Is this the beginning of the end of Facebook?

The signs have been out there for a while, but Facebook users have now declined for the first time ever.

Is this the beginning of the end of Facebook?

It's the beginning of the end of Facebook.

Image: Roman Martyniuk/Unsplash

Facebook is dying. The signs have been out there for a while, of course: slowing growth around the world, an increased focus on Instagram and WhatsApp and Messenger and then a hard pivot toward the metaverse, including a whole-ass name change so that Meta's potential might not be brought down by Facebook. But all we saw until now was slow growth, not decline.

Facebook users have now declined for the first time ever, Meta announced on its earnings call yesterday. The numbers are still ludicrous, obviously — 1.929 billion people still log on to the Facebook app every day, and Meta turned nearly $40 billion in profit last year, so don't pour one out for the blue app just yet — but the number is down about a half a million users from the previous three months.

  • Meta's overall product portfolio — which includes WhatsApp and Instagram — was up a hair, to 2.82 billion per day. But it's pretty clear that after nearly two decades of literally unprecedented growth, Facebook's flagship app has plateaued.
  • The largest culprit is almost certainly that there just aren't enough people in the world for Facebook to grow forever. No wonder Mark Zuckerberg is so interested in appealing to youths.

Meta's stock has dropped about 20% since the earnings call. Big price swings have come for Meta before, but this one's particularly problematic: Zuckerberg needs time, money and patience to pull off his metaverse play, and he may not have as much of any of the three as he thought.

Facebook is playing with both hands tied behind its back right now. TikTok is a formidable competitor, but Facebook can't even buy a GIF company without getting antitrust scrutiny. Apple's privacy moves continue to hurt, too: “The accuracy of our ads targeting decreased, which increased the cost of driving outcomes,” Sheryl Sandberg said on the earnings call, and Zuckerberg added that the company has had to rebuild "a lot of our ads infrastructure." Ultimately, CFO Dave Wehner said, that could cost the company about $10 billion in lost revenue — which is about as much as Meta lost on all its metaverse projects last year.

Reels is the bright spot, at least until the metaverse becomes a thing. Zuckerberg underscored how important Reels is to the company as it tries to take on TikTok, and called it "our fastest-growing content format by far."

  • That's the other shift that's becoming clear: While Meta shifts to the metaverse, its social apps are becoming entertainment apps. Adam Mosseri said as much last year, but the change is already upon us.

Meta has been the most interesting company in earnings season so far. The sun rises, Big Tech makes money. But here are a few things we've learned from the other companies reporting:

  • Google's ad business is doing just fine. Some think it's actually benefiting from Apple's privacy push, as advertisers look for a new way to reach and target people. In general, there are few companies better positioned than Alphabet — which is increasingly vertically integrated, controls multiple massive properties and holds vast quantities of first-party data — for the next few years.
  • TikTok is the future of everything. Sundar Pichai said that Shorts is growing fast, even as YouTube's momentum fell short of expectations (partly thanks to TikTok). If you're not in the vertical-video game, you're apparently nowhere.
  • Streaming services may be headed for a slowdown. Netflix's subscriber growth has slowed recently, as has Spotify's. Both may be running up against the same sort of total-addressable-market ceiling Facebook is, and they won't be the only ones.
  • Spotify led its earnings call with the Joe Rogan controversy, in case you're wondering whether Spotify's actually worried about the blowback there.
  • Supply chain problems hurt everyone, but the chip shortage continues to be good to chip companies. Qualcomm had a big quarter, as did AMD, and both predicted even better things to come. And Apple, which definitely counts as a chip company at this point, was optimistic as well.
  • Absolutely everybody is in the creator business now. You can hardly tune in to an earnings call without a CEO talking about how they're building tools for creators, helping creators monetize, giving creators new ways to make content. Why? Because creators bring audiences more reliably and cheaply than any other mechanism. If you're in the content biz, it's as simple as that.

This year, it seems, is going to be a year full of transition. The ad market continues to change; the supply chain should improve eventually; the digital transformations of so many industries continue apace; regulation is coming; the (hopefully, please, seriously) end of the pandemic will bring a sweep of change in everyone's lives. Even the biggest companies won't be immune to the change. But all that money they keep making will surely help.

A version of this story also appeared in today's Source Code newsletter; subscribe here.


Musk’s texts reveal what tech’s most powerful people really want

From Jack Dorsey to Joe Rogan, Musk’s texts are chock-full of überpowerful people, bending a knee to Twitter’s once and (still maybe?) future king.

“Maybe Oprah would be interested in joining the Twitter board if my bid succeeds,” one text reads.

Photo illustration: Patrick Pleul/picture alliance via Getty Images; Protocol

Elon Musk’s text inbox is a rarefied space. It’s a place where tech’s wealthiest casually commit to spending billions of dollars with little more than a thumbs-up emoji and trade tips on how to rewrite the rules for how hundreds of millions of people around the world communicate.

Now, Musk’s ongoing legal battle with Twitter is giving the rest of us a fleeting glimpse into that world. The collection of Musk’s private texts that was made public this week is chock-full of tech power brokers. While the messages are meant to reveal something about Musk’s motivations — and they do — they also say a lot about how things get done and deals get made among some of the most powerful people in the world.

