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Recently, under the Forbes list, mark Zuckerberg founder of Facebook is white out under the top 10. It is so surprising for everyone to know about the reasons why Facebook lost so much money.
Everyone is thinking it is due to the dropping user base on Facebook. Yes, it is true. But the actual truth is different. It will be even surprising to know the reasons why Facebook lost money in 2022.
Before understanding the loss of Facebook. It is better to know about the business model of Facebook. In short, how does Facebook make money?
Facebook Business Model
Mark Zuckerberg created an iconic social app called Facebook in 2004. Back then it is one of the most loved apps. Because it made life so connectable. Everyone was stuck to the app.
The main intention of Facebook what’s the correct people socially. So Mark Zuckerberg decided not to run any advertisement on the app. Because it will disturb the User experience. Eventually, the user base will drop.
So for many years, Facebook did not run any kind of ads. It was run by the investor’s funding. However, the business has to make money. So it was time for Facebook to launch advertisements in the app.
Finally, Facebook started running ads on the platform. Here is a treat now at work on Facebook. Facebook is one of the iconic apps also it even tracks user data.
For example, if you are searching to buy sports shoes on Google or any other browsers. Then Facebook will easily detect that you hunting for sports shoes.
So after some while, if you log into Facebook, then you will be pretty surprised, that you will get advertisements related to sports shoes.
So in this way, Facebook started to track users’ data and also help advertisers. For example, Nike is an advertiser, so the company e wants more sales.
From the Facebook algorithm, ads will be targeted to specific users. So it is very easy for Facebook to make money for advertisers.
But Facebook yeah charges some kind of commissions to display ads and also charges a separate fee if there is a sale of a product.
The total market of digital apps market in the world is worth $600 billion. Facebook’s market share is mobile at 25%.
Ultimately, Facebook’s 98% of revenue is dependent on digital ads. As a reader, you will be thinking Reasons Why Facebook lost so much money.
It will be very shocking for you to know that Apple company is the Reasons Why Facebook lost so much money.
Also Read: Tinder startup story
Apple VS Facebook
Everyone gives importance to their privacy. Show Apple iPhone users did not let third-party apps such as Facebook track their data. This is one of the reasons why Facebook lost so much money.
If the users are not ready to let third-party apps track the data. Then Facebook cannot target appropriate customers to the advertisers. Eventually, advertisers will not make much money. As a result, there is a decline in the revenue of Facebook.
Apple Ads business led reasons Why Facebook lost so much money
iPhone is known for privacy and aesthetic User experience. The Apple company gives a lot of importance to its user’s privacy. So this company will never run ads on its platform.
But now apple’s perspective on digital is changing. No sooner and phone users can see ads on their devices. Because Apple company is planning to launch digital ads on the platform.
Before launching its ad, it is very important to know about its competitors. However, Apple knows that Facebook is one of the biggest competitors in digital ads.
No one can beat Facebook in digital ads. Because Facebook has millions of people’s data. And no other apps will get as much data as Facebook gets. So Apple company knew that it is important to kill the competition.
Presently, apple is running ads in the app store and its music app. Collectively it has recorded revenue of $4 billion from digital ads. So it is expected that within 3 years apple can earn $20 billion annually from digital ads.
iPhone users privacy
Till now I for users were very happy about their data security. But now android and iPhone users are similar. The only difference is, android users’ data Vin reach third-party apps. But in the case of iPhone users, their data are tracked by the apple company ecosystem.
However, the user’s data can be at risk whether it is iPhone users or Android users. Show the Rapid digitalization and also increasing demand for ads, attracting companies to make revenue from their uses data.
Apple company became the main reason Why Facebook lost so much money. Even Mark Zuckerberg’s net worth is around $50.9 billion. Facebook founder, Mark Zuckerberg lost 50% of his wealth within a year.
Now Facebook is running ads without cracking iPhone uses data. So Facebook is trying to target customers with ads without appropriate data.
So however Facebook cannot make money from digital ads anymore. Even its Parent company Meta is also in great decline.
In this way, Meta and Apple’s competition killing strategy became one of the reasons why facebook lost so much money.