WEBVTT - The Big Tech Stories of 2022: Meta Had a Very Bad Year 0:00:04.440 --> 0:00:07.840 Welcome to Text Stuff, a production from I Heart Radio. 0:00:11.840 --> 0:00:14.600 Hey there, and welcome to tech Stuff. I'm your host 0:00:14.720 --> 0:00:18.920 Jonathan Strickland, Diamond executive producer with I Heart Radio. How 0:00:19.320 --> 0:00:23.200 the tech are you? We are continuing our look back 0:00:23.280 --> 0:00:26.880 over some of the biggest text stories of twenty twenty two. 0:00:27.240 --> 0:00:30.479 On Monday, we talked about how governments and regulators around 0:00:30.520 --> 0:00:33.040 the world are starting to push back on big tech. 0:00:33.720 --> 0:00:37.080 Yesterday we talked about the crypto winter and how that 0:00:37.200 --> 0:00:39.640 has affected everything from n f t S to HAVE 0:00:39.840 --> 0:00:45.280 three hype. And today we're primarily almost exclusively going to 0:00:45.360 --> 0:00:51.040 talk about Meta's very bad two. But let's start off 0:00:51.040 --> 0:00:55.640 by talking about where Meta was coming into two, which 0:00:55.640 --> 0:00:59.480 means we got to talk a little bit about now. 0:01:00.520 --> 0:01:04.240 It was in the springtime of one when Apple would 0:01:04.240 --> 0:01:08.040 deliver what would ultimately become a massive blow to Facebook, 0:01:08.360 --> 0:01:11.600 which is what META was called back then, and this 0:01:11.720 --> 0:01:15.920 was in the form of Apple's App Tracking Transparency or 0:01:16.040 --> 0:01:21.000 a t T policy. So before this feature was implemented, 0:01:21.319 --> 0:01:26.200 app developers could potentially gather data about an iOS users 0:01:26.240 --> 0:01:30.720 activity on their phone, all by tracking Apple's I d F, 0:01:30.720 --> 0:01:36.360 a identifier that's an identification that's unique to each iOS user, 0:01:36.840 --> 0:01:39.440 then you could track what they were doing, how they 0:01:39.440 --> 0:01:42.160 were behaving on the phone, and use that information right 0:01:42.880 --> 0:01:46.680 But once the A T T feature went live, iOS 0:01:46.720 --> 0:01:50.080 device owners would get a prompt when they were launching 0:01:50.120 --> 0:01:54.480 an app that was wanting to track their activity, and 0:01:54.560 --> 0:01:57.680 they would be given the option to allow that app 0:01:57.760 --> 0:02:01.480 track them or to opt out. Once folks had the 0:02:01.480 --> 0:02:03.760 option to opt out, a lot of them began to 0:02:03.760 --> 0:02:08.640 take it. By the way, Apple does not necessarily have 0:02:08.880 --> 0:02:12.839 to worry about adhering to this the same way that 0:02:13.000 --> 0:02:17.520 other developers do on iOS devices, which has led a 0:02:17.520 --> 0:02:21.600 lot of companies, including Meta, to accuse Apple of specifically 0:02:21.680 --> 0:02:25.840 launching this feature in order to hurt other companies while 0:02:25.919 --> 0:02:31.880 not suffering itself, But that's a matter for another episode. Anyway, 0:02:32.480 --> 0:02:36.679 Apple's move was a big blow to Facebook because ultimately Facebook, 0:02:37.000 --> 0:02:41.639 the company, relies upon advertising revenue as the prime source 0:02:41.680 --> 0:02:45.440 of revenue for its business, and advertisers would pay top 0:02:45.560 --> 0:02:51.720 dollar to access Facebook's incredibly thorough databases on user activities 0:02:51.760 --> 0:02:55.720 and behaviors and profiles and and such, so that user 0:02:55.760 --> 0:02:59.400 information would provide a chance to target those users for 0:02:59.480 --> 0:03:05.320 ads with incredible precision. But once Apple starts giving iOS 0:03:05.440 --> 0:03:09.640 users a chance to opt out of tracking. That cuts 0:03:09.639 --> 0:03:13.400 off the flow of some of that precious data to Facebook, 0:03:13.600 --> 0:03:15.560 and that would go on to play a big part 0:03:15.639 --> 0:03:22.600 in Meta's financial performance in tw two. Now, I don't 0:03:22.600 --> 0:03:25.720 know about you, but to me, it feels like it 0:03:25.800 --> 0:03:29.799 was an eternity ago when Facebook officially changed its name 0:03:29.840 --> 0:03:35.320 to Meta. But that was actually on October, so a 0:03:35.360 --> 0:03:38.400 little more than a year ago as I record this episode. 