The other shoe has dropped for Facebook - for the first time ever, the company reported a QoQ decline in daily active users. DAU growth has been basically non-existent in North America and Europe in the past several quarters, but Asia-Pacific and Rest of World were still climbing. Now, all growth has ground to a halt.
This graph only includes DAUs for the core Facebook app, not IG or WhatsApp. However, DAUs for the Meta “Family” were also nearly flat, indicating that Meta may be the first consumer social company to saturate the global market.
Is it all downhill from here? Not necessarily. There’s a few ways Meta could re-accelerate user growth:
Re-engage existing users. I’d hazard a guess that most Accelerated readers are no longer Facebook DAUs, and may be opening Instagram less often. But Meta has an opportunity to win these users back, and has tried to do so with new features like Reels. Social apps are driven by user momentum - growth compounds, and losses spiral. It feels unlikely that the core FB app turns this around, but there may be hope for IG or WhatsApp.
Acquire higher-growth products. Whether or not you like Mark Zuckerberg, it’s hard to deny that he’s made some masterful acquisitions that have fueled meaningful growth for Meta over the past decade. IG had just 30M users at the time of acquisition, and has now topped 2B MAUs (literally 6,500%+ growth). Meta could certainly attempt to execute this strategy again, but it may be hamstrung by increased antitrust scrutiny.
Develop new products. Can Meta build the next IG in-house? The company’s New Product Experimentation team has launched a number of new standalone apps since July 2019, but none have taken off. And recent news suggests the group may be pivoting to focus on investing in seed stage social apps in emerging markets. More here (starts halfway down the post) on some of the factors that will influence Meta’s ability to build internally.
Ride a wave of population growth. More people online = more potential Meta users. This happens via (1) global population growth (slowing, will become negative), and (2) rising Internet penetration (also slowing, but still has room to go!). Meta wants to be the place for new Internet users to establish their online profiles, so I wouldn’t be surprised to see the company invest in initiatives to onboard more people to the Internet (as Google has done).
🚘 Cruise opens public rides. Eager to ride in a self-driving car? Cruise, which just raised another $1.35B from SoftBank, is now opening test rides to the public in SF. The company doesn’t yet have the permit needed to charge for the rides, so they’re all free - but the service is limited to 11pm-5am in specific neighborhoods. According to co-founder Kyle Vogt, someone fell asleep in a car on the first day of testing!
📈 Snap makes a profit. This week was an emotional rollercoaster for Snap. The company’s stock saw not only its second worst trading day ever, but also its best day in history - on consecutive days. Why? Social stocks were hammered after Meta reported weak ad revenue due to iOS privacy changes. Then Snap reported its own earnings, surprising investors with its first quarterly profit and strong Q1 guidance.
🚴 Amazon earnings impress. Amazon also reported earnings this week, and casually notched the biggest single-day gain in U.S. stock market history. While the company slightly missed expectations for revenue, it meaningfully beat on EPS and recorded a huge gain on Rivian’s IPO (Amazon owns ~18%). In other news, Amazon is reportedly in the mix to acquire Peloton 👀
💰 Alphabet plans stock split. Alphabet (Google’s parent company) crushed Q4 expectations for both revenue and earnings, with particularly strong growth in cloud services. The company also announced a 20-for-1 stock split - this lowers the price for a single share, making it more affordable for retail investors. It shouldn’t impact Alphabet’s fundamental valuation, but split announcements often lead to a short-term jump in share price (more here).
Wordle was acquired by The New York Times! The word game, built by software engineer Josh Wardle as a gift for his girlfriend, exploded in popularity last month. It now has millions of daily players, many of whom post their results on Twitter.
The acquisition price was in the “low seven figures” - and in a rare moment of solidarity, it seems like most of the Internet is celebrating Wardle’s success.
what i’m following 👀
A history of the wordcel vs. shape rotator meme that’s taking over Twitter.
Web3, NFTs, and the securitization of the Internet.
The debate around Joe Rogan intensified this week, with more artists and podcasters removing their content to protest Spotify hosting Rogan’s podcast. Even Prince Harry and Meghan Markle, who signed a multi-year partnership with Spotify, have now publicly expressed “concerns” about Rogan spreading COVID-related misinformation.
ICYMI: this started last week when Neil Young demanded that his music be removed from Spotify if the platform continued to host Rogan’s podcast. Rogan is now facing criticism around both COVID-related claims and past use of racial slurs.
This “deplatforming” issue isn’t new - companies that host user-generated content constantly get complaints that a given creator shouldn’t be allowed to post. Trump, who was deplatformed by most social apps following the Capitol riot, may be the highest-profile example. However, this issue plays out on a smaller scale almost every day (think Trisha Paytas, Logan Paul, and Alex Jones).
In most cases, platforms respond by attempting to make an objective decision about whether the content violates pre-existing company guidelines. Unsurprisingly, this can quickly get very subjective! It may not be immediately obvious if something qualifies as “hate speech” or “misinformation” - these are judgment calls that are often influenced by someone’s perspective or political views.
The Joe Rogan case is even more complex. Spotify doesn’t just host Rogan’s content, but paid $100M to be the exclusive distributor of his show. To some, this suggests that Spotify is implicitly backing Rogan and his views. To others, it’s simply a smart business decision to build a differentiated catalog - it doesn’t make Spotify responsible for Rogan’s content or give the company license to police it.
For now, Spotify is holding firm. CEO Daniel Ek publicly released the company’s platform rules, and told employees that Spotify already removed certain episodes of Rogan’s podcast (and others!) that violated said rules. However, he noted that it’s not Spotify’s job to censor content or creators that employees personally disagree with. This can be a slippery slope, as Spotify saw when it enacted and later retracted an artist conduct policy that removed R. Kelly from its playlists.
I’m very curious to hear what the Accelerated audience thinks about this - please vote below by clicking on the option you prefer (it’s anonymous!).
What should Spotify do with Joe Rogan’s podcast?
As a side note - if this is a topic you’re interested in, Coinbase CEO Brian Armstrong published his company’s guidelines around account removal and content moderation this week. I really liked his framework, and would recommend checking it out!
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puppy of the week 🐶
Meet Indy, a 1.5-year-old Bernese Mountain Dog who lives in the Netherlands.
He enjoys eating, playing in the mud, and overall just being a happy guy.
Follow him on Instagram @berneseindy!