Problems compound at Meta with the departure of Sheryl Sandberg
Last week, Meta’s Chief Operating Officer, Sheryl Sandberg, announced her departure. Execs leave all the time, but the importance and timing of this one raises eyebrows.
Meta is down 42% in 2022 and is making a massive pivot to the metaverse with billions in planned investments. What could go wrong?
Meet Meta’s ex-number two exec…
Sandberg joined Facebook in 2008 — tasked with handling management, advertising and politics — leaving Zuckerberg to manage product.
She played a significant role in creating Meta’s cash-pumping ad machine and navigated the company through many of its data leaks and political crises.
- But over the years, Sandberg became increasingly distant from both Zuckerberg and the company and attended very few strategy meetings related to the metaverse.
- According to WSJ, she felt burnt out and like she had become the “punching bag for the company’s problems.”
Sandberg said she’s leaving to focus on philanthropic work with her foundation. While one exec leaving isn’t enough to signal a crisis, it’s all the other issues investors should be worried about.
Can one person have such a big impact?
Where would Apple be without Steve Jobs or Amazon without Jeff Bezos? One might feel the same about Meta and Sandberg, but Meta is no longer a startup and has a deep roster of talent.
Her replacement is Javier Olivan — who has been with Meta since 2007 and was instrumental in their international growth. Jefferies Analyst Brent Thill thinks “there will be a massive hole left by her departure” — but that it won’t be a big issue.
The bigger problems can be found in Meta’s declining core business.
- Meta needs its ads business to fund its metaverse ambitions — which could take years to manifest.
- Meta is growing at the slowest rate in 10 years — and your TikTok addiction could be having a real impact.
Investors: What’s your favorite social media app?
Among U.S. teens, social media app usage is seeing a rapid change:
- In 2012 — the favorite apps among teenagers were Facebook (42%), Twitter (27%) and Instagram (12%).
- In 2021 — the favorite apps among teenagers were Snapchat (35%), TikTok (30%) and Instagram (22%).
In 2021, only 2% of teens had Facebook as their favorite social media app. Facebook’s relevance is fading, and Instagram is moving its focus towards Reels — playing catch up with TikTok. Metaverse interest is also waning.
In two days, Facebook will officially start trading under the ticker $META — completing its rebrand — but its transition is nowhere complete.