0:03:39.040 --> 0:03:43.040 Facebook made that move at a pretty tumultuous time. This 0:03:43.040 --> 0:03:48.080 would be after Francis Hogan, a former Facebook employee, had 0:03:48.280 --> 0:03:53.600 come forward with tons of documents from Facebook. These documents 0:03:53.640 --> 0:03:58.040 showed how internally the company was struggling with problems like 0:03:58.200 --> 0:04:05.640 content moderation and managing misinformation and things like like political manipulation, 0:04:05.760 --> 0:04:08.520 stuff like that. So these documents painted a pretty ugly 0:04:08.560 --> 0:04:12.920 and cynical picture of the company from within, and the 0:04:13.000 --> 0:04:16.800 timing of Facebook's name change left some folks wondering if 0:04:16.839 --> 0:04:19.680 maybe Mark Zuckerberg was trying, at least in part, to 0:04:19.880 --> 0:04:24.040 shrug off some of the dirt being heaped his way 0:04:24.360 --> 0:04:29.840 in the wake of these these revelations. Now, the official 0:04:29.920 --> 0:04:33.640 reasons for the name change, we're really number one to 0:04:33.800 --> 0:04:37.600 distinguish the overall company from one of its products. So, 0:04:37.640 --> 0:04:41.640 in other words, the difference between Facebook the company and 0:04:41.680 --> 0:04:45.239 Facebook the platform. So this way you now have meta 0:04:45.400 --> 0:04:49.080 the company and Facebook the platform, because that's just one 0:04:49.200 --> 0:04:53.440 of the company's products. Right. Two, it was a way 0:04:53.480 --> 0:04:58.520 to indicate the company's new focus towards this idea of 0:04:58.920 --> 0:05:02.800 the metaverse and that being the future of being online 0:05:03.320 --> 0:05:08.080 now towards the end of this metaverse concept was really 0:05:08.480 --> 0:05:11.560 at the height of the hype cycle, despite the fact 0:05:12.160 --> 0:05:15.400 that no one could really define what the metaverse was 0:05:15.480 --> 0:05:19.359 because it has not yet been built. So the general 0:05:19.440 --> 0:05:21.960 feeling was that the metaverse is going to be some 0:05:22.000 --> 0:05:26.120 sort of persistent online construct that people will be able 0:05:26.160 --> 0:05:30.320 to explore. Uh, they'll probably be using virtual reality and 0:05:30.640 --> 0:05:34.600 or augmented reality gear to access it, and that's kind 0:05:34.640 --> 0:05:38.080 of the high level concept. But when it comes down 0:05:38.080 --> 0:05:41.560 to details, everything gets really fuzzy because we're just not 0:05:41.800 --> 0:05:44.840 there yet. In fact, we're not even close, and Mark 0:05:44.960 --> 0:05:48.360 Zuckerberg has said as much repeatedly. It's going to take 0:05:48.480 --> 0:05:51.240 years to get to a destination that will match up 0:05:51.240 --> 0:05:53.680 to the metaverse concept. We've got a lot of like 0:05:54.560 --> 0:06:01.080 metaverse adjacent stuff. People have argued that Fortnite or roadblocks 0:06:01.120 --> 0:06:06.599 represent a kind of proto metaverse, and in a very 0:06:06.680 --> 0:06:10.159 limited way, I suppose that's true, but it's nowhere close 0:06:10.200 --> 0:06:12.840 to the scale of what people are talking about when 0:06:12.839 --> 0:06:16.800 they're really talking about the metaverse. So anyway, this is 0:06:16.880 --> 0:06:20.159 kind of where Meta slash Facebook was when it was 0:06:20.320 --> 0:06:24.040 heading into two. As the company started the year, its 0:06:24.040 --> 0:06:28.559 stock price was around the three dollars a share mark. 0:06:29.240 --> 0:06:33.200 But in February of two, we heard about how the 0:06:33.279 --> 0:06:37.560 final quarter of one had treated Meta and the news 0:06:37.680 --> 0:06:42.880 wasn't good. So this was regarding Meta's financial performance at 0:06:42.920 --> 0:06:45.880 the end of one, but we didn't learn about it 0:06:45.960 --> 0:06:49.760 until February two. So, for one thing, the effects of 0:06:49.800 --> 0:06:54.880 Apple's app tracking transparency policy we're starting to become evident. 