Meta is Still ‘at the Whim of Apple,’ Executive Warns Employees

Facebook and Instagram parent company Meta Platforms appears to be cautiously optimistic about its future after seeing its stock price surge by over 20% in a single day on the back of a stronger-than-expected fourth-quarter earnings report earlier this month.

This was a breath of fresh air for Meta after a rocky 2022, which wiped out more than 65% of the company’s market capitalization and forced it to lay off 11,000 employees. However, one top-level Meta executive warned employees in a recent internal memo that the company is not out of the woods just yet and remains “at the whim of Apple” — reports Vox.

“We have to keep our eyes on the horizon and not focus on the reaction of the street and our stock price,” Alex Schultz, Chief Marketing Officer at Meta, wrote in a memo that was posted on an internal employee message board and later obtained by Recode.

“I believe in this company … but we’re still early in this turnaround, not everything will pan out.”

Schultz singled out Apple’s privacy-focused “App Tracking Transparency” system as one of the challenges the company still faces. Introduced in 2021, App Tracking Transparency gives iPhone users the ability to prevent companies like Meta from collecting their data across third-party apps, making it harder for them to target ads at users.

Last year, Meta said the change would cost it about $10 billion USD per year in ad revenue. Meta has previously accused Apple of using its control of the App Store to “undercut” rivals while growing its own ads business.

Schultz further cautioned that while Instagram Reels, Meta’s TikTok competitor, is making more money from ads, its monetization “is still very low.” It is “still smaller than TikTok,” he noted.

As for overall usage across all of its apps, Schultz said Meta is doing better but isn’t where it wants to be. “We are seeing better numbers on young adults and teens in the US but we’re not satisfied, sentiment trends are better for our brands but that doesn’t mean they are good in the US and similar countries and I could go on and on.”

As a company, Meta enjoyed two decades of almost unstoppable growth — until last year, when the company posted its first-ever decline in quarterly revenue in April. Meta’s Reality Labs unit alone lost $13.7 billion last year, with VR pioneer John Carmack leaving the company with a rather scathing farewell in December.

While Meta may be rebounding, it’s too early to call its stock exchange rally a comeback. Check out Schult’s full memo below:

Hey, team, just like when I talked in our Q&A after our stock price dropped precipitously last year there’s been another big street reaction to our earnings call (and the run up to it), this time up. It’s nice to see people thinking we’ve improved our discipline and we’re not as bad they thought. I’ve been in a few groups though where I’ve seen folks get quite excited. So I want to remind you what I said last year. We’re never as bad as they think we are at times like last year’s stock crash but we’re probably never as good as they think at times like this. We’re still early in this turnaround. We still have efficiency we need to find to run this company better in the new reality, we’re still at the whim of Apple, relative Monetization Efficiency has grown on reels but it is still very low, reels have grown a lot but they are still smaller than TikTok, we are seeing better numbers on young adults and teens in the US but we’re not satisfied, sentiment trends are better for our brands but that doesn’t mean they are good in the US and similar countries and I could go on and on. We have to keep our eyes on the horizon and not focus on the reaction of the street and our stock price. I believe in this company, I am really bullish in the long term future, all the things I felt positive about last year, I feel positive about, BUT we’re still early in this turnaround, not everything will pan out, we will have a lot of highs and lows yet and we have to keep a long term focus and level head no matter what the outside noise is, positive or negative.

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