Big Tech is now divided between companies that have big data and those that don’t after Facebook reported dismal quarterly results and blamed Apple’s privacy safeguards for adversely affecting advertisers.
Just recently, Alphabet Inc posted a robust quarter, driven in large part by strong advertising revenue that uses Google’s search data to target ads.
“It’s two-tiered,” said Gene Munster of the investment firm Loup Ventures, who called Apple’s devices and Google’s search service foundations of the internet. “Facebook continues to see the impact of what it means to be built on top of Apple,” he said, highlighting Apple’s privacy changes have impacted Facebook more than expected.
The worse than expected slump in Meta shares wiped out a market value of $200 billion, and rivals Twitter Inc, Snap Inc and Pinterest Inc posted losses amounting to $15 billion.
Apple allowed users to block the tracking of their internet use, making it harder for brands to target their ads on Facebook and Instagram, which are also under the Meta umbrella. Meta CFO David Wehner said the impact of the changes to Apple’s privacy policy could be “in the order of $10 billion” for 2022.
Meta CFO Wehner claimed that Apple’s relationship with Google is also an issue for Facebook. “Given that Apple continues to take billions of dollars a year from Google Search ads, the incentive clearly exists for this policy discrepancy to continue.”
Meta’s results came after two weeks of rosy outlook from Google, Apple, Microsoft and Advanced Micro Devices Inc, which solidified investor confidence in the industry’s growth prospects.
For more information, read the original story in Reuters.