Meta Platforms CEO Mark Zuckerberg speaks at Georgetown University in Washington on Oct. 17, 2019.
Andrew Caballero-Reynolds | AFP | Getty Images
Wall Street’s worst year since 2008 wreaked havoc on tech companies, particularly those reliant on digital advertising.
Facebook parent Meta lost almost two-thirds of its value in 2022 as year-over-year revenue fell in consecutive quarters, leading the company in November to cut 13% of its workforce. Snap’s stock plummeted 81% as growth dipped into the single digits, and the company opted not to provide a forecast for two straight periods. In August, Snap said it was laying off 20% of its employees.
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Following a brutal 2022, investors are starting to return to the online ad sector before a rebound in financial performance that’s expected at some point in 2023. They’re hoping for some signs of a recovery this week as the biggest companies in the space report fourth-quarter results and provide an update on whether brands are starting to spend more on ads after pausing many of their campaigns.
Snap is scheduled to issue results after the close of trading on Tuesday. Meta reports on Wednesday, followed by Google parent Alphabet on Thursday. Also on Thursday, investors will hear from Amazon and Apple, which both have growing digital ad businesses that have been taking market share of late from Google and Facebook.
With concerns of a potential recession still looming large, market analysts anticipate more turmoil ahead for online advertising. A survey of 50 ad buyers published this month by Cowen showed that companies expect their spending in 2023 to rise just 3.3%, which the investment bank said represents “the softest ad growth outlook we’ve seen in five years.” Last year, those companies increased spending by 7.5%.
“Two-thirds of ad buyers factored in a recession as part of their budgeting process, citing inflation and a softening consumer, among other macro factors,” Cowen said.
In addition to the macro challenges, companies that rely on mobile data for ad targeting are still reckoning with upheaval caused by Apple. In 2021, the iPhone maker instituted a new App Tracking Transparency (ATT) feature, which reduced targeting capabilities by limiting advertisers from accessing a smartphone user identifier. Meta said early last year that ATT would reduce revenue by $10 billion for all of 2022.
Meta and Snap over past 12 months
CNBC
In its most recent earnings call in October, as Meta’s stock sank in extended trading, CEO Mark Zuckerberg acknowledged a multitude of headwinds facing the company, including the economy, ATT and competition — and he was left thanking the remaining investors for their patience.
“I think that those who are patient and invest with us will be rewarded,” Zuckerberg said.
So far in 2023, there have been some rewards. Meta and Snap are both up more than 22% as January comes to a close. But revenue growth isn’t expected to pick back up until the second half of the year.
Analysts expect Snap to show fourth-quarter growth of less than 1%, followed by expansion of 1.6% in the current period, according to Refinitv.
‘Little bit of a rebound’
Meta, whose ad business is more than 20 times the size of Snap’s, is expected to report a third straight quarter of declines — and its steepest drop yet — at more than 6%, according to Refinitiv. Revenue is expected to fall another 2.8% in the first quarter, before sub-1% growth returns in the second period.
Since April 2021, when Apple’s ATT update went into effect, Meta has been working on improving its advertising technology and has been utilizing data from other sources. Some retailers, for instance, told CNBC that they’ve been porting their customer data from their Shopify websites into Meta’s platforms, which has helped improve the ability for Meta to target personalized ads to users.
“There’s some signals that maybe Facebook is seeing a little bit of a turnaround in ad spending,” said Debra Williamson, an analyst at research firm Insider Intelligence.
However, TikTok has driven consumers from stagnant updates to short videos, and Facebook has been slow to catch up. Meanwhile, even with Meta’s incremental improvements to its ad system, the impact of Apple’s privacy change was so severe that Facebook and Instagram are nowhere close to making up for it.
“Facebook has had a lot of challenges with coming up with its own tools and metrics to be able to prove the effectiveness of those ads,” Williamson said. “I think it’s getting better at that, so I’m hopeful that we will see maybe a bit of a rebound for Facebook compared to the past couple of quarters.”
Google’s business has been less harmed by Apple’s moves, but it’s still being hit hard by the economic slowdown and by TikTok. Growth at Alphabet is expected to come in below 1% in the fourth quarter of 2022 and slowly build in 2023, not reaching double digits until the last period of the year.