0:06:55.000 --> 0:06:56.800 Everyone knew that was going to have an effect, but 0:06:56.800 --> 0:06:59.880 now we were starting to see. And the company referenced 0:07:00.320 --> 0:07:03.360 the policy a few times while delivering the earnings results 0:07:03.400 --> 0:07:06.120 to investors, saying, you know, part of this is because 0:07:06.200 --> 0:07:10.480 Apple has fired shots at us. Now. In that same call, 0:07:10.880 --> 0:07:15.640 Cheryl Sandberg, who at the time was Meta's Chief operating 0:07:15.720 --> 0:07:19.680 officer or CEO, acknowledged that the company was going to 0:07:19.720 --> 0:07:24.280 need to make some significant changes to its targeted advertising strategy, 0:07:24.320 --> 0:07:30.920 perhaps shifting two approaches that emphasize aggregate and anonymized data. 0:07:31.160 --> 0:07:36.360 As competitors and regulators alike, we're pushing back against the 0:07:36.920 --> 0:07:40.200 you know, more established method of just scooping up all 0:07:40.240 --> 0:07:43.080 the information you can about every specific person you can. 0:07:44.160 --> 0:07:50.360 So Litling Meta was acknowledging this is an unsustainable approach 0:07:50.480 --> 0:07:55.160 because there's growing resistance around the world and competitors are 0:07:55.240 --> 0:07:59.200 actively taking advantage by throwing monkey wrenches into the works, 0:07:59.200 --> 0:08:02.000 like Apple was. So they're saying, well, we need to 0:08:02.120 --> 0:08:06.480 change our strategy because one, this is not really palatable 0:08:06.840 --> 0:08:09.120 that we're getting into more and more hot water from 0:08:09.160 --> 0:08:13.600 the way we're collecting people's data, and too, companies we 0:08:13.640 --> 0:08:17.600 depend upon to supply us information have gotten wise and 0:08:17.640 --> 0:08:21.600 they're cutting off those avenues. So that's kind of what 0:08:21.760 --> 0:08:26.160 she was indicating. Then there was the matter of Meta's 0:08:26.200 --> 0:08:29.880 commitment to developing the metaverse. Zuckerberg had tried to get 0:08:29.880 --> 0:08:32.640 ahead of this. Towards the end of one he indicated 0:08:32.720 --> 0:08:37.160 that building this vision of the future of the online 0:08:37.160 --> 0:08:41.920 world is going to require massive investments, and that this 0:08:41.960 --> 0:08:45.319 investment was going to eat into profits as a result. 0:08:45.400 --> 0:08:49.839 But I think investors were still taken aback when they 0:08:49.880 --> 0:08:54.840 saw a decline in profits in the Q four results, 0:08:55.760 --> 0:08:59.120 because here's the thing. Investors really like seeing certain numbers 0:08:59.160 --> 0:09:03.040 go up and not go down. So it's not enough 0:09:03.080 --> 0:09:05.640 for your company to make a profit. That's not good enough. 0:09:05.679 --> 0:09:08.360 You've got to make more profit than you did the 0:09:08.440 --> 0:09:12.120 last time you made a profit. Otherwise you're a loser. 0:09:12.920 --> 0:09:15.160 And as I get older, yes, I get more and 0:09:15.160 --> 0:09:19.400 more bitter about our peculiar approach to capitalism. Or maybe 0:09:19.600 --> 0:09:21.960 maybe it's not our peculiar approach. Maybe this is just 0:09:22.000 --> 0:09:26.800 where capitalism ultimately leads. But anyway, I think you know this. 0:09:26.800 --> 0:09:30.160 This belief that it's not enough to profit, you have 0:09:30.240 --> 0:09:34.960 to profit more than you did before is inherently destructive 0:09:35.040 --> 0:09:40.120 over time. Anyway, enough of my soap boxing. The decline 0:09:40.160 --> 0:09:43.760 and profitability sent a couple of messages to investors, and 0:09:43.840 --> 0:09:46.280 one was that meta for at least the near future, 0:09:47.280 --> 0:09:50.600 is itself going to be an investment mode in order 0:09:50.640 --> 0:09:54.679 to make this vision of the metaverse become a reality. 