sudden downturn, plunging by more than 3%. The shift came in response to cautionary statements made by Meta’s finance chief, Susan Li, who expressed concerns about potential ad vulnerabilities linked to the Middle East conflict.
A notable highlight from Meta’s recent performance is the increasing importance of Generative AI within the company. AI-driven recommendation systems are making significant strides in improving feeds, Reels, ads, and content integrity. Notably, these recommendations have contributed to a 7% increase in the time users spend on Facebook and a 6% increase on Instagram. Over half of Meta’s advertisers are actively utilising their AI tools, and the Advantage+ Shopping Campaigns have achieved an impressive $10 billion run rate.
Particularly in India, WhatsApp is thriving, with 60% of users regularly messaging business accounts each week. This increased engagement has translated into substantial growth, with Click-to-Message ads revenue in India doubling year on year. This emphasises the growing significance of AI-driven technologies in Meta’s operations, reflecting the company’s commitment to enhancing user experiences and its advertising ecosystem.
Addictive Trouble
These numbers come at the heel of 33 American states jointly filing a lawsuit against Meta Platforms in California, the parent company of Facebook and Instagram, accusing the social media giant of harming young people and contributing to a mental health crisis among its users. The lawsuit specifically alleges that Meta knowingly and deliberately designed features that addict children to its platforms. The suit claims that platforms like Instagram are linked to issues such as depression, anxiety, and insomnia in kids.
According to the lawsuit filed in California, Meta has been collecting data on children under 13 without their parents’ consent, which is a violation of US law, specifically the Children’s Online Privacy Protection Act.
The origins of these claims lie in the release of documents by Frances Haugen, a whistleblower in 2021. These documents, known as the “Facebook Files,” were based on Meta’s own research and revealed that the company was aware of the negative impact of Instagram on teenagers’ mental health and self-esteem. For example, one internal study found that a significant percentage of teen girls reported that Instagram worsened their mental health.
Amid the row in US Union Minister Rajeev Chandrasekhar announced that social media platforms will no longer enjoy “free pass” or “immunity” and emphasized that strict accountability will be enforced in India and globally.
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