This year just isn’t Facebook’s year. On Wednesday (July 26), amid the ashes left from the Cambridge Analytica privacy scandal, the social media giant woke up $120 billion lighter.
“Investors reacted with shock after Facebook delivered lower-than-expected earnings, growth metrics, and financial forecasts,” Variety reports. “However, the resulting stock sell-off, which resulted in the evaporation of $120 billion of the company’s market capitalization, can’t just be explained with Facebook missing Wall Street’s revenue estimates. Instead, investors are waking up to a key realization that Facebook executives have been frank about for some time: The ways consumers interact with social media are changing, and as Facebook is adapting, its profit margins are bound to get smaller.”
As Variety notes, Facebook’s growth is slowing down, but that doesn’t mean it’ll be cashing out completely any time soon.
“Facebook is still poised to make billions every quarter for the foreseeable future,” they pointed out. “But as the company embraces a changing online media landscape, investors may have to cope with the fact that the days of the newsfeed cash machine may not last forever.”
Read more here.
In Other Media News:
- The New York Daily News laid off half of its staff this week.
- Condé Nast is teaming up with NABJ for a discussion on journalism in the Trump era.
- Teenagers on Instagram have turned to “flop” accounts to discuss hot-botton issues.
Media Studies is CASSIUS’ weekly look at news, moves, and mess-ups in the wild world we call “The Industry.” Got a tip? Email Stephanie Long: slong(at)ionedigital(dot)com.