0:09:55.280 --> 0:09:57.880 This is a future that a ton of companies were 0:09:57.880 --> 0:10:00.760 already starting to gloam onto, despite the fact that there's 0:10:00.800 --> 0:10:05.000 not much there there and my own company does this 0:10:05.120 --> 0:10:08.439 at least to an extent, and I do understand it, 0:10:08.760 --> 0:10:11.600 even if I don't fully like get on board with it. 0:10:11.679 --> 0:10:15.400 I understand it if the metaverse ends up being the 0:10:15.400 --> 0:10:17.280 future of the Internet, which is a big if, but 0:10:17.440 --> 0:10:20.280 if it does, then you want to be in on 0:10:20.320 --> 0:10:23.760 the ground floor. Because back when smartphones took off and 0:10:23.840 --> 0:10:27.400 people began to access the Internet more and more using 0:10:27.480 --> 0:10:31.880 smartphones than they were on laptops and desktops, that really 0:10:31.920 --> 0:10:34.920 shook things up because suddenly all these companies realized they 0:10:34.960 --> 0:10:39.320 needed to cater more toward smartphone users than desktop users. 0:10:39.920 --> 0:10:42.160 And this is where we started to see an explosion 0:10:42.240 --> 0:10:45.079 and app development, because everybody had to have their own app, 0:10:45.760 --> 0:10:48.880 even if it didn't make sense. Everyone had to to 0:10:49.640 --> 0:10:55.840 uh to create websites that were mobile friendly because otherwise 0:10:55.880 --> 0:10:58.760 it was a pain in the butt to navigate these 0:10:58.800 --> 0:11:01.680 websites on your smartphone. So a lot of web based 0:11:01.720 --> 0:11:04.800 companies had not anticipated this change, and it meant that 0:11:04.840 --> 0:11:07.000 they were left playing catch up when it happened. So 0:11:07.040 --> 0:11:11.200 I do understand the desire to not let that happen 0:11:11.240 --> 0:11:15.280 again and instead to be a leader in the metaverse 0:11:15.320 --> 0:11:18.960 space rather than too you know, hold back and then 0:11:19.000 --> 0:11:20.880 find out that you're left behind. You have to try 0:11:20.920 --> 0:11:25.400 and regain relevancy later on. The only problem is, I'm 0:11:25.440 --> 0:11:29.400 not really sure that the metaverse is actually the future 0:11:29.600 --> 0:11:34.400 of online That being said, I could just be shortsighted 0:11:34.640 --> 0:11:37.920 and that you know, I'm the one who's totally in 0:11:37.960 --> 0:11:40.600 the wrong here. It's it's fully possible. In fact, it's 0:11:40.720 --> 0:11:44.440 lightly that that's the case. I just it's hard for 0:11:44.480 --> 0:11:47.920 me to see it anyway. Another bit of news that 0:11:48.000 --> 0:11:52.119 shed some light on Zuckerberg's hard push for the metaverse 0:11:52.679 --> 0:11:56.439 was that, for the first time in its eighteen years 0:11:56.679 --> 0:12:02.520 as a platform, Facebook posted a loss of active users 0:12:02.679 --> 0:12:05.560 quartered a quarter. At the end of one the number 0:12:05.600 --> 0:12:08.720 of active users on Facebook was down by about half 0:12:08.760 --> 0:12:12.080 a million people, a lot of them in places like 0:12:12.160 --> 0:12:17.240 Africa and India. Now, keep in mind, Facebook still had 0:12:17.280 --> 0:12:21.440 more than one point nine billion active users, but there 0:12:21.520 --> 0:12:25.920 was a concern that this drop might indicate the beginning 0:12:25.920 --> 0:12:30.960 of a slide for Facebook. And I I'm sure several 0:12:31.040 --> 0:12:32.720 of you out there are saying the same thing I 0:12:32.720 --> 0:12:35.320 said when I first read this, is that one point 0:12:35.360 --> 0:12:38.280 of data is not a trend. Yes, you know, it's 0:12:38.320 --> 0:12:42.240 not good to have lost a half million users over 0:12:42.320 --> 0:12:46.040 the course of a quarter, but you can't be certain 0:12:46.120 --> 0:12:49.880 that this is the start of something from one point 0:12:49.880 --> 0:12:53.839 of data. However, that doesn't stop investors from doing just that, 0:12:54.880 --> 0:12:59.240 So it's also no secret. In fact, it's a it's 0:12:59.320 --> 0:13:03.720 it's a Joe, it's a meme that Facebook's demographic is 0:13:03.800 --> 0:13:06.760 aging that the company is having a real hard time 0:13:07.200 --> 0:13:12.320 attracting younger people to its platforms, particularly Facebook, because who 0:13:12.360 --> 0:13:15.880 the heck wants to join a social network when they're 0:13:15.880 --> 0:13:19.080 a kid that their parents are already on or maybe 0:13:19.200 --> 0:13:23.040 even their grandparents are on it. That's not really cool 0:13:23.080 --> 0:13:25.640 if you're a kid, right, you don't want to be 0:13:25.800 --> 0:13:30.120 where all the old people are. Meta needed to get 0:13:30.640 --> 0:13:35.440 young