Meta Platforms facts for kids
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Entrance sign at Meta's headquarters complex in Menlo Park, California
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Trade name
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Meta |
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Formerly
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| Founded | January 4, 2004 in Cambridge, Massachusetts, U.S. |
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U.S.
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Area served
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Worldwide |
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Key people
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| Revenue |  US$117.929 billion (2021) |
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Operating income
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US$46.753 billion (2021) |
| US$39.370 billion (2021) |
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| Total assets | US$165.987 billion (2021) |
| Total equity |  US$124.879 billion (2021) |
| Owner | Mark Zuckerberg (controlling shareholder) |
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Number of employees
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83,553 (June 2022) |
| Divisions | Reality Labs |
| Subsidiaries | Novi Financial |
Meta Platforms, Inc., doing business as Meta and formerly named Facebook, Inc., and TheFacebook, Inc., is an American multinational technology conglomerate based in Menlo Park, California. The company owns Facebook, Instagram, and WhatsApp, among other products and services. Meta is one of the world's most valuable companies. It is considered one of the Big Five American information technology companies, alongside Alphabet, Amazon, Apple, and Microsoft.
Meta's products and services include Facebook, Messenger, Facebook Watch, and Meta Portal. It has also acquired Oculus, Giphy, Mapillary, Kustomer, Presize and has a 9.99% stake in Jio Platforms. In 2021, the company generated 97.5% of its revenue from the sale of advertising.
In October 2021, the parent company of Facebook changed its name from Facebook, Inc., to Meta Platforms, Inc., to "reflect its focus on building the metaverse". According to Meta, the "metaverse" refers to the integrated environment that links all of the company's products and services.
Contents
History
Template:Facebook sidebar Facebook filed for an initial public offering (IPO) on January 1, 2012. The preliminary prospectus stated that the company sought to raise $5 billion, had 845 million monthly active users, and a website accruing 2.7 billion likes and comments daily. After the IPO, Zuckerberg would retain a 22% ownership share in Facebook and would own 57% of the voting shares.
Underwriters valued the shares at $38 each, valuing the company at $104 billion, the largest valuation to date for a newly public company. On May 16, one day before the IPO, Facebook announced it would sell 25% more shares than originally planned due to high demand. The IPO raised $16 billion, making it the third-largest in US history (slightly ahead of AT&T Wireless and behind only General Motors and Visa). The stock price left the company with a higher market capitalization than all but a few U.S. corporations—surpassing heavyweights such as Amazon, McDonald's, Disney, and Kraft Foods—and made Zuckerberg's stock worth $19 billion. The New York Times stated that the offering overcame questions about Facebook's difficulties in attracting advertisers to transform the company into a "must-own stock". Jimmy Lee of JPMorgan Chase described it as "the next great blue-chip". Writers at TechCrunch, on the other hand, expressed skepticism, stating, "That's a big multiple to live up to, and Facebook will likely need to add bold new revenue streams to justify the mammoth valuation".
Trading in the stock, which began on May 18, was delayed that day due to technical problems with the Nasdaq exchange. The stock struggled to stay above the IPO price for most of the day, forcing underwriters to buy back shares to support the price. At closing bell, shares were valued at $38.23, only $0.23 above the IPO price and down $3.82 from the opening bell value. The opening was widely described by the financial press as a disappointment. The stock nonetheless set a new record for trading volume of an IPO. On May 25, 2012, the stock ended its first full week of trading at $31.91, a 16.5% decline.
On May 22, 2012, regulators from Wall Street's Financial Industry Regulatory Authority announced that they had begun to investigate whether banks underwriting Facebook had improperly shared information only with select clients rather than the general public. Massachusetts Secretary of State William Galvin subpoenaed Morgan Stanley over the same issue. The allegations sparked "fury" among some investors and led to the immediate filing of several lawsuits, one of them a class action suit claiming more than $2.5 billion in losses due to the IPO. Bloomberg estimated that retail investors may have lost approximately $630 million on Facebook stock since its debut.
Standard & Poor's added Facebook to its S&P 500 index on December 21, 2013.
On May 2, 2014, Zuckerberg announced that the company would be changing its internal motto from "Move fast and break things" to "Move fast with stable infrastructure". The earlier motto had been described as Zuckerberg's "prime directive to his developers and team" in a 2009 interview in Business Insider, in which he also said, "Unless you are breaking stuff, you are not moving fast enough."
