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The clock is TikToking for Facebook as short-form video conquers ...

World

The clock is TikToking for Facebook as short-form video conquers the world

The social media giant’s stock plummets as ad revenue shifts to its more on-trend rival

Tae Kim

Facebook parent Meta Platforms has suffered a string of public challenges in the past year as regulators intensified their scrutiny of the company and Apple rolled out a privacy feature that crimped a key source of user data. But as Meta’s wobbly revenue outlook made clear on Wednesday, the company is facing yet another threat to its business. The social media landscape seems to be rapidly shifting towards short-form video, a space dominated not by Facebook but by TikTok. 

Meta warned in its earnings results that revenue for the current quarter would come in at about $27bn to $29bn, well below the $30.25bn median estimate of analysts. Meta also reported that user numbers for the quarter ended in December had stagnated. The weak showing sent Meta’s shares plunging more than 20% in after-hours trading. 

While investors were braced for signs of slowing user growth, they were taken aback by the extent to which the company expected to lose out on ad dollars as competitors such as TikTok gain ground. Meta’s Instagram platform has its own short-form video feature called Reels, but TikTok, owned by ByteDance, dominates the space for short user-generated videos. Meta is not only losing consumers to TikTok but also seeing lower revenue from ads destined for the shorter format on its own apps...

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