Meta recently released an earnings report. Apparently, their earnings continued to rise even with the link tax nonsense.
It is yet another nail in the Online News Act supporters talking point coffin. One of the major talking points pushed by supporters and the government of this law is that platforms depend entirely on news content. Without news links, the platforms would practically shut down overnight. Sometimes, they sell this by, for instance, using very specific queries such as what stores are closed on the next stat holiday. Most of that information is generally provided by the businesses themselves rather than news organizations, but supporters were desperately trying to find a specific query that showed primarily news links while also seeking general information. It was all smoke and mirrors in the end, though.
With that fake talking point in hand, the news lobbyists basically got high on their own talking point supply and extrapolated from there. Believing in their own BS, they then proceeded to presume that the platforms would never actually drop news links in the first place because aggregating news links is their entire business model. In fact, some argued that if Meta were to follow through with their announcement that news links would be blocked, they wouldn’t even last a week before they start signing deals. This because their revenues and user interactivity would practically tank overnight.
In short, all this talk of dropping news links was all a big fancy bluff to them and they weren’t worried about what would amount to the consequences of their actions. Reality, however, had different plans. For Meta, users interacting with each other was the true big source of their revenues. News links amounted to a very small fraction of their content (and a diminishing aspect at that), so they were actually telling the truth when they said that they would be dropping news links. Further, it didn’t matter if lawmakers believed them or not because they knew they were doing this regardless. The ones getting hurt the most were the very people lobbying for this bill in the first place.
So, it was not at all surprising when Facebook began rolling out news link blocking on August 1st. In the weeks that followed, lobbyists threw everything they had (which wasn’t much) at the situation. They pushed three successive failed boycotts of the platforms. Whether it was advertiser boycotts that almost no one wanted to risk their business future over or user boycotts that almost no one showed interest in, the lobbyists were clearly desperate to exact revenge on the platforms that refused to give them heaps of free money for no real reason. Again, reality eventually bit them in the rear on that as the failed boycotts only led to a total humiliation for the lobbyists.
Reality was also not done yet in this situation. All those assumptions that traffic on Meta platforms would plummet without news links never happened. This as Facebooks traffic remained unchanged. The same couldn’t be said for the media companies as user engagement on the media companies pages collapsed. It pretty much proved the reality that platforms like Facebook depend very little on news content. Whether lawmakers believed Meta or not, Meta’s senate hearing comments on how news links is highly replaceable were proven to be accurate. It was almost as if Meta actually knows what they are doing in this space or something crazy like that.
Of course, the damage caused by the Online News Act was only just beginning there. More recently, newspapers in three separate communities shut down. In one instance, there were comments that Meta pulling news links resulted in traffic to their news site getting chopped in half (they said that it was both Meta and Google doing this, but Google has yet to act in all of this). One thing is for sure, the dominoes have already started to fall for the news sector.
In a development that is eerily similar to Facebooks traffic remaining unchanged while news sites pages seeing the plummeting of user interactivity, it seems that Meta’s earnings are also currently rising. An earnings report was released and it apparently showed that Meta is actually beating earnings expectations:
Facebook parent company Meta Platforms (META) recorded its fastest sales growth in two years and doubled its earnings in the third quarter. But Meta stock fell following earnings, as investors fretted the company’s commentary about an uncertain advertising environment.
In earnings published late Wednesday, Meta said it earned an adjusted $4.39 per share on revenue of $34.1 billion for the quarter ending September 30. Analysts polled by FactSet expected Meta to report adjusted earnings of $3.64 per share from revenue of $33.6 billion.
Meta’s results represent a 168% year-over-year earnings increase and 23% sales increase. The revenue increase is Meta’s fastest year-over-year growth since September 2021 and marks record quarterly sales for the social media giant.
“We had a good quarter for our community and business,” said Mark Zuckerberg, Meta founder and CEO, in the news release. “I’m proud of the work our teams have done to advance AI and mixed reality with the launch of Quest 3, Ray-Ban Meta smart glasses, and our AI studio.”
So, yes, there was some weird elements with the stock value, however, Meta is continuing to not only generate increasing revenue, but also outperform expectations on top of it all.
It looks like a lot of things were a bust for supporters of the Online News Act. For one, the boycotts clearly had no impact whatsoever (it’s why every new announcement of someone joining the boycott had us posting the “Oh No, Anyway” meme). For another, the lack of news links on Meta platforms clearly had no impact on their overall performance. All it did was serve as “Finding Out” for the big publishers afterwards. Whatever headwinds that Meta is facing has nothing to do with anything related to the Online News Act. Further, it is likely that the same sort of situation will play out whenever Google finally decides to pull the trigger themselves – an almost near certainty given the wilful ignorance lobbyists continue to display.
(Hat tip: @FortierMorghan)
Drew Wilson on Twitter: @icecube85 and Facebook.
