- Meta wants to increase its ad sales.
- The possibility of charging for additional functionality is being looked into by the company.
- Potentially raising billions in new funds for the business.
Even though the market was down on Thursday, shares of Meta Platforms (NASDAQ:META) started the day in the green, rising as much as 2.7%. The stock was up 1.1% at 3:15 p.m. ET.
The stock price changed as news spread that the company intends to implement in-app purchases for its suite of social media applications.
What’s the Reason?
The Verge reports that Meta Platforms is forming a team to investigate “potential paid services.” The article cites an internal memo distributed to the company’s workers, which states that the new product organization’s primary responsibility will be to develop paid add-ons that can be used across Facebook, Instagram, and WhatsApp.
John Hegeman, Meta’s vice president of monetization and the man in charge of the project, said in an interview that while the company’s primary emphasis will remain be expanding its advertising business, it sees room to increase revenue in other ways.
According to Hegeman, “it’s obviously going to be something that will be enticing” if there are opportunities to “generate new value and important income lines and also provide some diversification.”
However, Hegeman did say that the company was not planning to provide a subscription plan that would allow consumers to disable advertisements.
During the second quarter, Meta Platforms had its first-ever fall in revenue year-over-year, a trend reflected in the company’s financial report that was made public before the end of July. The strong dollar and other currency headwinds were to blame for the shortfall, but it was nonetheless indicative of the challenges Meta Platforms faces.
Apple’s new privacy features make ad targeting more difficult, while businesses have reduced their ad spending due to macroeconomic uncertainty.
But with some 2.88 billion individuals using Meta’s social media platforms daily, the company has a large and fruitful field to cultivate. If even a fraction of its current customers decide to pay for the premium features it plans to roll out soon; the company will gain billions.
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