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Meta Inc. (META), owner of Facebook, the world’s largest social network, provides a digital social media platform enabling billions of users to connect with one another. While Facebook is best known as a site for friends and families to connect, it’s also used by political organizations, small businesses, and large corporations to reach a wide audience. Through its platforms and applications, users can share information, ideas, photos, and videos. In addition to its main social networking site, Meta also offers photo-sharing app Instagram and messaging apps Messenger and WhatsApp. It also offers augmented and virtual reality products. Most of Meta’s revenue is generated by selling advertising to marketers.
Facebook was founded in 2004 by four Harvard University students, one of which is the company’s Chief Executive Officer (CEO), Mark Zuckerberg. The social networking site expanded quickly, rising to one billion users by 2012. In February of that year, Facebook filed for an initial public offering (IPO), which valued the company at $102.4 billion.
Meta’s headquarters are located in Menlo Park, Calif. The company is classified as a member of the communications services sector. It competes with other companies that offer online and communication products and services. Its rivals include Alphabet Inc.’s (GOOGL) Google and YouTube, as well as Apple Inc. (AAPL), and Twitter Inc. (TWTR). Meta generated net income of $39.4 billion on $117.9 billion of revenue in FY 2021.
Key Takeaways
- Meta offers social media products and services to billions of users worldwide, mainly individuals and families. It’s also used by small and large companies, and political organizations.
- Its competitors include Alphabet Inc.’s (GOOGL) Google, Apple Inc. (AAPL), and Twitter Inc. (TWTR).
- Meta earned $39.4 billion in net income on $117.9 billion of revenue in FY 2021.
- In early October, former Meta employee and whistleblower Frances Haugen testified before Congress, alleging that Meta’s Facebook platform is detrimental to the safety of children and democracy.
- On October 28, 2021, Facebook Inc. changed its name to Meta Inc.
Recent Developments
- On March 30, 2022, the Washington Post revealed that Meta hired Republican consulting firm, Targeted Victory, to launch a campaign to create fear around TikTok.
- On Feb. 2, 2022, Meta reported earnings results for Q4 FY 2021 earnings. In a slide presentation of the results, the company indicated that daily active users (DAUs) of Facebook declined slightly compared to the previous quarter. It marked the first time in the company’s history that DAUs have fallen.
- On Feb. 2, 2022, Meta projected in its fourth quarter earnings press release that its revenue for Q1 FY 2022 would be in the range of $27-29 billion. While that represents between 3-11% year-over-year growth, it also represents a decline from fourth quarter revenue of $33.7 billion. The company said that its first quarter results would be impacted by several headwinds, including changes made by Apple to its iOS that force apps to obtain permission from iPhone users before they are allowed to track those users for the purpose of offering targeted advertisements. Many users have since chosen to not be tracked, causing many advertisers to cut spending on advertising on social media platforms like Facebook.
- On Oct. 28, 2021, Facebook announced it was changing its name to Meta, in order to represent its focus on metaverse-related projects.
- On Oct. 5, 2021, former employee and whistleblower Frances Haugen testified for several hours before the U.S. Senate subcommittee on Consumer Protection, Product Safety, and Data Security. Haugen provided extensive documentation about Meta to the subcommittee and alleged that the company was more concerned about profits than the safety and mental health of its users. (See more details in Q&A below).
- On Oct. 4, 2021, Meta filed a motion urging the U.S. District Court for the District of Columbia to dismiss the FTC’s latest, revised antitrust lawsuit. Meta argues that the complaint lacks evidence that the company violated any antitrust laws. The FCC’s original lawsuit, filed late last year, was later thrown out by a judge. (See more details in Q&A below).
What’s Happening with the Facebook (Meta) Antitrust Suits?
