February 3, 2022
Image: Roman Martyniuk/Unsplash
Good morning! Facebook is shrinking for the first time, and the news sent its stock prices tumbling after hours. It wasn’t the only stock that cratered yesterday, either.
Also, we want to know: What’s your favorite online game? More info at the bottom of this email, but tell us what you love to play, and we’ll share the best answers in our weekend newsletter.
I’m David Pierce, and I have recently become hopelessly obsessed with Hippeas chickpea puffs. But please send me all your snack recommendations anyway.
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 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."
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:
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.
The concept of flex work isn’t new, but its widespread adoption is. Flex work helps all of us find some semblance of control in the middle of an uncontrollable pandemic. Giving options makes people happier and less stressed. This leads to a greater desire to participate, which helps us build our communities and culture.
Mixpanel’s Matthew Van Winkle said everyone’s bowing to workers to keep them around:
Want to know what Web3 looks like? Just wait, Tim O'Reilly said:
The folk rock group Crosby, Stills & Nash is joining Neil Young in leaving Spotify:
Canva bought Flourish, a startup in London that helps people tell stories with data. The purchase comes as Canva looks to double the size of its workforce in Europe.
Calm is buying Ripple Health Group, which will work on Calm Health when the deal closes. Ripple’s David Ko will serve as co-CEO alongside Michael Acton Smith.
Two Ethical AI staffers left Google for DAIR, Timnit Gebru’s new nonprofit research institute. One of the employees, research scientist Alex Hanna, said tech has a “whiteness problem” in a post announcing her departure.
Sean Kim is Kajabi’s new president and chief product officer. Kim was most recently the head of product at TikTok.
Debanjan Saha joined DataRobot as COO. Saha last served as VP and GM of data analytics at Google.
Sam Fahmy is Ripcord’s new CEO. Fahmy was previously the chief revenue and marketing officer at WorkFusion.
The system behind those annoying consent banners is a rule-breaker, European regulators decided. IAB Europe, which created the framework, was sanctioned more than $280,000 and given a couple months to come up with a new plan.
Tesla drivers are complaining about “phantom braking,” or instances when their cars make erratic, jolting stops because they confuse trash on the road or nearby trucks as hazards. More than 100 drivers filed complaints over the past three months.
Hackers took more than $320 million in cryptocurrency by breaking into Wormhole, a communications bridge that links different blockchains. Wormhole said it would restore the ethereum to the network.
SpaceX has a faster version of Starlink. The new Starlink Premium service runs at five times the cost of the original service and is advertised for small offices, storefronts and “super users.”
Jeff Bezos' new yacht is causing a ruckus. The 417-foot ship is apparently so large the company building it can't deliver it to him, so Bezos is paying to have a section of a Rotterdam bridge temporarily removed. Locals are not thrilled.
Two Amazon warehouses in Staten Island want to unionize. It’s the second serious union effort at the company.
Melinda French Gates plans to spread out her donations, sources told The Wall Street Journal. She and Bill Gates had initially pledged about a decade ago to give most of their wealth to the Gates Foundation.
The International Space Station will call it quits in 2031. At that point, NASA will crash it into a remote part of the ocean called Point Nemo, which has served as a graveyard for other spacecraft.
Everyone and their mother (literally) is rightfully addicted to Wordle. But in a pre-Wordle world, what did you play?
We want to know your favorite online games. Are you obsessed with crosswords? Have you already ditched the original Wordle for a Taylor Swift version of the game? Do you look forward to weekly quizzes, like Slate’s questions or CNN's 5 Things? Reply to this email and tell us your favorites, and we’ll round up the best ones in the Sunday edition of Source Code. The simpler and weirder, the better.
Thoughts, questions, tips? Send them to firstname.lastname@example.org, or our tips line, email@example.com. Enjoy your day, see you tomorrow.