blood hooked on its platforms, which is one of 0:13:35.480 --> 0:13:38.440 the reasons I think that Instagram really started to launch 0:13:38.520 --> 0:13:44.080 features that appeared to mimic what TikTok was doing, so 0:13:44.640 --> 0:13:47.920 you could see the metaverse as another way to try 0:13:47.960 --> 0:13:51.840 and scoop up the next generation of users. So it 0:13:51.920 --> 0:13:55.080 might be a hard sell to get the younger folks 0:13:55.080 --> 0:13:57.960 of today on Facebook. That's gonna be hard to do 0:13:58.040 --> 0:14:02.080 because Facebook is just not cool. Instagram might be a 0:14:02.160 --> 0:14:05.760 little more successful, but it looks like it's following the 0:14:05.800 --> 0:14:10.160 same trends as Facebook. At a one point, Meta was 0:14:10.200 --> 0:14:14.839 developing and Instagram specifically for younger users, but in the 0:14:14.840 --> 0:14:19.560 wake of those whistleblower events and at the end of 0:14:19.600 --> 0:14:22.320 the company had to backtrack on that because they have 0:14:22.440 --> 0:14:25.400 a pretty terrible record when it comes to things like 0:14:25.800 --> 0:14:30.560 content moderation and user privacy and safety, and when it 0:14:30.600 --> 0:14:35.280 comes to kids, people take that stuff seriously. So Meta's 0:14:35.440 --> 0:14:40.400 plan to try and tap into that young customer market 0:14:41.240 --> 0:14:45.040 was waylaid quite a bit, and it was through all 0:14:45.120 --> 0:14:48.520 fault of its own. So you have to then go 0:14:48.600 --> 0:14:51.360 out there and invent the next big thing to get 0:14:51.360 --> 0:14:54.400 ahead of it, right, Like the ship has already sailed 0:14:54.720 --> 0:14:58.800 on TikTok unless TikTok gets banned in the United States, 0:14:58.800 --> 0:15:03.280 which will talk talk about in another episode. But unless 0:15:03.280 --> 0:15:07.960 that happens, then the only course open to Meta is 0:15:08.000 --> 0:15:11.320 to invent the next big thing. So the metaverse might 0:15:11.320 --> 0:15:15.480 well be Mark Zuckerberg's Hail Mary pass to keep his 0:15:15.560 --> 0:15:19.000 company relevant over the long run. All right, We've got 0:15:19.040 --> 0:15:21.600 a lot more to say about Meta in two, but 0:15:21.640 --> 0:15:23.920 before we get to that, let's take a quick break. 0:15:34.360 --> 0:15:38.400 We're back. So while Zuckerberg is trying to create this metaverse. 0:15:38.440 --> 0:15:42.080 That dedication is costing a lot of money, and the 0:15:42.080 --> 0:15:45.240 company also has showed its hand when it updated its 0:15:45.240 --> 0:15:49.480 revenue projections for the first quarter of twenty two. Wall 0:15:49.560 --> 0:15:53.920 Street had previously predicted revenue of around thirty billion dollars 0:15:54.200 --> 0:15:58.880 for Q one two of of Meta, but Meta's projections 0:15:58.880 --> 0:16:01.400 fell short. It was more like twenty seven to twenty 0:16:01.520 --> 0:16:05.960 nine billion. So this was also a message sent to 0:16:05.960 --> 0:16:08.640 investors of things are not going to be quite as 0:16:09.240 --> 0:16:14.040 positive as you might have previously thought. The decrease in profits, 0:16:14.120 --> 0:16:17.040 the increase in expenditures, the loss of half a million 0:16:17.120 --> 0:16:21.520 Facebook users collectively, all this news gave investors bad mojo, 0:16:21.920 --> 0:16:25.200 and in aftermarket trading in the wake of this earnings call, 0:16:25.600 --> 0:16:29.000 Meta's stock prices dropped from around three twenty three dollars 0:16:29.000 --> 0:16:32.160 a share to two hundred fifty two dollars a share. 