“This week will go down in financial earnings history as one of the worst for Big Tech, and even a possible turning point,” Wedbush Securities analyst Dan Ives said Thursday.

Alphabet, the parent company of Google, achieved its weakest revenue growth this summer since 2013, apart from the start of the Covid-19 pandemic.

Microsoft, driven by the cloud, published good quarterly results on Tuesday, but warned that Azure, its remote computing platform, would grow less quickly during this end of the year.

As for Meta (Facebook, Instagram, WhatsApp, Oculus), it's a "disaster", according to Dan Ives.

The title of the company plunged 19% on Wednesday evening, a consequence of profits halved to 4.4 billion dollars, and especially comments from Mark Zuckerberg.

The founder of the Californian group insisted during the analyst conference on its priorities, namely "artificial intelligence technologies which make it possible to recommend reels (short videos copied to TikTok, editor's note) to users", "advertising tools on messaging" and "our vision for the metaverse".

Mark Zuckerberg on July 8, 2021, in Sun Valley, Idaho Kevin Dietsch GETTY IMAGES NORTH AMERICA/AFP/Archives

"Those who are patient and invest with us will be rewarded in the end," said the leader.

"The worst is over"

But the immense deployment of resources to build a parallel world, accessible via augmented and virtual reality, is attracting more and more skepticism from observers, at a time when inflation and rising interest rates eat into corporate margins.

“There is no information on the revenue potential that Meta could derive from the metaverse. Nobody knows,” notes Debra Aho Williamson, analyst at Insider Intelligence.

"Google has a better chance of rebounding quickly, because its search engine has been a bedrock of the internet for decades, both for consumers and for businesses. Its business model is not broken," she elaborates. .

Faced with global economic difficulties, many advertisers have cut their marketing budgets.

Meta AFP Results

Snapchat is particularly suffering from this: despite the good growth of its users, the application with augmented reality effects is considered an experimental communication channel.

Meta, for its part, saw the number of advertising spaces sold increase by 17% in the third quarter, while their average price per unit fell by 18% year-on-year.

"We knew that global ad spending was going to contract. But I think the worst is over," said Tejas Dessai, analyst at Global X ETFs.

"And it's not going too badly, the declines remain modest given the pressure on exchange rates and inflation."

"Fearsome Competitor"

Silicon Valley is also suffering from an unfavorable comparison effect with 2021, when the pandemic still greatly benefited online services.

But one of the reasons for the depression of the big platforms is not about to disappear: the ultra popular TikTok does not stop taking up space.

In 2021, the entertainment app overtook Google as the world's most popular website, according to Cloudflare, an internet service provider.

In 2021, TikTok overtook Google as the most popular website in the world, according to Cloudflare Wakil Kohsar AFP/Archives

Google and Meta have copied TikTok's successful format, with "shorts" and "reels", respectively, but they are struggling to turn their investments into profits so far.

"More than 140 million reels are played on Facebook and Instagram every day, 50% more than six months ago", however announced Mark Zuckerberg.

"And we think we're gaining time spent market share (on our apps) from competitors like TikTok."

"TikTok is a formidable competitor, but in terms of advertising revenue, there is no comparison", recalls Debra Aho Williamson.

Industry veterans are "still way ahead".

Amazon and Apple are due to announce their quarterly results on Thursday evening.

The market expects iPhone demand to hold up well despite the unfavorable economic conditions.

© 2022 AFP