In 2018, Oculus lead Jason Rubin sent his 50-page vision document titled The Metaverse to Facebook's leadership. In the document, Rubin acknowledges that Facebook's virtual reality business didn't catch on as expected, despite the hundreds of millions of dollars spent on content for early adopters. He also urged the company to execute fast and go big on the vision, to shut out HTC, Apple, Google and other competitors in the VR space. Regarding other players' participation in the metaverse vision, he wrote: "Let’s build the Metaverse to keep them from being in the VR business in a meaningful way at all."
In May 2019, Facebook founded Libra Networks, reportedly to develop their own stablecoin cryptocurrency. In recent developments it has been reported that Libra is being supported by financial companies like Visa, Mastercard, PayPal and Uber. The consortium of companies is expected to pool in $10 million each to fund the launch of the cryptocurrency coin named Libra. Depending on when it receives approval from the Swiss Financial Market Supervisory authority to operate as a payments service, the Libra Association plans to launch a limited format cryptocurrency in 2021.
Soon after the rebranding of the company, in early February 2022, Meta reported a greater-than-expected decline in profits in the fourth quarter of 2021. The company reported no growth in monthly users, and indicated it expected revenue growth to stall. The company also expected measures taken by Apple, Inc. to protect user privacy to cost it some $10 billion in advertisement revenue, an amount equal to roughly 8% of its revenue for 2021. In meeting with Meta staff the day after earnings were reported, Zuckerberg blamed competition for user attention, particularly from video-based apps like TikTok, for the poor financial performance.
The 27% reduction in the company's share price which occurred in reaction to the news eliminated some $230 billion of value from Meta's market capitalization. Bloomberg referred to the decline as "[...] an epic rout that, in its sheer scale, is unlike anything Wall Street or Silicon Valley has ever seen". Mark Zuckerberg's net worth fell by as much as $31 billion due to the decline. Zuckerberg controls 13% of Meta, and the holding makes up the bulk of his wealth.
According to published reports by Bloomberg News on March 30, 2022, Meta turned over data such as phone numbers, physical addresses, and IP addresses to hackers posing as law enforcement officials using forged documents. The law enforcement requests sometimes included forged signatures of real or fictional officials. When asked about the allegations, a Meta representative said, "We review every data request for legal sufficiency and use advanced systems and processes to validate law enforcement requests and detect abuse."
In June 2022, Sheryl Sandberg, the company's COO of 14 years, announced she would step down from the role in the fall of the same year. Zuckerberg stated that Javier Olivan would replace Sandberg, though in a "more traditional" role.
In July 2022, Meta experienced the first year-on-year revenue decline in its history. Its total revenue slipped by 1% to $28.8bn. Many analysts and journalists accredit the loss to its advertising business, which has been limited by Apple's App Tracking Transparency feature and the number of people who have opted not to be tracked by Meta apps. Zuckerberg also accredited the decline to increasing competition from TikTok.
Mergers and acquisitions
Throughout its existence, Facebook, Inc./Meta has acquired multiple companies (often identified as talent acquisitions).
One of its first major acquisitions was in April 2012, when it acquired Instagram for approximately US$1 billion in cash and stock.
In October 2013, Facebook, Inc. acquired Onavo, an Israeli mobile web analytics company.
In February 2014, Facebook, Inc. announced it would buy mobile messaging company WhatsApp for US$19 billion in cash and stock. Later that year, Facebook bought Oculus VR for $2.3 billion in stock and cash, which released its first consumer virtual reality headset in 2016.
In late November 2019, Facebook, Inc. announced the acquisition of game developer Beat Games, responsible for developing one of the year's most popular VR titles, Beat Saber.
In April 2020, Facebook, Inc. announced a $5.7-billion deal with the Indian multinational conglomerate Reliance Industries to purchase approximately 10 percent of Jio Platforms, Reliance's digital media and services entity.
In May 2020, Facebook, Inc. announced it had acquired Giphy for a reported cash price of $400 million. It will be integrated with the Instagram team. However, in August 2021, UK's Competition and Markets Authority (CMA) stated that Facebook, Inc. might have to sell Giphy, after an investigation found that the deal between the two companies would harm competition in display advertising market. Facebook, Inc. was fined $70 million by CMA for deliberately failing to report all information regarding the acquisition and the ongoing antitrust investigation.
