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TikTok looms large in tech earnings from Google, Facebook, Amazon


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The one constant theme in tech earnings season is weakness of the digital ad industry.

The war in Ukraine, rising inflation, Apple’sPrivacy changes and a general pullback in advertising spending are two reasons why. Facebook, Google, AmazonAnd TwitterAll reported this week disappointing revenue figures, as did SnapLast week.

TikTok is another danger that threatens to overwhelm the country.

This app allows you to create short viral videos and has grown in popularity. It was the third largest social network worldwide last year after Meta’s Facebook, Instagram, and Twitter. according to Insider Intelligence.

Advertisers follow the eyeballs.

“Across the industry, short-form video continues to take a greater proportion of time spent,” Atlantic Equities analysts wrote in a note Thursday. TikTok has driven and benefited most from this trend, although there was some concern about Meta’s ability to compete.

TikTok is owned and managed by China’s ByteDance. The company, which is privately-held and is valued at $140billion, is the owner. Insider Intelligence predicts that TikTok’s global user base will exceed 755,000,000 this year. The company also claims its market share for social networking will be close to 20% in the future.

Meta stated Wednesday that Facebook advertising revenue rose only 6.1% during the first quarter. It was the slowest growth since the start of the 10-year-old company’s history. As analysts had expected, total revenue was lower than the forecasts by the company for the second period. This could lead to sales dropping from the year before.

Reels, a Facebook product that is competing with TikTok’s short-form video marketplace, can be found on Facebook. Company told investorsReels make up 20% of Instagram time. Video content makes up half of Facebook time.

“In the last several years, mobile networks have gotten faster and now video is the main way that people experience content online,” said Facebook CFO Dave Wehner on the earnings call.  “Short-form video is the latest iteration of this, and it’s growing very quickly.”

In Alphabet’s annual reportThe company identified ByteDance, along with Meta, Snap, Twitter and Twitter as competitors in social media networks and as an opponent in digital video services where Apple and Amazon are the major players. DisneyAnd NetflixThere are also offerings.

Alphabet’s results for the first quarter this week were below estimates. This was largely because of a huge miss at YouTube which was supposed to grow 25%, but only grew by 14%. Executives saidYouTube Shorts are gaining popularity. They have surpassed 30 billion viewers in quarter one, up fourfold since last year.

Concerns about ‘TikTok’ competition

YouTube is currently testing shorts ad formats, however, in the interim, analysts have slashed their growth projections. Stifle has reduced its YouTube growth rate estimation to 10%, from 13% in the first quarter. Cowen Equity Research cut its projection to 7.5% to 19.7%.

“We think revenue results were largely fine, but not enough to soothe investors’ rising ad recession anxiety, nor growing TikTok competition concerns after YouTube missed again, and by a larger margin than prior,” wrote BMO Capital Markets analysts in a Wednesday note. They recommended buying the stock.

Snap! reported disappointing resultsCEO Evan Spiegel told investors that it was more difficult than he had anticipated, Twitter launched its Thursday update on Thursday. came up shorton the revenue of the first quarter. As the company is in the process to being bought by another entity, it didn’t provide any comment. Elon Musk.

Amazon comes next.

Amazon is not tied as closely to TikTok, unlike other major social media platforms. Advertising is usually done by brands who promote products through Amazon’s dominant online e-commerce site or apps.

Amazon’s fast growing ad business has its challenges. fell well shortAccording to analysts, the market grew 23% over a previous year to $7.88 trillion. StreetAccount estimates that Wall Street would expect $8.17 trillion.

Amazon CEO Andy Jassy released a statement saying that the pandemic and subsequent conflict in Ukraine had brought about unusual growth, and also challenges. He was referring to the overall slowdown.

The earnings call did not mention ads. However, it was more popular elsewhere.

“We’re hearing there’s emerging concern that TikTok is a competitor to YouTube’s mobile position,” Michael Nathanson, an analyst at MoffettNathanson, told Alphabet executives on the company’s call.

“Bears will likely point to weakness at YouTube coincident with rising concern over engagement shift and the monetization ramp at TikTok,” Loop Capital analysts said in a note. 

Loop’s Alan Gould raised the issue with Facebook executives.

“You were quite open about the competitive issues on TikTok, which seems to be impacting the whole industry now,” Gould said on the call. “Any way of quantifying how much you think TikTok is impacting Facebook?”

Wehner praised Facebook’s own product.

“I think it’s clear that short-form video is a massive opportunity for the industry broadly, and we’re very pleased about the offering that we have with Reels and the opportunity for us to compete for share and time in the market,” Wehner said. “Obviously, other competitors are — have strong offerings like TikTok, but we’re pleased with what we’ve got with Reels and the efforts that we’re making to grow that important product.”

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