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Advertisers now shift to Google for target users more than to Facebook.
Facebook Inc, that is now known as Meta, (NASDAQ: FB) experiences its lowest drop in stock value in the last 18 months, with Google LLC (NASDAQ: GOOGL) holding a fair record and ready to vie with rival companies and Apple Inc (NASDAQ: AAPL) is the cause. The Facebook stock dipped 25% on Thursday, its biggest-ever drop to its lowest since August 2020, while Google reported a hike of 33% in ad revenue.
Despite the fact that the US tech giants conduct business differently, they have shared similar stock features over the past years until late 2021.
Facebook, Google, and Apple Stocks
Facebook, Google, and Apple are all up in extended trading hours. While Facebook stock advanced 1.40%, Google advanced 1.93%, and Apple gained 0.77%. Out of the three companies, Apple is performing the most with only 2.63% loss in its year to date record.
On the other hand, Google has Android (also has control over its privacy policies) for targeting its users. The tech company largely depends on ad marketing to connect marketers with users. However, search advertising is also a unique asset users tend to self-target when typing in a search query that explains their interest. However, they need iOS distribution – a reason to have a relationship with Apple. Apparently, Google pays billions of dollars to Apple on a yearly basis to be the default search engine on Safari.
In an interview with Wall Street Journal, Facebook mentioned that Apple’s new App tracking Transparency (ATT) Feature would expectedly cost the social media company $10 billion revenue this year. This is the reason behind Facebook’s low revenue forecast for the current quarter. At the same time, its projected expense is why FB declined 25% on the 3rd of January.
Advertisers now shift to Google for target users more than to Facebook. It is incited that Apple’s changes will likely harm SMBs that rely on target adverts. Sheryl Sandberg, Facebook’s Operating Chief, said, “So we are definitely seeing that this has more of an impact for SMBs.”
Advertisers Shift to Google for Target Audience
In 2012, Facebook designed a device that was not much of a success. Ever since, the company has been dependent on other companies. In its IPO prospectus in 2012, it stated that :
“We are dependent on the interoperability of Facebook with popular mobile-operating systems that we do not control such as Android and iOS, and any changes in such systems that degrade our products’ functionality or give preferential treatment to competitive products could adversely affect Facebook usage on mobile devices.”
A decade later, advertisers now shift to Google for target users more than to Facebook.
Sheryl Sandberg, Facebook’s Operating Chief, said, “So we are definitely seeing that this has more of an impact for SMBs.” This means that Apple’s changes will likely harm SMBs that rely on target adverts.
The company acquired Oculus: a virtual reality headset company, for $2 billion in 2014. It was Mark Zuckerberg’s plan of securing the future. He envisaged it would enable the company to develop its own hardware and software since Facebook-owned neither the device nor the operating system.
In Thursday’s report, Reality Labs Group, home to virtual reality development, lost more than $10 billion in 2021. That was about an 80% loss over purchase price.
Similarly, Google and Facebook diverged in 2021 when Australian laws required both companies to negotiate with publishers and give incentives for content. Google adhered, but Facebook took the opposite tack and restricted people and publishers from sharing and viewing news links in Australia.