Internet giants see Covid fortunes reversed as digital ad money dries up - Morning Brew

American heavyweights that were erstwhile considered unstoppable are, for the archetypal clip successful years, looking a small washed up.

We’re not talking astir Tom Brady and Aaron Rodgers. This is astir America’s net giants, which are slumping hard successful this epoch of higher involvement rates, little advertizing budgets, and wide economical uncertainty.

Yesterday, Meta became the latest Big Tech institution to station rough fiscal results for the past quarter. It recorded its 2nd consecutive 4th of declining gross and provided a gloomy outlook for Q4.

Come to deliberation of it, possibly Meta shouldn’t adjacent beryllium considered “Big Tech” anymore. Since its stock terms peaked successful September 2021, the institution mislaid astir two-thirds of its value…before diving different 12% successful after-hours trading yesterday.

What went wrong? Younger radical are fleeing Facebook, and investors aren’t assured CEO Mark Zuckerberg tin reinvent the institution arsenic a metaverse platform. “Meta has drifted into the onshore of excess—too galore people, excessively galore ideas, excessively small urgency,” a salient shareholder wrote this week successful a scathing letter. Meta’s metaverse unit, Reality Labs, has mislaid $9.4 cardinal truthful acold this year.

While Meta whitethorn beryllium the poster kid for Big Tech’s struggles, it’s not the lone institution that needs a checkup.

Big picture: Tech giants scored record profits during Covid, erstwhile involvement rates were adjacent zero, stimmies were flowing, and everyone was stuck wrong with lone the net to entertain themselves. But present that those days are over, we’re going to find retired which companies tin sail without the upwind astatine their back.—NF