Business Profile of Meta Inc. (Formerly Facebook)

All you need to know about Meta Inc. in Brief

• Company Name: Meta Inc (Formerly Facebook)
• Industries served: Social media and digital advertising.
• Headquarters: Menlo Park, California, United States.
• Founder: Mark Zuckerbeg
• Founded: February 2004.
• Chairman and CEO: Mark Zuckerberg.
• CFO: David Wehner
• CMO: Alex Schultz
• Markets served: Global markets
• Leading markets:  United States & Canada, India, Indonesia and Brazil.
• Number of employees (Sep 2021): 68,177 
• Global revenues 2020: $86 Billion
• Net Income 2020: $29,146 Million
• Market capitalization: $843 Billion (Jan 2022).
• Research and development expenses 2020: $18.45 Billion.
• Marketing expenses 2020: $11.6 Billion

About Meta Inc:

Facebook, now renamed Meta, is the leading social media company in the world serving  a global user base.

Founded in 20004, Facebook was renamed Meta in 2021 as  a part of the company’s rebranding strategy.

While Facebook has renamed itself, what the change implies in real terms is not yet clear to its global audience.

The company has faced a lot of criticism related to its approach to user privacy in the past and its rebranding strategy has been criticized as an attempt to distract from the heavy criticism the company has faced.

Critics say that until Facebook has proved that it is serious about changing its culture and approach to user privacy, it will remain the same book in a new cover.

The company has seen a lot of ups and downs in its short history and is a leading competitor of Google in social media and digital advertising.

Apart from Facebook, it also owns Instagram and whatsapp.

However, its primary source of revenue is digital advertising from which it generates substantially all of its revenues.

Over the past several years, the number of Facebook’s Monthly Active Users has climbed sharply driven by increased use of internet and social media worldwide by individuals and businesses.

As of September 2021, the number of Facebook’s Monthly active users was 2.91 billion, which was more than one third of the global population.

Its number of daily active users had also climbed to 1.93 Billion by September 2021.

Despite all the criticism related to user privacy and company culture, Facebook has continued to grow.

Its user base and revenues have climbed at an impressive rate over the past several years.

However, it is not just the individual users worldwide, but the number of business users of Facebook has also climbed fast over the past several years.

The number of businesses using Facebook pages, apps and other free tools has climbed to higher than 200 million.

In fiscal 2020, Facebook’s revenues climbed more than 20% compared to the previous year.

Founded by Mark Zuckerberg, Met is headquartered in Menlo Park, California, United States.

The company employed 68,177 people as of September 2021.

Its CFO is David Wehner and CMO is Alex Schultz.

As the tech industry has continued to experience growing rivalry among incumbent firms, Meta also grew its investment in research and development.

The company spent $18.45 billion on research and development in 2020.

While Facebook’s largest user base is located in India, its largest geographical markets based on net revenues generated are the United States and Canada.

In 2020, the company generated $38.4 billion from the US and Canada markets compared to $32.2 billion in 2019.

Business operations and key markets:

Facebook is a global business that offers its services to users around the globe.

While its services are unavailable in some countries like China, which has censored Facebook, it provides its services two more than one third of the global population through several data centers located in three continents.

These data centers play an important role in helping the company offer its services worldwide round the clock.

Overall, there are eighteen data centers that Facebook owns and operates.

14 of its data centers of which four are still under construction are located in the North American region alone.

Three more are located in Europe and one is located in the Asia Pacific region in Singapore, which is also under construction.

Meta makes Facebook’s services available around the world in more than 100 different regions and has offices or data centers located in more than 30 countries.

Like Google and several other tech businesses, Meta has also established its EU headquarters in Dublin, Ireland.

The company has divided its geographical operations into four market regions.

The first market regions are the United States and Canada, which is also its largest market based on net revenues generated.

Europe is its second largest market region, followed closely by Asia Pacific.

The company has classified the rest of its markets in one category as the rest of the world.

Its net revenues from the United states and Canada region in 2020 were $38.4 billion, and that from the European market $20.35 billions.

Asia Pacific followed closely in the heels of the European market with net revenues worth $19.85 billion in 2020.

The company generated $7.34 billion from the rest of the world in 2020.

Products and services:

Meta is mainly a social media company that generates substantially all of its revenues from digital advertising.

Meta’s mission is to give people the power to build community and bring the world closer together.

Meta owns mainly five products and its largest source of revenue is its social media network, Facebook.

Here is a description of the products and services owned and offered by Meta.

Facebook:

Facebook is meta’s social media platform that enables users to connect with family, friends and others and to share and search for information.

It has a monthly active user base of more than 2.9 billion people as of September 2021.

