The phrase “Big Tech” commonly refers to Amazon, Apple, Google, Microsoft, and the artist formerly known as Facebook (Meta).
The moniker may have to change: Meta had its biggest one-day drop ever, falling 20%+ and losing $200B+ of market value.
What happened?
The sell-off came after Meta’s latest earnings report, per CNBC:
- Slowing sales: Meta revenue hit $33.7B in the last quarter but its guidance for Q1 2022 ($27-$29B) was below expectations
- The Apple effect: New changes to iPhone’s privacy policy will cost Facebook’s ad business an estimated $10B this year
Meanwhile, Facebook’s daily users — 1.93B — declined from the previous period with attention moving to other platforms, namely TikTok.
Can Meta come back?
Nikita Bier — a former Facebook exec whose startup was acquired by the social network — highlights the challenges in a viral Twitter post:
- High-value users (e.g., US coastal) are leaving Facebook and going to TikTok
- M&A options are off the table due to antitrust scrutiny
- Founders are choosing not to work at Meta, which means it can’t build new products
Further, Meta’s big bet on the metaverse…
… will take 10 years to play out
Bier does say that Zuck is the “greatest operator” in the world. He’s also the only founder left running a Big Tech firm, putting him in the driver’s seat — with full control — to pivot the company.
In the meantime, though, Meta (worth ~$670B) may have to be downgraded from “Big Tech.” Why? All the other firms are worth at least $1.4T.
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