“Among the existing players, TikTok is expected to be the largest share gainer within Digital Video advertising over the next two years,” Cowen analysts wrote. They estimate TikTok will capture 8% of budgets in 2024, up from 6% last year.
Amazon’s ad business has also made major inroads, as e-retailers show their willingness to pay big bucks to promote their brands on the company’s site and across its various services. According to Insider Intelligence, Amazon captured 13% of the digital ad market last year, and in the third quarter its ad business grew by 25% even as overall revenue missed estimates.
Analysts expect Amazon’s ad unit to show growth of 17% in the fourth quarter, well ahead of its peers, and to stick in the mid-teens throughout 2023, according to FactSet.
And then there’s Netflix, which has added advertising as a revenue stream. The company debuted a new ad-supported streaming tier in November that costs $6.99 a month.
“Netflix is expected to climb from 0% of budgets in 2022 to nearly ~4% of Digital Video ad spend by 2024,” the Cowen analysts said.
Still, the biggest uncertainty looming over this year’s online ad market is the shaky economy, said Barton Crockett, an analyst at Rosenblatt Securities. He has a hold rating on Meta, Snap, Amazon and Netflix, but recommends buying Alphabet and Apple, according to FactSet.
If the economy improves, “things that are very economically sensitive, like advertising, will be an attraction for investors across the spectrum,” Crockett said. “That could be great for everyone in this group.”
It’s a giant and risky bet. The U.S. Department of Commerce said last week that consumer spending dropped 0.2% in December, indicating that people are still holding on to their cash.
“In that circumstance, it will be hard for there to be any kind of meaningful expansion of ad spend,” Crockett said.
President Trump’s new tariffs on goods that the U.S. imports from over 100 countries will have an effect on consumers, former Microsoft CEO Steve Ballmer told CNBC on Friday. Investors will feel the pain, too.
Microsoft’s stock dropped almost 6% in the past two days, as the Nasdaq wrapped up its worst week in five years.
“As a Microsoft shareholder, this kind of thing is not good,” Ballmer said, in an interview with Andrew Ross Sorkin that was tied to Microsoft’s 50th anniversary celebration. “It creates opportunity to be a serious, long-term player.”
Ballmer was sandwiched in between Microsoft co-founder Bill Gates and current CEO Satya Nadella for the interview.
“I took just enough economics in college — that tariffs are actually going to bring some turmoil,” said Ballmer, who was succeeded by Nadella in 2014. Gates, Microsoft’s first CEO, convinced Ballmer to join the company in 1980.
Gates, Ballmer and Nadella attended proceedings at Microsoft’s Redmond, Washington, campus on Friday to celebrate its first half-century.
Between the tariffs and weak quarterly revenue guidance announced in January, Microsoft’s stock is on track for its fifth straight month of declines, which would be the worst stretch since 2009. But the company remains a leader in the PC operating system and productivity software markets, and its partnership with startup OpenAI has led to gains in cloud computing.
“I think that disruption is very hard on people, and so the decision to do something for which disruption was inevitable, that needs a lot of popular support, and nobody could game theorize exactly who is going to do what in response,” Ballmer said, regarding the tariffs. “So, I think citizens really like stability a lot. And I hope people — individuals who will feel this, because people are feeling it, not just the stock market, people are going to feel it.”
Ballmer, who owns the Los Angeles Clippers, is among Microsoft’s biggest fans. He said he’s the company’s largest investor. In 2014, shortly after he bought the basketball team for $2 billion, he held over 333 million shares of the stock, according to a regulatory filing.
“I’m not going to probably have 50 more years on the planet,” he said. “But whatever minutes I have, I’m gonna be a large Microsoft shareholder.” He said there’s a bright future for computing, storage and intelligence. Microsoft launched the first Azure services while Ballmer was CEO.
Earlier this week Bloomberg reported that Microsoft, which pledged to spend $80 billion on AI-enabled data center infrastructure in the current fiscal year, has stopped discussions or pushed back the opening of facilities in the U.S. and abroad.
JPMorgan Chase’s chief economist, Bruce Kasman, said in a Thursday note that the chance of a global recession will be 60% if Trump’s tariffs kick in as described. His previous estimate was 40%.
“Fifty years from now, or 25 years from now, what is the one thing you can be guaranteed of, is the world needs more compute,” Nadella said. “So I want to keep those two thoughts and then take one step at a time, and then whatever are the geopolitical or economic shifts, we’ll adjust to it.”
