You won't believe how the ads on Instagram and in Facebook They changed the game for Meta.
In this article, we'll explore how the company saw its revenues jump to more than $39 billion this quarter, increasing its profits to almost 1TP4Q13.5 billion.
And all this, despite enormous investments in artificial intelligence. Let's find out what's behind this success and the impact of Meta's recent bets on the world of augmented reality It is virtual. Come with us!
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- Ad sales on Instagram and Facebook increased sharply, increasing Meta's profits.
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- Revenue grew by 22% in the second quarter, reaching over $39 billion.
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- Profits rose to almost 1TP4Q13.5 billion despite investments in AI.
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- Meta agreed to pay $1.4 billion settlement to Texas over data privacy concerns.
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- AI spending is expected to remain high until 2025.
Goal: Profit Growth Driven by Ads on Instagram and Facebook
Significant Increase in Revenue
Have you ever wondered how gigantic companies like Meta manage to increase their profits so quickly? This quarter, Meta, the parent company of Instagram It is Facebook, saw its revenues rise to more than 1TP4Q39 billion (£30 billion).
This represents an increase of 22% compared to the same period last year. This growth was mainly driven by the increase in advertising prices and the greater reach of these advertisements.
High Profits Despite Investments in AI
Even with massive investments in Artificial Intelligence (AI), Meta managed to increase its profits to almost 1TP4Q13.5 billion.
This shows that, even with high expenses, the company manages to maintain an impressive profit margin.
Agreements and Settlements
Recently, Meta agreed to pay a settlement of $1.4 billion to the US state of Texas. The allegation was that the company collected users' facial data without proper consent.
This type of deal may seem like a setback, but Meta continues to grow and expand its operations.
Meta and the AI Revolution
Meta founder and CEO Mark Zuckerberg said the company had a “strong” quarter and that the AI system is on track to become the most used AI assistant in the world by the end of the year.
Meta has invested heavily in AI, as well as augmented and virtual reality products, such as headsets that allow users to “immerse themselves” in their favorite games or exercise classes.
Challenges and Losses
Despite high profits, Meta's Reality Labs unit, responsible for developing augmented and virtual reality products, made a loss of 1TP4Q4.5 billion. This was more than analysts expected, but the company remains optimistic about the future of these products.
Competition in the World of AI
Mark Zuckerberg and other technology executives from companies like Google, Microsoft and OpenAI are in a battle to create powerful AI tools.
Meta expects to spend up to 1TP4Q40 billion this year on developing AI products, and expects spending to remain high in 2025.
Carefully Introducing Reels Ads
Careful placement of advertisements in Reels (short video sharing service) by Meta led to a significant increase in impressions and ad prices.
Reels was created to compete with TikTok, which faces a possible ban in the US under a new law.
Market analysis
Market analysts such as eMarketer's Max Willens suggest that investors who had concerns about Meta's spending on AI and the metaverse will likely be reassured by this quarter's results.
Another analyst, Mike Prolux, said Meta is well positioned to deliver AI tools. He highlighted that while the company can “brag” about its AI assistant becoming the most used in the world, Instagram, Messenger and WhatsApp users are practically forced to use it as it provides the search bar. in these applications.
Cost Reduction and Layoffs
Although Meta is investing heavily in AI and the metaverse, the company has sought to reduce costs in other areas, resulting in the layoff of thousands of employees.
Meta's global workforce currently stands at 70,799, down from a peak of more than 87,000 employees in 2022.
Future Expectations
In a call after the earnings update, Meta Chief Financial Officer Susan Li mentioned that by the end of 2024, the number of employees will be “significantly higher” compared to the previous year. This suggests that despite recent layoffs, Meta plans to expand its workforce again in the future.
Relevant Internal Links
For those interested in learning more about increasing engagement on social media, you can explore techniques for increase YouTube views.
If you're curious about innovations in AI, check out the companies that are innovating in education with AI.
Plus, if you want to create high-quality video content, the CapCut is an excellent tool to edit your videos.
Common questions
How did Instagram and Facebook ads boost Meta’s profits?
Ad revenue rose to over 1TP4Q39 billion in the last three months. Meta charged more for ads and reached more people, increasing profits.
What were Meta's main investments in the last quarter?
Meta has invested heavily in artificial intelligence (AI) and augmented reality (AR) and virtual (VR) products, such as gaming and exercise headsets.
Has Meta faced any recent penalties?
Yes, Meta has agreed to pay $1.4 billion to the state of Texas over allegations of collecting facial data without proper consent.
What did Mark Zuckerberg say about Meta's AI?
Mark Zuckerberg stated that Meta's AI is “on track to be the most used AI assistant in the world by the end of the year.”
What is the impact of ads on Reels on Meta?
Carefully introducing ads on Reels led to increased impressions and ad prices, improving the bottom line.
