The CEO of social-media empire Meta Platforms admits he made a big mistake.
Mark Zuckerberg is up front.
The billionaire king of social networks seems to be doing serious self-criticism after what now appears to be one of the most difficult years for Meta Platforms, formerly Facebook.
The year 2022 has been a bloodbath for the social-media giant, which was founded in 2004. The stock is off 61% this year, losing about $560 billion of market value. Meta Platforms’ (META) – Get Meta Platforms Inc. Report current valuation of $353 billion is a bit more than a third of the $1 trillion it reached in September 2021.
The group has also seen the emergence of a formidable competitor, the short-video platform TikTok, which appeals to Gen Z and has become one of the main destinations for advertisers.
TikTok, a subsidiary of the Chinese group ByteDance, is taking market share from Facebook and Instagram, two of Meta’s main platforms. Meta launched Reels, a product similar to TikTok, in response to the competition.
Tiktok Is ‘an Effective Competitor’
Faced with the success of this unexpected rival, Zuckerberg has recognized that his strategy was not the right one. He says he minimized what TikTok was doing in its early days, without realizing that its strategy reflected a change in the habits of social-network users.
“I would say I actually think TikTok — they’ve proven to be a very effective competitor. I think we were somewhat slow to this because it didn’t fit my pattern of a social thing; it felt more like a shorter version of YouTube to me,” Zuckerberg said in an interview with Ben Thompson’s Statechery newsletter.
“Obviously we have a ton of video on our service,” he continued. “I mean more than 50% of it, or I think it’s at least 50, maybe more, percent of the time that people spend on the Facebook app is watching video at this point. So it’s not like we’re against it, but it’s not the thing that we wake up in the morning and are like, ‘This is what we are uniquely here to do.'”
‘I Sort of Missed…’
But then he admits that was a strategic mistake.
“The thing that I think I sort of missed there, though, is there’s a different loop around how people interact with discovered content. So before, the way this worked is you had your list of friends that you followed and you got their content and feed and you commented in line and the interaction was there,” Zuckerberg said.
“Now I think that there’s still some of that, but I think it is by and large shifted to you use your feed to discover content, you find things that are interesting, you send them to your friends in messages and you interact there. So in that world, it is actually somewhat less important who produce the content that you’re finding, you just want the best content.”
The popular success of TikTok stems from its algorithm, which delivers short videos to users based on their search histories and habits, experts say. The content offered to users is not necessarily that of their friends and relatives, as is often the case with Facebook and Instagram feeds.
Zuckerberg is determined, however, to regain leadership, saying that artificial intelligence should help Meta get ahead of the trends on social networks.
“No one is really building the AI recommendation system or the discovery engine, as we call it, across all of these different types of things and blending them together. I think that that’s a huge area where we can create a lot of value,” the CEO told Thompson.
He then detailed his vision:
“You have a few minutes and you want to discover the best content. Sometimes I want to watch specifically videos, but a lot of the times I just want the best stuff.
“So I think having the ability to kind of intermix video, photos, text, all these different things, content from friends, content not from friends, is going to be a really big advantage.”