0:16:33.120 --> 0:16:36.920 That's a huge drop and things would not really improve 0:16:37.040 --> 0:16:40.200 over the course of the year. As I record this episode, 0:16:40.240 --> 0:16:43.600 Meta stock is at around a hundred seventeen dollars a year. 0:16:43.680 --> 0:16:46.040 In fact, it dropped below a hundred seventeen at one 0:16:46.040 --> 0:16:49.400 point while I was writing this. So yeah, if you 0:16:49.440 --> 0:16:51.960 started off in the three thirties and now you're down 0:16:51.960 --> 0:16:55.040 to one seventeen. Things have not gone well, but it 0:16:55.120 --> 0:16:58.520 has been a more gradual decline through two. We saw 0:16:58.520 --> 0:17:01.440 that sharp drop in February after the Q one earnings 0:17:01.440 --> 0:17:05.040 call or Q four nings called excuse me. But since 0:17:05.080 --> 0:17:08.520 then it's been more of a gradual decline. And there 0:17:08.640 --> 0:17:12.119 was one point in November where the stock price actually 0:17:12.119 --> 0:17:16.440 dipped below ninety dollars. So it's not as bad as 0:17:16.480 --> 0:17:20.560 it was back in November, which I guess is saying something. Now, 0:17:20.600 --> 0:17:24.000 one thing that Meta could not have predicted. You cannot 0:17:24.040 --> 0:17:26.639 blame the company for this, but it is something that 0:17:26.760 --> 0:17:30.200 very much has had an impact on the company. Happened 0:17:30.800 --> 0:17:36.640 in late February two. That's when Russia invaded Ukraine. Now 0:17:36.680 --> 0:17:40.720 I'm sure that I'll at least mention this war in 0:17:40.920 --> 0:17:43.560 other episodes in this series as we look back at 0:17:43.560 --> 0:17:49.000 the tech news of two. Now, in March two, Russia's 0:17:49.119 --> 0:17:54.160 federal regulator Roscom Natzer, which I'm sure I mispronouncing, shut 0:17:54.200 --> 0:17:58.640 down access to Facebook within Russia. So this was part 0:17:58.680 --> 0:18:02.520 of Russia, or at least the government of Russia, attempting 0:18:02.560 --> 0:18:06.480 to control the narrative with regards to the war in Ukraine, 0:18:06.480 --> 0:18:09.400 which the Russian government was insisting was just a quote 0:18:09.480 --> 0:18:14.560 unquote special military operation at the time. They would then 0:18:14.600 --> 0:18:19.720 go on to subsequently block Instagram in Russia, which was 0:18:19.880 --> 0:18:24.560 yet another blow to Meta. Russian representatives called Facebook and 0:18:24.640 --> 0:18:31.040 Instagram extremist, which the company appealed in June of two. 0:18:32.000 --> 0:18:35.720 It lost that appeal. That is not really a surprise 0:18:35.800 --> 0:18:40.040 because the Russian court system typically sides with government prosecutors 0:18:40.080 --> 0:18:43.840 in court cases. Big shock there, and Meta missed a 0:18:43.880 --> 0:18:48.119 subsequent deadline in November to appeal the ban a second time. 0:18:49.000 --> 0:18:52.160 As a little side note, Russian reps said that Russians 0:18:52.160 --> 0:18:55.800 who accessed the platforms by relying on tools like virtual 0:18:55.840 --> 0:19:00.480 private networks or VPNs would not be punished for doing that. However, 0:19:01.000 --> 0:19:04.840 Russia had also already restricted the use of several popular 0:19:05.000 --> 0:19:11.000 VPNs within the country, and in two even Kaspersky, which 0:19:11.080 --> 0:19:14.880 itself is a Russian company, announced that it was going 0:19:14.920 --> 0:19:18.440 to end its VPN service within Russia. It would honor 0:19:18.480 --> 0:19:22.800 any existing subscriptions until they expire or until the end 0:19:22.840 --> 0:19:26.879 of three So yeah, you know, Russia's really cracking down 0:19:27.359 --> 0:19:33.480 on people having a way of accessing or expressing information 0:19:33.560 --> 0:19:42.800 that might contradict the government narrative around Russia's invasion of Ukraine. Anyway, 0:19:43.000 --> 0:19:46.800 the laws of the Russian market obviously would impact Meta's revenue, 0:19:46.960 --> 0:19:49.600 and of course that wasn't the only aspect of Russia's 0:19:49.640 --> 0:19:53.120 war with Ukraine that would have an impact on the company. 0:19:53.200 --> 0:19:55.639 As you might suspect, Facebook would have to deal with 0:19:55.760 --> 0:20:00.280 various misinformation campaigns aimed at spreading false news about the 0:20:00.359 --> 0:20:05.280 ongoing war. In September of two, Meta announced it had 0:20:05.280 --> 0:20:09.680 shut down two networks of fake accounts designed to spread misinformation. 0:20:10.119 --> 0:20:12.800 One of them, the smaller of the two, originated in 0:20:12.960 --> 0:20:17.359 China and the other in Russia. The Chinese network, like 0:20:17.359 --> 0:20:20.639 I said, was relatively small and it was mostly aimed 0:20:20.680 --> 0:20:25.920 at influencing mid term elections, which had really no measurable impact. 