Investors are staying on the sidelines amid a broad selloff in tech stocks this year. Shares of Facebook parent Meta are down more than 30% this year amid a troubling macro environment and weaker-than-expected results.
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BuzzFeed’s earnings call Tuesday morning pointed to a continuing theme in tech: consumers are moving away from Meta’s Facebook.
“At this point in the quarter, we continue to see audiences spending less time on Facebook,” BuzzFeed CFO Felicia DellaFortuna said in her remarks.
It comes after Meta reported Facebook daily active users were down slightly this past quarter at 1.93 billion, marking its first ever quarterly decline. The decline of about 500,000 could mean that Facebook has saturated its product globally and the ability to add loads of users has peaked.
Meta’s core Facebook app has been pressured to keep up with competitors, including its own Instagram and the fast-growing TikTok, which features short-form video clips. The company has launched its own short-form video feature called Reels in an attempt to keep audiences engaged.
“People have a lot of choices for how they want to spend their time, and apps like TikTok are growing very quickly,” Meta chief Mark Zuckerberg said on the company’s call with investors last month. “And this is why our focus on Reels is so important over the long term.”
“As a result of both competition and the shift to short-form video as well as our focus on serving young adults, over optimizing overall engagement, we’re going to continue to see some pressure on impression growth in the near-term,” Zuckerberg added.
BuzzFeed, which has focused heavily on its commerce segment, said the majority of its audience traffic to its shopping content has come from Facebook. But “the shift in audience time away” from the app has “disproportionately impacted” its commerce revenues, DellaFortuna said. Looking forward to its first quarter, DellaFortuna said she expects that trend to continue.
“We are leveraging our cross-platform distribution network to extend our commerce business to the faster growing platforms, thereby reducing our dependence on any one platform over the next couple of years,” DellaFortuna said.
The digital media company reported net income of $26 million last year on revenue of $398 million, showing revenue growth of 24% from the previous year. It also announced new plans to “accelerate profitability,” including a reduction in force. Shares were up about 2% in morning trading.
Correction: Buzzfeed’s remarks about Facebook were delivered by Buzzfeed CFO Felicia DellaFortuna.