TikTok takes over
Mark Zuckerberg confirmed what everyone knows to be true: TikTok is a force to be reckoned with. As Meta’s stock tumbled after the company reported its first drop in Facebook user numbers, Zuckerberg stressed the importance of short-form video. So expect to see even more attention on Reels, Meta’s short-form video feature, as it appears to be taking on TikTok. Meta isn’t the only platform feeling pressure from the short-form video giant, either. Sundar Pichai said that YouTube continues to focus on shortshis own TikTok clone.
The key to creating the best short video platform seems to come down to how companies can treat creators: YouTube has highlighted all the ways creators can make money on its platform at late last month, and Instagram recently started testing creator subscriptions.
Meta said Apple’s ad tracking change, which requires apps to ask users if they want to be tracked, will cause a $10 billion drop in sales This year. That admission has been a long time coming: the company said in October that Apple’s ad tracking rule was bound to hurt business. “Facebook ad product – thanks to Apple iOS changes – no longer cuts the mustard,” noted Alexis Ohanian.
Snap also expressed concerns about Apple’s move a few months ago, but CFO Derek Anderson said the company bounced back change “faster than expected”. Snap remains cautious, however, adding that it will take a few more quarters before its advertising partners fully support its new measurement solutions.
Pinterest had also been concerned about Apple’s change, but its retail advertisers helped to compensate this concern.
What shortage of chips?
The chip shortage has not gone away, but chip companies have come out strong this quarter. Qualcomm well done this quarter, according to the tastes of Samsung and Apple, which said the chip crisis mainly affected its older models. Intel itself job the best quarterly and annual turnover in its history.
Not everyone is so optimistic about the shortage: Tesla has said it won’t release any new models this year, partly because of the bottleneck.
Compete in the Cloud
AWS maintains its lead in the cloud computing industry, despite long-held predictions that Google and Microsoft will eventually overtake it. While Microsoft Azure revenue grew 46% and Google Cloud grew 44% last quarter, AWS revenue grew 40%.
But Satya Nadella thinks Microsoft could take bigger steps in the next quarter. He’s been saying since the fall that cloud infrastructure can fight inflation, and although Azure’s growth slowed 50% and 51% in the previous two quarters, the company is still broadcasting an optimistic outlook. Microsoft has indicated that its cloud business will continue to accelerate in the next quarter, and given that it has an edge over Amazon in enterprise software, the company is likely hoping committed Office 365 users will turn to the will all of their business technologies in one place.
Amazon continues to feel the labor shortage
Amazon is still facing a labor shortage. The issue is impacting Amazon Prime, which will see a $20 increase in its annual membership due in part to the rising cost of workers. Andy Jassy said labor shortages continued due to a rise in COVID-19 cases, but a rise in wages and transportation costs hadn’t helped either.
Amazon Prime’s price hike follows a stressful holiday period for the company. Amazon spent billions to offset labor costs, freight costs and supply chain issues ahead of the holiday season, while Apple said it lost billions due to similar issues. Apple also hasn’t fully overcome labor shortages and high shipping costs, but said it expects those issues to let down by March.
Tesla is in its own world
Of course, Amazon could also be in competition with Tesla in the race for the first efficient electric truck. But Elon Musk did not seem to notice.
Chip shortage prevents Tesla from finally delivering its Cybertruck, which Musk claims was originally production by 2021. But he missed this self-set deadline and again delays expectations by at least a year.
Instead, Musk wants all eyes to be on a flashy new humanoid robot Tesla will release… at some point, possibly this year. (As we learned, Musk isn’t very good at deadlines.) It was given the codename “Optimus,” and Musk said it was the “biggest product development” on which Tesla was working – despite the fact that he warned of a AI apocalypse only a few years ago.
Tech companies are always trying to figure out how to moderate content.
“It’s important to me that we don’t take the position of being a content censor.”
Sound familiar? This was the CEO of Spotify explaining to investors his management of the Joe Rogan Experience podcast in a blog post last week, before the company’s earnings call. But it’s awfully similar to how Mark Zuckerberg describes his thoughts on content moderation, again and again.
Will the platforms ever learn? Probably not until revenues force their hand. And although Spotify shares have fallen around 20% following the Joe Rogan controversy, the company is hoping that will blow up, much like Netflix’s controversial decision to stick with Dave Chappelle. “Usually when we’ve had controversies in the past, those are measured in months, not days. But I feel good about where we are on that,” Ek said at the top of the company’s earnings call.
Some industry giants are losing momentum for the first time.
FAANG – the initials of five tech stocks that seemed perpetually linked to the moon.
While Apple, Amazon and Alphabet continue to look unstoppable, last week’s earnings calls shook off that doom for Meta and Netflix. Daily Facebook users dipped for the first time ever, while Netflix membership growth slowed and Netflix predicted even gloomier news in the next quarter.
But make no mistake: giants stay giants. Facebook has nearly 2 billion daily users, despite a more pronounced slowdown in the United States. Netflix added 8.3 million new subscribers last quarter. But stock prices still took a hit, each fall about 20% after earnings. So while it may not be the end of the road yet, the ceiling may be in sight.