Ten years after the IPO, the number one battle for survival

It was May 18, 2012: Facebook’s initial public offering in the US was supposed to be the financial event of the year, but it was a fiasco. At $38 a share, investors find the asking price too high. However, this hiccup did not last long: after a few months, the number of members of the social network open to the public in 2006 exceeded one billion, which restored investor confidence.

Ten years later, Mark Zuckerberg’s group, which was renamed Meta, has changed considerably. The world’s most popular social network has managed to diversify its activities … but it is also serial scandals.

Strategic acquisitions

In addition to its activity, Facebook very quickly proceeded to acquire start-up companies, especially social networks, which are gaining popularity. In 2012, photo-sharing app Instagram was acquired, barely two years after its launch. The deal caused a surprise at its cost: one billion dollars, while the application did not achieve any trading volume.

Two years later, the WhatsApp messaging app was acquired for a modest $22 billion. After these acquisitions, each of these platforms crossed the 2 billion user mark.

→ investigation. Metaverse: Why Big Groups Buy Virtual Real Estate

These acquisitions were not smooth sailing. The capture and use of users’ personal data has been repeatedly mentioned, which is the cornerstone of the Meta Group’s economic model.

In the US, the Federal Trade Commission (FTC), which is responsible for consumer protection, has accused Facebook and other tech giants of abusing their dominant position to buy up start-ups and thus eliminate competition. Although the complaints were dismissed by US courts, the case will shed light on the social network’s strategy.

Such a pattern cannot continue in the current climate. Anti-competitive organizations are getting stronger, in Europe as well as in the United Statesexplains Asma Mahla, digital economist and educator at Sciences Po Paris. If he wants to buy a new social network as in the past, then Meta will face huge hurdles today. The Federal Trade Commission (FTC) has a Democratic majority: it is more likely to oppose such takeoverss. »

controlled vortices

Meta’s announcement in early February of losing more than a million users in the last quarter of 2021 had the effect of an earthquake for the group: its share price lost a quarter of its value in a single day.

→ facts. Stock market: Facebook shares fall 25% at the open of Wall Street

But the specter of decline appears to be receding. The number of daily users started increasing again at the beginning of the year. On a monthly basis, 2.94 billion users connect to the Internet, which is more than a third of the world’s population. In the face of competition, Facebook remains in first place, far ahead of China’s TikTok and its 1 billion monthly users. This is enough to reassure investors, but above all advertisers, the main source of income for the group.

Head to the Metaverse

Trapped in the physical world, Mark Zuckerberg has chosen to retreat to virtual reality by introducing his metaverse, a pharaonic project he seeks to develop, with an annual investment rate of $10 billion.

→ Maintenance. Facebook: “metaverse a new way to get attention”

For Asma Hey, the metaverse is the main focus of the evolution of Facebook’s economic model, but it really does raise several challenges: Our societies must take organizational issues into account even now, otherwise we will end up with the problems caused by these virtual worlds, whether it is about capturing personal data or on a cognitive level: we play on our senses, with augmented reality. »

Despite renewed use of the platform, Meta stock has stagnated around $200 since February, a sign that Mark Zuckerberg has yet to convince investors of the viability of his metaverse.

Leave a Comment