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Thursday, Meta had a dark day, seeing its action plunge by 26%. For Alexis Ohanian, co-founder of Reddit, it makes perfect sense. He believes Facebook’s model is outdated.
In addition to co-founding Reddit, Alexis Ohanian runs venture capital firm Seven Seven Six. He was expecting Meta’s crash: the savviest had anticipated.
“All of the savviest marketers in Seven Seven Six’s portfolio have pulled their dollars out of Facebook and branched out into other ad products, because Facebook’s ad product — thanks to changes to iOS from Apple – just isn’t a fit anymore,” he told Bloomberg.
Mr. Ohanian is referring to a decision made by Apple in the spring of 2021 – which we will detail once more this morning. An iPhone privacy update forces apps to get users’ permission before tracking their activity for . A paradigm shift that has a direct impact on platforms that rely heavily on , such as Facebook.
“This model has never been very popular with users”
It should be noted that Meta’s revenue increased by 20% in the fourth quarter, reaching $32.6 billion. This allowed Facebook to exceed $100 billion in annual revenue for the first time.
But, as Meta announced – which warned that Apple’s move might cost it $10 billion in sales this year – that won’t last. Ohanian says smart advertisers have realized the model is outdated: they’ve already started shifting their money to platforms that have opted for a different strategy.
“It also challenges a revenue model such as , which has never been highly valued by most real users and the people who actually create the content,” he pointed out.
“Do justice to the community”
According to him, Web3 should make it possible to reconcile content creators and capital. “We’re going to see the creation of new business models where the actual creators of the content – whether it’s someone taking a selfie, or someone coming up with a clever post, or whatever – have a stake in it,” he explained.
A model that will recover the “attention” of the community, valuing it more. Until now, “the only crude tool we had was , and that didn’t do it justice,” he concludes.
Note that Seven Seven Six recently raised $500 million to invest in crypto startups.