In November 2020, Facebook, Inc. announced that it planned to purchase the customer-service platform and chatbot specialist startup Kustomer to promote companies to use their platform for business. It has been reported that Kustomer valued at slightly over $1 billion. The deal was closed in February 2022 after regulatory approval.
In September 2022, Meta acquired Lofelt, a Berlin-based haptic tech startup.
Lobbying
In 2020, Facebook, Inc. spent $19.7 million on lobbying, hiring 79 lobbyists. In 2019, it had spent $16.7 million on lobbying and had a team of 71 lobbyists, up from $12.6 million and 51 lobbyists in 2018. Facebook was the largest spender of lobbying money among the 5 Big Tech companies in 2020.
Rebranding
Following a period of intense scrutiny and damaging whistleblower leaks, news started to emerge on October 21, 2021, about Facebook's plan to rebrand the company and to change its name. In the Q3 2021 Earnings Call, on October 25, Mark Zuckerberg discussed the ongoing criticism of the company's social services and the way it operates, and pointed to the pivoting efforts to building the metaverse – without mentioning the rebranding and the name change. The metaverse vision and the name change from Facebook, Inc. to Meta Platforms was introduced at Facebook Connect on October 28, 2021. Based on Facebook's PR campaign, the name change reflects the company's shifting long term focus of building the metaverse, a digital extension of the physical world by social media, virtual reality and augmented reality features.
"Meta" had been registered as a trademark in the United States in 2018 (after an initial filing in 2015) for marketing, advertising, and computer services, by a Canadian company that provided big data analysis of scientific literature. This company had been acquired in 2017 by the Chan Zuckerberg Initiative (CZI), a foundation established by Zuckerberg and his wife Priscilla Chan, and became one of their projects. Following the Facebook/Meta rebranding announcement, CZI announced that it had already decided to deprioritize the earlier Meta project, that it would be transferring its rights to the name to Meta Platforms, and that the project would be sunset in 2022.
Structure
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Management
Meta's key management consists of:
- Mark Zuckerberg, chairman and chief executive officer
- Javier Olivan, chief operating officer
- Nick Clegg, president, global affairs
- Andrew Bosworth, chief technology officer
- David Wehner, chief financial officer
- Chris Cox, chief product officer
- Marne Levine, chief business officer
- Jennifer Newstead, chief legal officer
As of December 2020[update], Meta had 58,604 employees, an increase of 30.4% year-over-year.
Board of directors
As of January 2022, Meta's board consisted of the following directors;
- Mark Zuckerberg (chairman, founder and CEO)
- Sheryl Sandberg (executive director and COO)
- Peggy Alford (non-executive director, executive vice president, global sales, PayPal)
- Marc Andreessen (non-executive director, co-founder and general partner, Andreessen Horowitz)
- Drew Houston (non-executive director, chairman and CEO, Dropbox)
- Nancy Killefer (non-executive director, senior partner, McKinsey & Company)
- Robert M. Kimmitt (non-executive director, senior international counsel, WilmerHale)
- Peter Thiel (non-executive director, co-founder and former CEO, PayPal, founder and president, Clarium Capital)
- Tracey Travis (non-executive director, executive vice president, chief financial officer, Estée Lauder Companies)
- Tony Xu (non-executive director, chairman and CEO, DoorDash)
Company governance
Early Facebook investor and former Zuckerberg mentor Roger McNamee described Facebook as having "the most centralized decision-making structure I have ever encountered in a large company." Nathan Schneider, a professor of media studies at the University of Colorado Boulder argued for transforming Facebook into a platform cooperative owned and governed by the users.
Facebook co-founder Chris Hughes has stated that CEO Mark Zuckerberg has too much power, that the company is now a monopoly, and that, as a result, it should be split into multiple smaller companies. In an op-ed in The New York Times, Hughes said he was concerned that Zuckerberg had surrounded himself with a team that did not challenge him, and that it is the U.S. government's job to hold him accountable and curb his "unchecked power." He also said that "Mark's power is unprecedented and un-American." Several U.S. politicians agreed with Hughes. European Union Commissioner for Competition Margrethe Vestager stated that splitting Facebook should be done only as "a remedy of the very last resort", and that it would not solve Facebook's underlying problems.