On Aug. 19, 2021, the Federal Trade Commission (FTC) filed a new antitrust lawsuit against Meta after its original one filed in December 2020 was thrown out in June 2021. In its revised lawsuit, the FTC alleges that Meta illegally sought to suppress competition by acquiring potential competitors, including messaging platform WhatsApp and photo-sharing app Instagram. The FTC is seeking to force Meta to unwind these acquisitions, and accuses Meta of using its dominance in social media to prevent third-party app developers from accessing its platform. Meta filed a motion on Oct. 4, 2021, to dismiss the agency’s latest lawsuit, arguing that it still lacked evidence of anticompetitive behavior.
What’s Happening with Facebook (Meta) and Newspapers?
On Feb. 24, 2021, the Australian government passed legislation that effectively requires Meta’s Facebook and Alphabet’s Google platforms to pay news publishers for use of their content on the tech giants’ platforms. The law forces the tech companies and news publishers to submit to binding arbitration if they cannot reach a deal on terms of payment.
The Australian court decision is prompting other countries to take similar actions. European news publishers are lobbying the European Union (EU) to pass similar legislation that would require tech giants to pay for their news content at an agreed-on price. News publishers want a clause that forces major tech companies enter into binding arbitration if they fail to agree on terms of payment for content. They want the clause inserted in EU legislation that was introduced in December 2020. Called the Digital Markets Act, the legislation aims to curb the power of giant tech companies.
What’s Happening with the Facebook (Meta) Whistleblower?
Whistleblower Frances Haugen was a Meta employee until May 2021. She has provided a stream of company documents to the U.S. Securities & Exchange Commission (SEC), Wall Street Journal, New York Times, CBS “60 Minutes,” and other organizations to show what she says are deep flaws at the giant social network. That includes not only the Facebook platform, but also Meta’s smaller platforms including Instagram, which is heavily used by teens. In her news interviews and Congressional testimony, Haugen has criticized the company’s focus on “angry, polarizing divisive content” as a way to boost engagement and profits. She says the platform’s flaws are detrimental to the safety of children and democracy.
Haugen joined the company in June 2019 and served on the Civic Integrity team, which focused on the platform’s impact on global elections. She says she left the company earlier this year because she became frustrated with the company’s lack of willingness to accept initiatives that would address the platform’s flaws and improve the safety of the platform’s users.
In spring 2021, Haugen contacted John Tye, the founder of legal nonprofit organization Whistleblower Aid. She asked him about obtaining legal protection and the best course of action for making public thousands of pages of internal Meta documents. Tye agreed to represent her and Haugen filed for legal whistleblower protection with the Securities and Exchange Commission (SEC). Haugen’s identity was revealed for the first time on Oct. 3, 2021 in an interview on 60 Minutes. Two days later she testified extensively before Congress.
Has Meta Ever Split its Stock?
No, it has not.
Does Meta Pay a Dividend?
No, it does not pay a dividend.
How Many Shares of Meta Stock Are There?
Meta has a dual class structure.
As of Apr. 22, 2022, Meta had 2,293,518,778 shares of class A common stock outstanding. The stock represents one vote per share and trades under the ticker “META” on the Nasdaq Global Select Market.
Also as of Apr. 22, 2022, Meta had 412,804,609 shares of class B common stock outstanding. The class B stock represents 10 votes per share and is owned by Zuckerberg, management, and directors. This gives Zuckerberg and his management effective control of the company.
When Was Facebook Founded?
Facebook was founded in 2004. Its four co-founders, Mark Zuckerberg, Eduardo Saverin, Dustin Moskovitz, and Chris Hughes, were students at Harvard University at the time.
Who is Facebook (Meta)’s CEO?
Co-founder Mark Zuckerberg is Meta’s CEO and chairman. He founded Facebook, the precursor to Meta, with three other classmates while a student at Harvard University. He is ranked 15th on the Forbes 400 list of the richest Americans with a net worth of $58.6 billion, as of June 14, 2022.
How Many Users Does Facebook Have?
As of March 31, 2022, Facebook’s monthly active users (MAUs) were 2.94 billion. Meta defines an MAU as a registered and logged-in Facebook user who visited the Facebook platform or used its Messenger application within the past 30 days as of the date of measurement. Meta uses MAUs to gauge the size of its global active user community.