0:20:25.960 --> 0:20:29.920 I think the Russian campaign was far larger, and Meta 0:20:30.000 --> 0:20:32.159 said that the campaign had spent more than a hundred 0:20:32.200 --> 0:20:36.880 thousand bucks on ads both on Facebook and on Instagram 0:20:36.920 --> 0:20:40.080 in an effort to push pro Kremlin stories regarding the 0:20:40.080 --> 0:20:44.840 war in Ukraine. So they shut those down. So again, 0:20:45.119 --> 0:20:48.480 that war continues to have an impact on Meta, as 0:20:48.480 --> 0:20:53.959 well as numerous other tech companies. Now, moving on with 0:20:54.080 --> 0:20:58.520 Meta's very bad year. It's earnings call in Q one 0:20:59.119 --> 0:21:03.600 met the adjusted projections Meta had made because the company 0:21:03.640 --> 0:21:06.760 brought in twenty seven point nine billion dollars in revenue, 0:21:07.200 --> 0:21:09.639 so it sort of hit the middle of the range 0:21:09.680 --> 0:21:13.119 it had predicted. It said twenty nine it got twenty 0:21:13.119 --> 0:21:17.320 seven point nine. Ad revenues were slightly down, but the 0:21:17.359 --> 0:21:20.280 company did say that more users had joined across all 0:21:20.320 --> 0:21:24.040 platforms owned by the company, so it was not showing 0:21:24.119 --> 0:21:28.240 a continued loss of Facebook users, so again there was 0:21:28.240 --> 0:21:34.439 no trend there. However, in July, the company reported a 0:21:34.560 --> 0:21:37.840 decline in revenue. It was just a one percent drop 0:21:38.280 --> 0:21:41.440 year over year of a decline in revenue, but that 0:21:41.480 --> 0:21:45.240 was the first time Meta had ever posted a drop 0:21:45.359 --> 0:21:49.080 in revenue since it had become a publicly traded company. 0:21:49.560 --> 0:21:53.760 Profits were down significantly more than one percent. It was 0:21:53.880 --> 0:21:57.560 backed down by thirty six percent year over year. But again, 0:21:57.600 --> 0:22:01.639 this is understandable when you start thinking about the ongoing 0:22:01.760 --> 0:22:06.119 huge expense of trying to make the metaverse happen, which is, 0:22:06.359 --> 0:22:09.240 you know, kind of giving me mean girls vibes. Stop 0:22:09.280 --> 0:22:12.359 trying to make the metaverse happen. It's not going to happen. 0:22:13.440 --> 0:22:15.920 Note I do not actually know if the metaverse will 0:22:15.960 --> 0:22:19.120 in fact not happen. It probably will, and I'll probably 0:22:19.160 --> 0:22:23.280 be salty about it. Now. By this point in the year, 0:22:24.200 --> 0:22:28.080 the world in general was gearing up for economic uncertainty 0:22:28.200 --> 0:22:32.080 like that. There had been talk about this since the spring, right. 0:22:32.200 --> 0:22:35.840 There have been various people in finance and business who 0:22:35.840 --> 0:22:40.879 were starting to recognize troubling signs ahead. And whether you 0:22:40.920 --> 0:22:42.879 wanted to call it a recession or not is up 0:22:42.920 --> 0:22:45.359 to you. At this point, I don't even understand what 0:22:45.480 --> 0:22:49.520 the qualifications are to call something a recession. But by 0:22:49.560 --> 0:22:52.240 the middle of spring and then into the summer, it 0:22:52.320 --> 0:22:55.040 was more and more obvious that economic belts were going 0:22:55.080 --> 0:22:57.280 to have to start tightening, and it would be no 0:22:57.440 --> 0:23:01.719 different for tech companies in general and Meta in particular. 0:23:02.960 --> 0:23:06.440 In the summer, The Verge published a piece that cited 0:23:06.520 --> 0:23:11.760 a recording of Mark Zuckerberg saying, quote, realistically, there are 0:23:11.800 --> 0:23:14.800 probably a bunch of people at the company who shouldn't 0:23:14.960 --> 0:23:20.560 be here end quote, suggesting that maybe Meta was overstaffed, 0:23:20.600 --> 0:23:23.240 that they had more employees than they had work to do, 0:23:23.640 --> 0:23:27.080 and thus we're being inefficient. Around this time, we were 0:23:27.080 --> 0:23:31.000 starting to hear the about tech companies at least easing 0:23:31.040 --> 0:23:34.439 off the gas pedal. When it comes to staffing. It 0:23:34.440 --> 0:23:37.359 wouldn't be much longer before we started