Lower expectations of tech giants – The Hollywood Reporter

USAZuckerberg’s box arrives with bad news. During a meeting with employees in July, the Meta CEO, who has shifted the focus of the company and investments to the metaverse, told employees to prepare for one of the “recessions”. worst we have seen in recent history” as Reuters reported. Employees who used to use abundant resources will need to work less, and employees who cannot rise to the occasion and prove their worth at the company will be disqualified. It’s a bleak reminder of a forecast year ahead for the tech giants, which are entering another earnings season with falling stock prices and falling advertising.

Snap, Snapchat’s parent company, will be the first of the major social and tech platforms to report earnings, on July 21. The company is expected to miss revenue targets Its SEC filing, according to an SEC filing in May, warned that “the macroeconomic environment has deteriorated more rapidly than anticipated,” resulting in” revenue and EBITDA being adjusted below the lows. within the scope of our Q2 2022 guidance”. Snap CEO Evan Spiegel also noted a change in the “speed” of hiring, indicating a slowdown.

In June, Spotify said it would reduce its hiring growth rate to 25% in response to the ongoing economic downturn. And on July 12, Google joined the fray when Alphabet CEO Sundar Pichai announced a reduction in hiring rates and urged employees to “be more entrepreneurial, work more urgently, more focused and hungrier than we showed on sunny days.”

Even as a few individual companies manage to meet second-quarter revenue expectations, their share prices, at least in Meta’s case, have fallen nearly 50% this year. Private competitors like TikTok, which Insider Intelligence forecasts will surpass both Twitter ($5.58 billion) and Snapchat ($4.86 billion) in ad revenue this year at 11.64 billion USD, is also coming and taking over the market, forcing the tech giants to get more creative.

As a result, some platforms like Snap — with digital ad revenue accounting for just 1.1% of the market share in the US, according to eMarketer — have begun experimenting with subscriptions. In June, the company launched Snapchat+, a $3.99 a month subscription that gives users access to new features — albeit with ads.

While the initial launch may have confused some observers, Snap rolled out a subscriber-only web version of Snapchat on July 18 that allows users to send messages and video calls with others through their computers. Given that Snap is seen as more of a social platform than a work-oriented service, the feature may be compelling enough to appeal to Zoom-tired subscribers looking for a change and bring back. give Snap another way to make money.

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Source: Insider Intelligence, March 2022

A version of this story appeared in the July 20 issue of The Hollywood Reporter. Click here to subscribe.

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