Facebook (now known as Meta) is beginning to see a path to recovery through AI after experiencing its most challenging year, according to internal documents analyzed by the Wall Street Journal and interviews with people familiar with the situation.
The Wall Street Journal reports that due to Facebook’s significant investment in AI tools, the company is now better able to target advertisements and make more accurate predictions with less information. The company’s plans to get around an Apple privacy change that limited Facebook’s ability to collect data about what its users do outside the boundaries of its platforms depend heavily on this and a shift to forms of advertising less reliant on gathering user data from off its platforms.
Mark Zuckerberg (Drew Angerer /Getty)
Despite the difficulties brought on by Apple’s decision and TikTok’s increasing popularity, in addition to the fact that businesses generally cut back on ad spending due to the unstable economy, Facebook’s financial performance last year was severely hampered, and its stock price fell by nearly 25 percent in a single day following its most recent financial report. However, the business is now noticing some advantageous effects from its AI-driven advancements.
With its short-form video product, Reels, Facebook has achieved success in a number of key areas. Internal data reveals that while the company was still having trouble convincing users to watch Reels videos last summer, viewership has increased on Facebook, which continues to be by far the company’s biggest revenue generator. In an internal meeting in October, Facebook CEO Mark Zuckerberg and Chief Marketing Officer and Vice President of Analytics Alex Schultz attributed a 20 percent increase in time spent watching Reels to improvements in Facebook’s algorithms and the computing systems on which they are based.
Reels, the full-screen, short-form videos that are shown to users of Facebook and Instagram based on their interests, have also benefited from the company’s AI tools. The people who upload the videos are typically strangers to the users and have no other connection to them. According to Schultz’s statements, which were taken into consideration by the Journal, Facebook had additional AI-driven enhancements in the works that it hadn’t yet released.
While Schultz acknowledged that Apple’s privacy changes remain painful, he added that thanks to the company’s successful adaptation efforts, they will no longer have an adverse effect on future earnings. During the internal meeting, Schultz said, “Year over year, they are a tailwind to our business because of improvements we’ve made on artificial intelligence.”
Despite a slight rebound, Facebook’s stock still ended 2022 down more than 60 percent, wiping out more than $600 billion in market value. However, so far this year, shares have increased by about 22 percent. Analysts anticipate it to report a further decline in profit and a faster decline in revenue. Even though it offers a more optimistic view of the future, the company might still meet those expectations.
There are still some areas of concern for the company despite the advancements on a few crucial fronts. The documents examined by the Journal imply that, despite an increase in app usage time as of the middle of the previous quarter, content creation and engagement, particularly among young people, had continued to decline. User creation of Instagram’s “stories” posts was running about 10 percent below the company’s expectations, and users on both Facebook and Instagram were posting and commenting less frequently.
Furthermore, even though Facebook has made strides toward the adoption of its Instagram Reels feature, there is little doubt within the company that its platforms no longer have the same cultural influence they once did. The most downloaded mobile app last year was the rival TikTok. Two-thirds of American teenagers now use that short-form video platform, which is owned by the Chinese company ByteDance “Creators universally believe TikTok is the best way to get in front of a younger audience,” an internal presentation noted.”
Read more at the Wall Street Journal here.
Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship. Follow him on Twitter @LucasNolan
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