Revenue
| Year | Revenue | Growth |
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| 2004 | $0.4 | — |
| 2005 | $9 | 2150% |
| 2006 | $48 | 433% |
| 2007 | $153 | 219% |
| 2008 | $280 | 83% |
| 2009 | $775 | 177% |
| 2010 | $2,000 | 158% |
| 2011 | $3,711 | 86% |
| 2012 | $5,089 | 37% |
| 2013 | $7,872 | 55% |
| 2014 | $12,466 | 58% |
| 2015 | $17,928 | 44% |
| 2016 | $27,638 | 54% |
| 2017 | $40,653 | 47% |
| 2018 | $55,838 | 38% |
| 2019 | $70,697 | 27% |
| 2020 | $85,965 | 22% |
| 2021 | $117,929 | 37% |
Facebook ranked No. 34 in the 2020 Fortune 500 list of the largest United States corporations by revenue, with almost $86 billion in revenue. Most comes from advertising. One analysis of 2017 data determined that the company earned US$20.21 per user from advertising.
According to New York, since its rebranding, Meta has reportedly lost $500 billion as a result of new privacy measures put in place by companies such as Apple and Google which prevents Meta from gathering users' data.
Number of advertisers
In February 2015, Facebook announced it had reached two million active advertisers, with most of the gain coming from small businesses. An active advertiser was defined as an entity that had advertised on the Facebook platform in the last 28 days. In March 2016, Facebook announced it had reached three million active advertisers with more than 70% from outside the United States. Prices for advertising follow a variable pricing model based on auctioning ad placements, and potential engagement levels of the advertisement itself. Similar to other online advertising platforms like Google and Twitter, targeting of advertisements is one of the chief merits of digital advertising compared to traditional media. Marketing on Meta is employed through two methods based on the viewing habits, likes and shares, and purchasing data of the audience, namely targeted audiences and "look alike" audiences.
Tax affairs
The US IRS challenged the valuation Facebook used when it transferred IP from the US to Facebook Ireland (now Meta Platforms Ireland) in 2010 (which Facebook Ireland then revalued higher before charging out), as it was building its double Irish tax structure. The case is ongoing and Meta faces a potential fine of $3–5bn.
The US Tax Cuts and Jobs Act of 2017 changed Facebook's global tax calculations. Meta Platforms Ireland is subject to the US GILTI tax of 10.5% on global intangible profits (i.e. Irish profits). On the basis that Meta Platforms Ireland Limited is paying some tax, the effective minimum US tax for Facebook Ireland will be circa 11%. In contrast, Meta Platforms Inc. would incur a special IP tax rate of 13.125% (the FDII rate) if its Irish business relocated to the US. Tax relief in the US (21% vs. Irish at the GILTI rate) and accelerated capital expensing, would make this effective US rate around 12%.
The insignificance of the US/Irish tax difference was demonstrated when Facebook moved 1.5bn non-EU accounts to the US to limit exposure to GDPR.
Facilities
Offices
Users outside of the US and Canada contract with Meta's Irish subsidiary, Meta Platforms Ireland Limited (formerly Facebook Ireland Limited), allowing Meta to avoid US taxes for all users in Europe, Asia, Australia, Africa and South America. Meta is making use of the Double Irish arrangement which allows it to pay 2–3% corporation tax on all international revenue. In 2010, Facebook opened its fourth office, in Hyderabad, India, which houses online advertising and developer support teams and provides support to users and advertisers. In India, Meta is registered as Facebook India Online Services Pvt Ltd. It also has support centers in Chittagong; Dublin; California; Ireland; and Austin, Texas.
Facebook opened its London headquarters in 2017 in Fitzrovia in central London. Facebook opened an office in Cambridge, Massachusetts in 2018. The offices were initially home to the "Connectivity Lab", a group focused on bringing Internet access to those who do not have access to the Internet. In April 2019, Facebook opened its Taiwan headquarters in Taipei.
In March 2022, Meta opened new regional headquarters in Dubai.
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Entrance to Meta's headquarters complex in Menlo Park, California
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Entrance to Facebook's previous headquarters in the Stanford Research Park, Palo Alto, California
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Inside the Facebook headquarters in 2014
Data centers
As of 2019, Facebook operated 16 data centers. It committed to purchase 100% renewable energy and to reduce its greenhouse gas emissions 75% by 2020. Its data center technologies include Fabric Aggregator, a distributed network system that accommodates larger regions and varied traffic patterns.
See also
In Spanish: Meta Platforms para niños
- Big Tech
- Criticism of Facebook
- Facebook–Cambridge Analytica data scandal
- Facebook Files
- Meta AI
- The Social Network