Apart from Facebook newsfeed and stories, Facebook also offers shopping, gaming and advertising services for businesses.

Businesses can also build pages on Facebook that allows them to promote their brands and products before a global customer base.

Meta generates revenues mainly from the advertisements businesses place on Facebook.

Instagram:

Instagram is also a social media channel owned by Meta that the company had acquired back in 2012 for $1 billion.

It is mainly an image and video sharing website with which users can share images and videos with their followers.

Instagram has also achieved a lot of fame in its short history and become one of the favorite marketing channels of social media marketers.

There are a large number of Instagram influencers that businesses reach out to for promotion of their products and services.

According to sources, there are more than 1 billion Monthly active users of Instagram in 2022.

Messenger:

Meta also owns the messenger which is a simple yet powerful messaging tool that Facebook members can use to connect with friends and followers.

Whatsapp:

Another significant acquisition made by meta is Whatsapp, which is both a messaging and calling application, available to users worldwide.

Meta acquired Whatsapp back in 2014 for a staggering amount of $19 billion.

Meta reality labs:

Meta also owns reality labs.

Its augmented reality and virtual reality products help people stay connected anytime and anywhere.

The two main products made by Meta reality labs include Oculus, and Portal.

Oculus Quest  provides cutting-edge virtual reality (VR) hardware, software, and content.

Customer segments and distribution channels:

Facebook serves a vast segment of users throughout the world through its social media, messaging and calling platforms.

Its users are scattered throughout the world.

While the United States and Canada are the largest market of the company in terms of revenues, Facebook has the largest number of users in India.

Its highest number of customers are from the millennial and Gen Z customer segments.

According to Statista, users in the 18 to 34 age group are the largest user segment of Facebook.

Apart from individual users around the world, the company also serves a large number of businesses through its advertising solutions.

The company generates most of its revenues from businesses advertising on Facebook and Instagram social networks. 

The company targets a large group of big and small companies that need to advertise their products before a global audience.

As the number of smartphone users has grown worldwide, mobile advertising trends have grown in recent years leading to companies spending more on mobile advertising.

In the first quarter of 2020, the largest mobile advertiser on Facebook was Disney, which spent $213.64 million.

Facebook also targets a vast group of developers and offers a nice range of tools for building and running applications.

Competitive environment of Meta Inc.

Meta operates in a highly competitive environment.

The technology industry is evolving fast and tech businesses invest a huge sum each year in research and development to develop new technological products and services.

Facebook is a social media platform that generates most of its revenues from advertising services.

The company has to continuously invest in improving its advertising services to generate impressive returns for its clients worldwide.

Meta is facing competition from several sources including other social media channels, leading cloud services providers, online streaming services providers and gaming services.

Currently, the toughest competitor of Facebook is Google.

Compared to Facebook, Google has stronger resources and capabilities.

Its search engine is a leading source of competitive advantage for the brand.

However, Facebook also has a strong competitive advantage as the leading social media platform in the world.

Both Google and Facebook together command the lion’s share in the digital advertising industry.

Google’s YouTube is also a leading competitor of Facebook.

Other competitors of Facebook in digital advertising include large players like Microsoft, Amazon, and Apple.

In the field of social media, the leading competitors of Facebook include Twitter, VK, YouTube, TikTok, snapchat, Linked In and others.

Other entertainment channels like Netflix or gaming services providers like Microsoft, Bandai Namco, and online gaming services providers also compete with Facebook for user base and advertising revenues.

Due to the hypercompetitive business environment in the tech industry, the company has to invest a huge sum in research and development each year to maintain its pace of innovation and growth momentum.

In the recent years, Meta has increased its spending on research and development at a fast rate.

Its research and development expenses for 2020 were $18.45 billion compared to $13.6 Billion in 2019.

The company has maintained an intense focus on research and innovation to maintain its competitive edge and grow business faster.

Financial performance of Meta Inc in 2020: A brief analysis and report.

Meta Inc has experienced sharper growth in recent years, driven by faster growth its user base, increasing smartphone and internet usage around the world.

Its user base has increased sharply to more than 2.91 billion Monthly active users in September 2021.

Its net revenues increased sharply by more than 20% in 2020 compared to 2019.

Meta’s total net revenues in 2020 remained $86 billion compared to $70.7 billion in 2019.

The company’s net income jumped to $29.15 billion compared to $18.5 billion in 2019.

Its largest source of revenues is advertising.

In 2020 advertising accounted for around 98% of the total net revenues of the company.

Meta’s advertising revenues jumped to $84.17 billion in 2020 compared to $69.65 billion in 2019.

Overall, Meta is enjoying faster growth and higher profitability in recent years, which indicates both a surge in popularity of the platform and a strengthening competitive edge.