Keep Reading Show less
Issie Lapowsky

Issie Lapowsky ( @issielapowsky) is Protocol's chief correspondent, covering the intersection of technology, politics, and national affairs. She also oversees Protocol's fellowship program. Previously, she was a senior writer at Wired, where she covered the 2016 election and the Facebook beat in its aftermath. Prior to that, Issie worked as a staff writer for Inc. magazine, writing about small business and entrepreneurship. She has also worked as an on-air contributor for CBS News and taught a graduate-level course at New York University's Center for Publishing on how tech giants have affected publishing.

Sponsored Content

Great products are built on strong patents

Experts say robust intellectual property protection is essential to ensure the long-term R&D required to innovate and maintain America's technology leadership.

Every great tech product that you rely on each day, from the smartphone in your pocket to your music streaming service and navigational system in the car, shares one important thing: part of its innovative design is protected by intellectual property (IP) laws.

From 5G to artificial intelligence, IP protection offers a powerful incentive for researchers to create ground-breaking products, and governmental leaders say its protection is an essential part of maintaining US technology leadership. To quote Secretary of Commerce Gina Raimondo: "intellectual property protection is vital for American innovation and entrepreneurship.”

Keep Reading Show less
James Daly
James Daly has a deep knowledge of creating brand voice identity, including understanding various audiences and targeting messaging accordingly. He enjoys commissioning, editing, writing, and business development, particularly in launching new ventures and building passionate audiences. Daly has led teams large and small to multiple awards and quantifiable success through a strategy built on teamwork, passion, fact-checking, intelligence, analytics, and audience growth while meeting budget goals and production deadlines in fast-paced environments. Daly is the Editorial Director of 2030 Media and a contributor at Wired.

Circle’s CEO: This is not the time to ‘go crazy’

Jeremy Allaire is leading the stablecoin powerhouse in a time of heightened regulation.

“It’s a complex environment. So every CEO and every board has to be a little bit cautious, because there’s a lot of uncertainty,” Circle CEO Jeremy Allaire told Protocol at Converge22.

Photo: Circle

Sitting solo on a San Francisco stage, Circle CEO Jeremy Allaire asked tennis superstar Serena Williams what it’s like to face “unrelenting skepticism.”

“What do you do when someone says you can’t do this?” Allaire asked the athlete turned VC, who was beaming into Circle’s Converge22 convention by video.

Keep Reading Show less
Benjamin Pimentel

Benjamin Pimentel ( @benpimentel) covers crypto and fintech from San Francisco. He has reported on many of the biggest tech stories over the past 20 years for the San Francisco Chronicle, Dow Jones MarketWatch and Business Insider, from the dot-com crash, the rise of cloud computing, social networking and AI to the impact of the Great Recession and the COVID crisis on Silicon Valley and beyond. He can be reached at or via Google Voice at (925) 307-9342.


Is Salesforce still a growth company? Investors are skeptical

Salesforce is betting that customer data platform Genie and new Slack features can push the company to $50 billion in revenue by 2026. But investors are skeptical about the company’s ability to deliver.

Photo: Marlena Sloss/Bloomberg via Getty Images

Salesforce has long been enterprise tech’s golden child. The company said everything customers wanted to hear and did everything investors wanted to see: It produced robust, consistent growth from groundbreaking products combined with an aggressive M&A strategy and a cherished culture, all operating under the helm of a bombastic, but respected, CEO and team of well-coiffed executives.

Dreamforce is the embodiment of that success. Every year, alongside frustrating San Francisco residents, the over-the-top celebration serves as a battle cry to the enterprise software industry, reminding everyone that Marc Benioff’s mighty fiefdom is poised to expand even deeper into your corporate IT stack.

Keep Reading Show less
Joe Williams

Joe Williams is a writer-at-large at Protocol. He previously covered enterprise software for Protocol, Bloomberg and Business Insider. Joe can be reached at To share information confidentially, he can also be contacted on a non-work device via Signal (+1-309-265-6120) or


The US and EU are splitting on tech policy. That’s putting the web at risk.

A conversation with Cédric O, the former French minister of state for digital.

“With the difficulty of the U.S. in finding political agreement or political basis to legislate more, we are facing a risk of decoupling in the long term between the EU and the U.S.”

Photo: David Paul Morris/Bloomberg via Getty Images

Cédric O, France’s former minister of state for digital, has been an advocate of Europe’s approach to tech and at the forefront of the continent’s relations with U.S. giants. Protocol caught up with O last week at a conference in New York focusing on social media’s negative effects on society and the possibilities of blockchain-based protocols for alternative networks.

O said watching the U.S. lag in tech policy — even as some states pass their own measures and federal bills gain momentum — has made him worry about the EU and U.S. decoupling. While not as drastic as a disentangling of economic fortunes between the West and China, such a divergence, as O describes it, could still make it functionally impossible for companies to serve users on both sides of the Atlantic with the same product.

Keep Reading Show less
Ben Brody

Ben Brody (@ BenBrodyDC) is a senior reporter at Protocol focusing on how Congress, courts and agencies affect the online world we live in. He formerly covered tech policy and lobbying (including antitrust, Section 230 and privacy) at Bloomberg News, where he previously reported on the influence industry, government ethics and the 2016 presidential election. Before that, Ben covered business news at CNNMoney and AdAge, and all manner of stories in and around New York. He still loves appearing on the New York news radio he grew up with.

Latest Stories