In an attempt to recover some of its losses following last week’s earnings call, Facebook is looking to pivot into short-form video content.
Feb. 7, 2022
With its stock in freefall since it suffered the biggest ever single-day loss in its history last week, Meta (NASDAQ: FB) needs to make some changes to Facebook and it needs to make them now.
With user numbers declining, Zuckerberg & Co. have decided to go on the offensive, and they’re aiming high.
Hammering the hammer
The meteoric rise of short-form video platform TikTok has shaken up the entire social space. Last year it was the most used website in the world, even surpassing Google in hits. Facebook has also felt the sting of its new Chinese adversary, with TikTok name-dropped multiple times in its latest earnings call as a direct cause behind the platform’s lagging performance.
With TikTok quietly stealing users, this means fewer eyes on Facebook’s all-important advertisements. This leads to less revenue, which in turn leads to less ad spend. Less ad spend leads to less engagement, which eventually leads to advertisers losing interest in the platform.
Talk about a vicious cycle…
Facebook has decided to tackle the problem head-on. The company has already put a tremendous amount of resources into its ‘Reels’ offering on Instagram, effectively a TikTok clone. Now, following a company-wide meeting, Meta seems intent on transforming Facebook into another short-form video hub.
TikTok is flourishing, Snap is now profitable, and Reels has definitely enjoyed some success. Video content is taking over and Facebook is refusing to get left behind. While this shift may be welcomed by investors, it remains to be seen if this renewed focus can salvage some of last week’s losses.
So much of content consumption relies on how it’s presented to you. TikTok’s biggest asset isn’t its platform or its users, it’s its highly guarded algorithm. Unless Facebook can replicate this, all these plans might be for nothing.