Ben Thompson’s Stratechery has been one of the most popular newsletters on the world of tech and where it is going. In 2018, when investors were worried about Facebook, he wrote an article explaining why he thought Facebook would be okay. Three years later, Facebook’s stock was up more than 100%.
Fast forward a year, and Facebook’s (now Meta’s) share price is below where it was in 2018. It is down 73% since the start of the year. And Ben Thompson is still bullish.
In this article he unpacks five myths that he believes are leading to a distortion in perceptions of Meta:
- Users are deserting Facebook
- Instagram engagement is plummeting
- TikTok is dominating
- Advertising is dying
- Meta’s spending is a waste
Ultimately, Ben argues that the biggest mistake Meta may have made is the rebrand. It turned attention to the metaverse in a way that the company wasn’t ready for. But in reality, the $10 billion a year Meta is spending on the metaverse is small (relatively speaking for a company as big as Meta). As Ben finishes his article:
“This, though, feels like a rebrand that was too successful: Meta the metaverse company may be a speculative boondoggle, but that doesn’t change the fact that the old Facebook is still a massive business with far more of its indicators pointing up-and-to-the-right than its Myspace-analogizers want to admit.”
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