Gates, who along with co-founder Paul Allen, sought to build a software company rather than sell both software and hardware, said he wasn’t sure what the economic effects of the tariffs will be. Today, most of Microsoft’s revenue comes from software. It also sells Surface PCs and Xbox consoles.
“So far, it’s just on goods, but you know, will it eventually be on services? Who knows?” said Gates, who reportedly donated around $50 million to a nonprofit that supported Democratic nominee Kamala Harris’ losing campaign.
AppLovin CEO Adam Foroughi provided more clarity on the ad-tech company’s late-stage effort to acquire TikTok, calling his offer a “much stronger bid than others” on CNBC’s The Exchange Friday afternoon.
Foroughi said the company is proposing a merger between AppLovin and the entire global business of TikTok, characterizing the deal as a “partnership” where the Chinese could participate in the upside while AppLovin would run the app.
“If you pair our algorithm with the TikTok audience, the expansion on that platform for dollars spent will be through the roof,” Foroughi said.
The news comes as President Trump announced he would extend the deadline a second time for TikTok’s Chinese-owned parent company ByteDance to sell the U.S. subsidiary of TikTok to an American buyer or face an effective ban on U.S. app stores. The new deadline is now in June, which, as Foroughi described, “buys more time to put the pieces together” on AppLovin’s bid.
“The president’s a great dealmaker — we’re proposing, essentially an enhancement to the deal that they’ve been working on, but a bigger version of all the deals contemplated,” he added.
AppLovin faces a crowded field of other interested U.S. backers, including Amazon, Oracle, billionaire Frank McCourt and his Project Liberty consortium, and numerous private equity firms. Some proposals reportedly structure the deal to give a U.S. buyer 50% ownership of the company, rather than a complete acquisition. The Chinese government will still need to approve the deal, and AppLovin’s interest in purchasing TikTok in “all markets outside of China” is “preliminary,” according to an April 3 SEC filing.
Correction: A prior version of this story incorrectly characterized China’s ongoing role in TikTok should AppLovin acquire the app.
U.S. President Donald Trump speaks during an event announcing new tariffs in the Rose Garden at the White House in Washington, April 2, 2025.
Chip Somodevilla | Getty Images
President Donald Trump announced an aggressive, far-reaching “reciprocal tariff” policy this week, leaving many economists and U.S. trade partners to question how the White House calculated its rates.
Trump’s plan established a 10% baseline tariff on almost every country, though many nations such as China, Vietnam and Taiwan are subject to much steeper rates. At a ceremony inthe Rose Garden on Wednesday, Trump held up a poster board that outlined the tariffs that it claims are “charged” to the U.S., as well as the “discounted” reciprocal tariffs that America would implement in response.
Those reciprocal tariffs are mostly about half of what the Trump administration said each country has charged the U.S. The poster suggests China charges a tariff of 67%, for instance, and that the U.S. will implement a 34% reciprocal tariff in response.
However, a report from the Cato Institute suggests the trade-weighted average tariff rates in most countries are much different than the figures touted by the Trump administration. The report is based on trade-weighted average duty rates from the World Trade Organization in 2023, the most recent year available.
The Cato Institute says the 2023 trade-weighted average tariff rate from China was 3%. Similarly, the administration says the EU charges the U.S. a tariff of 39%, while the 2023 trade-weighted average tariff rate was 2.7%, according to the report.
In India, the Trump administration claims that a 52% tariff is charged against the U.S., but Cato found that the 2023 trade-weighted average tariff rate was 12%.
Many users on social media this week were quick to notice that the U.S. appeared to have divided the trade deficit by imports from a given country to arrive at tariff rates for individual countries. It’s an unusual approach, as it suggests that the U.S. factored in the trade deficit in goods but ignored trade in services.
The Office of the U.S. Trade Representative briefly explained its approach in a release, and stated that computing the combined effects of tariff, regulatory, tax and other policies in various countries “can be proxied by computing the tariff level consistent with driving bilateral trade deficits to zero.”
“If trade deficits are persistent because of tariff and non-tariff policies and fundamentals, then the tariff rate consistent with offsetting these policies and fundamentals is reciprocal and fair,” the USTR said in the release.