Facebook parent Meta on Wednesday reported that its revenue declined for a second consecutive quarter, hurt by falling advertising revenue amid competition from the wildly popular video app TikTok.
The quarters weak results raised fresh questions about whether Metas plans to spend $10 billion a year on the metaverse a concept that doesnt quite exist yet and possibly never will is prudent.
Metas disappointing results followed weak earnings reports from Google parent Alphabet Inc. and Microsoft this week. The Menlo Park, California, company earned $4.4 billion, or $1.64 per share, in the three month period that ended Sept. 30. Thats down 52% from, $9.19 billion, or $3.22 per share, in the same period a year earlier.
Analysts were expecting a profit of $1.90 per share, on average, according to FactSet.
Revenue fell 4% to $27.71 billion from $29.01 billion, slightly higher than the $27.4 billion that analysts had predicted.
Metas stock tumbled 14% in after-hours trading.
Some of the companys investors are concerned Meta is spending too much money and confusing people with its focus on the metaverse, a virtual, mixed and augmented reality concept that few people understand while it also grapples with a weakening advertising business.
Meta has drifted into the land of excess too many people, too many ideas, too little urgency, wrote Brad Gerstner, the CEO of Meta shareholder Altimeter Capital, earlier this week in a letter to Meta CEO Mark Zuckerberg. This lack of focus and fitness is obscured when growth is easy but deadly when growth slows and technology changes.
Meta also forecast weaker-than-expected revenue for the current quarter, further raising worries that the revenue decline is more of a trend than an aberration.
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