Social media giant Facebook has seen its daily active users (DAU) drop for the first time in its 18-year history.
Facebook parent company Meta Networks says DAUs fell to 1.929 billion in the three months to the end of December, compared with 1.93 billion in the previous quarter.
The firm also warned of slowing revenue growth in the face of competition from rivals such as TikTok and YouTube, while advertisers are also cutting costs.
Meta shares plunged more than 20% in after-hours trading in New York.The drop in Meta’s share price wiped around $200bn (£147.5bn) off the company’s market value.Shares in other social media platforms, including Twitter, Snap and Pinterest, also fell sharply in extended trading.
Chief Executive Mark Zuckerberg said the company’s sales growth took a hit as audiences, especially younger users, turned to rivals.
Meta, which owns the world’s second-largest digital advertising platform after Google, also said it was affected by privacy changes in Apple’s operating system.
The changes have made it harder for brands to target and measure their advertising on Facebook and Instagram and could have an impact “on the order of $10 billion” this year, according to Meta CFO Dave Wehner.
Meta’s total revenue, most of which comes from ad sales, rose to $33.67 billion in the period, narrowly beating market predictions.
It also forecast revenue of between $27 billion and $29 billion for the coming quarter, which is lower than analysts had expected.
While the company has been making its own video investments to compete with TikTok, owned by Chinese tech giant ByteDance, it makes less money from those offerings than it does from its traditional Facebook and Instagram feeds.
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Zuckerberg said he was confident investments in video and virtual reality would pay off, as previous bets on mobile advertising and Instagram stories have. But, he noted, the company did not have to contend with a major rival during previous changes in strategy.
The teams are doing pretty well and the product is growing very quickly,” he said. “What’s somewhat unique here is that TikTok is already such a big competitor and also continues to grow at a fairly rapid rate.”
