Meta Prepares Teams For Paid Feature Tests On Facebook, Instagram And Whatsapp

Meta prepares a team for a paid feature test. (photo: page Julyto/voi)

JAKARTA - An internal memo reveals that Meta Platform Inc., is preparing a team to test new paid features for its popular app families, such as Instagram, Facebook and Whatsapp. This comes after they see its advertising business is heavily affected by Apple's ad tracking changes.

The decision comes as the California-based company faces various challenges, mainly as their much-degrading advertising revenues this year.

Facebook in July reported its first annual revenue decline for the second quarter. They announced a 1 percent drop to USD 28.8 billion (IDR 428 trillion). Even the social network said this growth could fall further in the next quarter. Their net profit fell 36 percent compared to the previous quarter, to USD 6.7 billion (IDR 99.7 trillion).

The 'Ask app not to track' new from Apple applied on the iPhone has reportedly cost Meta $10 billion in their ad revenue last year. During its latest earnings announcement, Facebook also projected that third-quarter revenue fell further, to between 26 billion and 28.5 billion US dollars. It even says that the'sustainability of weak advertising demand' will burden sales.

Facebook reported its first quarterly drop in daily users this year and has been trying to convince investors that it can compete with TikTok.

"I think we do see an opportunity to build new types of products, features, and experiences where people will be willing to pay and excited to pay for them," Meta's VP monetization oversees the group, John Hegeman, told The Verge.

Hegeman seems to underestimate paid features being a meaningful part of the business in the near future, but says that 'on the other hand, I think if there's an opportunity to create new value and meaningful revenue path and also provide some diversification, it's definitely going to be something interesting.'

The group, called the New Monetization Experience, will be led by Pratiti Raychoudhury, who was previously the head of Meta research.

Currently, WhatsApp collects certain business accounts for the right to send messages to their customers and Facebook group administrators are allowed to charge for access to multiple content. But most of the billions of people using Facebook, Instagram, and WhatsApp have free access.

In the long term, we see paid features as a more meaningful part of its business, said Hegeman. "In the five-year horizon I think it can really move the needle and make quite significant differences."

Even so, the company is clearly struggling as it faces the challenges of Apple's privacy boosts, increasing competition with TikTok which has always been popular and has been a widespread ad slowdown.

"We appear to have entered a decline in the economy that will have a broad impact on the digital advertising business," Zuckerberg said. "We're slowing down [our] investment rate and pushing some upcoming spending in the next one or two years into a rather longer schedule."

One of those expenses appeared to be staff recruitment and placement, when Zuckerberg said he wanted to let internal leaders choose how they restructure their team.

"I want to give our leaders the ability to decide within their team where to double, where to recharge the friction, and where to restructure the team while minimizing the impact on long-term initiatives," he added.

Zuckerberg continues to to tout the company's plans for the metaverse, despite being criticized online for the avatar he recently shared that looked scary.

Meta also has a new set of augmented reality and virtual reality headsets being developed as part of a billion-dollar expansion plan into the metaverse.

Late last month, angry Zuckerberg warned staff that he would get rid of poor-performing employees with an "aggressive performance review" as the company prepares for a deep economic downturn.

"If I had to bet, I would say that this may be one of the worst declines we've seen in history in recent times," Zuckerberg told workers in a weekly employee question and answer session last Thursday, as Reuters heard.