Meta Platforms (f.k.a. Facebook) is known by most for its Facebook, Instagram and WhatsApp apps. However, our recent research into the company has shown us that it operates far more businesses than we had appreciated, and at huge scale. As you may know, its share price is off circa 46% from its all-time high reflecting, in the main, a 36% fall in the share price following its most recent earnings update in early February which revealed multiple headwinds for the group.
To be clear, this piece does not constitute investment advice, and our view on Meta Platforms as an investment candidate is not yet made up. Instead, we wanted to highlight to readers some of the interesting aspects to Meta’s business which may not be known.
Out of the top five social media companies in the world, it owns four, being Facebook, WhatsApp, Instagram, and Messenger. There are 2.8 billion daily users of these apps, and 3.6 billion monthly users. Of course, this comes with some overlap but if we look at the users of just Facebook and Messenger it gives some more clarity: there are 1.9 billion daily users of Facebook and Messenger, and 2.9 billion monthly users. The world’s population is around 7.9 billion, so 37 out of every 100 people use at least one Meta product. Furthermore, there are an estimated 3.5 billion active Internet users in the world (ex-China), meaning that 83% of them use at least one of Meta’s apps.
Facebook Marketplace, a peer-to-peer marketplace launched in 2016, has 1 billion monthly users which makes it the second-largest peer-to-peer marketplace in the world, behind only Amazon. Marketplace was born out of Facebook groups when Facebook found out that a significant amount of commerce took place within these groups, and that a surprising number of groups existed solely to facilitate the buying and selling of goods and services.
Facebook Watch allows users to watch both live content and television shows. Facebook even has its own library of “Facebook Originals” – shows that it has developed in-house, similar to Netflix. There are to be approximately 45-50 “Facebook Original” TV series available to stream, ranging from dramas to documentaries. Many of these star well-known celebrities such as Will Smith, Catherine Zeta-Jones, Bear Grylls, and Shaquille O’Neal. Facebook Watch now has an estimated 1.25 billion monthly visitors – amazing when we consider that Netflix has 222 million subscribers!
Of course, a key focus recently has been Zuckerberg’s commitment to developing the metaverse – believing that the future of social media will move from mobile to the metaverse with Meta having the prominent platforms when that happens. Meta has committed to spending a mind-boggling minimum of $10 billion annually over the next five years. VR headsets will be important to making the metaverse possible and Meta’s Oculus headsets command 75% of the headset market and sold 8 million units in 2021.
Overall, Meta Platforms is an interesting and highly successful business, but the path ahead is fraught with challenges. We are likely to pick up coverage of the company for subscribers to our website and a full research note will be available in the members area of our website in the coming weeks.