hearing about hiring 0:23:37.480 --> 0:23:41.879 freezes at Meta and at other companies. We started hearing 0:23:41.920 --> 0:23:46.760 about Meta in particular, but other companies to increasing employee 0:23:46.800 --> 0:23:49.440 standards in an effort to kind of downsize and only 0:23:49.560 --> 0:23:53.119 keep the best workers. And then eventually we started hearing 0:23:53.119 --> 0:23:56.560 about layoffs. Now, again, this is not a problem that 0:23:56.640 --> 0:24:00.760 was unique to Meta in two. A lot of companies 0:24:01.040 --> 0:24:04.280 in the tech space and outside of it we're going 0:24:04.600 --> 0:24:08.880 through similar stages. But Meta, being a huge company, had 0:24:09.000 --> 0:24:12.080 a lot of folks on the payroll, and in November, 0:24:13.440 --> 0:24:18.119 Zuckerberg laid out his plan to reduce headcount by which 0:24:18.160 --> 0:24:22.919 translates to more than eleven thousand employees. That is a 0:24:23.000 --> 0:24:27.320 lot of people. Now, one person who left Meta did 0:24:27.359 --> 0:24:30.560 so back in June, and in this case, it wasn't 0:24:30.560 --> 0:24:33.880 that she was laid off, she chose to resign. That 0:24:33.960 --> 0:24:39.600 person was Cheryl Sandberg, the former chief operating Officer or CEOO. 0:24:39.920 --> 0:24:45.280 She had worked at Meta slash Facebook for fourteen years. 0:24:45.320 --> 0:24:50.480 She was instrumental in how the company grew and developed 0:24:50.560 --> 0:24:53.040 over those fourteen years. But according to the rumor mill. 0:24:53.960 --> 0:24:56.280 Things had been taking kind of a bad turn for 0:24:56.400 --> 0:24:58.840 Sandberg over the last couple of years. There were stories 0:24:58.880 --> 0:25:02.760 that she and Mark Zuckerberg were increasingly at odds over 0:25:02.840 --> 0:25:06.720 company strategy and that the teams that she was managing 0:25:07.640 --> 0:25:11.439 we're being shifted around or reduced in size, so she 0:25:11.600 --> 0:25:13.560 was given less and less to do. It kind of 0:25:13.600 --> 0:25:17.560 reminds me actually of what happened to Steve Jobs in 0:25:17.600 --> 0:25:21.760 the eighties when they brought in a new CEO. Steve 0:25:21.840 --> 0:25:25.080 Jobs was kind of moved off to the side of Apple, 0:25:25.600 --> 0:25:29.080 and depending upon which version of the story you hear, 0:25:29.680 --> 0:25:34.359 he either left in protest or was effectively fired. But 0:25:34.440 --> 0:25:38.800 either way, he had already been given the message loud 0:25:38.840 --> 0:25:40.919 and clear that the company didn't want him or the 0:25:40.920 --> 0:25:43.960 new leadership of the company did not want him. Now. 0:25:44.000 --> 0:25:48.280 Sandbird's reputation, as I said, was tightly tied to Facebook's 0:25:48.440 --> 0:25:52.240 enormous growth over the last fourteen years. Like this is 0:25:52.280 --> 0:25:55.240 a company that at at certain points is boasted at 0:25:55.280 --> 0:25:59.560 having over two billion users for just one of its platforms, 0:25:59.760 --> 0:26:03.520 that being Facebook. Her focus on ad revenue, likewise, had 0:26:03.560 --> 0:26:07.160 become a core Facebook feature. But this focus on growth 0:26:07.320 --> 0:26:09.560 was kind of a double edged sword. You know, some 0:26:09.600 --> 0:26:12.600 people saw it as a huge positive because for a 0:26:12.720 --> 0:26:15.720 long time it was netting investors lots and lots of 0:26:15.760 --> 0:26:19.520 returns on their investment, at least until things started to 0:26:19.560 --> 0:26:24.520 turn against the company. But others saw her as valuing 0:26:24.600 --> 0:26:28.560 growth over everything else and that this in turn would 0:26:28.560 --> 0:26:31.320 set up Meta slash Facebook for some of the big 0:26:31.359 --> 0:26:35.639 problems that it faces today regarding issues like content moderation 0:26:36.200 --> 0:26:42.080 and you know, regulatory agencies butting in on Meta's operations. 0:26:42.160 --> 0:26:46.040 So it goes both ways, and Sandberg was leaving the 0:26:46.080 --> 0:26:48.560 company just as the business world was really starting to 0:26:48.600 --> 0:26:51.600 get a bit concerned about where things were headed economically. 0:26:52.480 --> 0:26:55.480