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Confirming suspicions that it has been quietly “losing out against rivals in the war for attention,” Meta last week reported its first-ever drop in users and a major decline in profits, said Hannah Murphy in the Financial Times. Meta, Facebook’s parent company, admitted to a perfect storm of business crises, and “Wall Street reacted in horror”; a sell-off in Meta stock took its market value down by $232 billion in a single day — the biggest one-day decline ever for a single company. Meta chief executive Mark Zuckerberg blamed rival TikTok. But TikTok alone does not come near to explaining the depth of Meta’s troubles. “This was one of the most shocking earnings of my 27-year career,” said Rich Greenfield, a media and tech analyst.

Apple’s privacy changes look like a catastrophic blow, said Kate Conger and Brian Chen in The New York Times. Since Apple let “iPhone users choose whether advertisers could track them” across other apps and websites last year, just 24 percent have granted consent. Blocking advertisers from gathering data on their potential customers across different apps has disrupted a key selling point of Facebook’s targeted advertising. Tough luck, said Megan McArdle in The Washington Post. Whole companies were “built around the clickbait Facebook seemed to want” and then died when Facebook “changed the algorithms to favor something else.” Now the shoe is on the other foot. In 2012, Zuckerberg decided to transform Facebook into a mobile-first company. Problem is, he “shifted away from the open platform of the browser and onto a closed system where Apple set the terms.” When Apple decided to change the deal, there was little recourse.

Facebook was never going to be able to grow forever, said David Pierce in Protocol. “There aren’t enough people in the world.” With 1.9 billion users still logging in every day, “don’t pour one out for the blue app just yet.” Zuckerberg has made it clear he believes Facebook’s “long-term success depends on the metaverse,” said Tae Kim in Bloomberg, “his vision of a virtual world where consumers can play, socialize, and work.” Many investors were willing to accept the huge expenditures — more than $20 billion over the past three years — building out this vision because “they knew the core social media business would continue to pump out billions in ad revenue.” That’s no longer a given.

Meta’s problems could signal “deeper ructions within the tech industry,” said The Economist. Strong results from Apple, Amazon, Google, and Microsoft “may lead some to conclude there is little to worry about,” but look closely. The competition between the big platforms is intensifying “as they search for new vistas such as virtual reality metaverses or autonomous cars.” Streaming “has turned into a bloodbath,” and the cloud business “is unlikely to stay lucrative forever.” The dominant narrative of the 2010s was that these “natural monopolies” would continue to assert “an almost effortless dominance over the economy and investment portfolios.” That story “no longer neatly reflects reality.” 

This article was first published in the latest issue of The Week magazine. If you want to read more like it, you can try six risk-free issues of the magazine here.