Facebook daily users fall for first time as competition from TikTok grows

FILE - A man walks past a mural in an office on the Facebook campus in Menlo Park, Calif., June 11, 2014. A once-ambitious but now faltering Facebook-backed digital currency project known as Diem, formerly known as Libra, is dead and its assets sold to bank holding company Silvergate Capital. (AP Photo/Jeff Chiu, File)
Facebook's parent company Meta released its financial results. Credit: AP/Jeff Chiu

The number of people actively using Facebook has fallen for the first time, as boss Mark Zuckerberg acknowledged growing competition from rival social media platforms such as TikTok.

Daily users fell from 1.939 billion in the last three months of 2020 to 1.929 billion people in the same period in 2021, parent company Meta's latest financial results show.

Meta’s shares fell 22.6% to 249.90 US dollars (£183) in after-hours trading after the announcement.

Chief executive Mr Zuckerberg admitted the rise of rival social media platforms, such as TikTok, is having an impact on Facebook.

Mr Zuckerberg said: “People have a lot of choices for how they want to spend their time and apps like TikTok are growing very quickly."

Facebook founder Mark Zuckerberg. Credit: PA

Meta also warned of slowing revenue growth because of competition and a less spending from advertisers.

As younger social media users turn to video-sharing app TikTok, Meta has introduced its own video-sharing service, Instagram Reels.

Meta, which also owns Instagram and Whatsapp, has also faced a number of controversies in recent years.

Expanded privacy features for Apple users, due to changes to the iOS mobile platform, has also hit Facebook’s advertising business.

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Industry analyst Martin Garner, from CCS Insight, said competition from TikTok is a “new dynamic” for the company.

He said: “It (Meta) is grappling with five big issues: Apple’s privacy changes in 2021 are hurting Meta’s ad sales; user growth has slowed sharply; users are shifting their content posting to short-form video; Meta is a long way behind TikTok on short-form video; and – at the same time – Meta is investing billions of dollars in the Metaverse.

“Mark Zuckerberg sought to reassure markets that it has been through big transitions before, knows what it is doing and always comes out stronger. But this did not land well.

“TikTok’s strength as a competitor, and its speed of growth, bring a new dynamic for Meta – real competition in a core product area.”