How Does Facebook Company Work?

The FoA segment is the engine for Meta's user engagement and advertising revenue. As of June 2025, the Family Daily Active People reached 3.48 billion, a 6% year-over-year increase. This vast user base is served through sophisticated AI recommendation systems, which now influence over 30% of Facebook's feed content and more than 50% of Instagram's content.

Reality Labs focuses on developing virtual and augmented reality hardware and software. This division is crucial for Meta's long-term vision, with hardware like Quest headsets and Ray-Ban Meta AI glasses seeing increased sales in Q1 2024. Despite innovation, this segment continues to incur significant operating losses.

For individual users, Meta offers platforms for connection, communication, and content discovery, enhanced by personalized experiences. Businesses benefit from access to a massive, engaged audience, enabling targeted advertising and brand building through advanced AI-driven tools.

Meta's competitive edge stems from powerful network effects, where platform value grows with user adoption, and its advanced AI capabilities. These elements combine to deliver highly personalized content and effective advertising solutions, sustained by its extensive user data and continuous technological investment.

Major acquisitions like Instagram and WhatsApp were crucial for Meta's growth. The company's strategic shift towards the metaverse, signaled by its 2021 rebranding, involves significant investment in VR/AR. This demonstrates a long-term vision beyond traditional social media.

Meta faces regulatory scrutiny regarding data privacy and antitrust issues. Changes like Apple's App Tracking Transparency framework have impacted its advertising business. The company has responded by investing in privacy tech and diversifying ad products.

The Reality Labs division has incurred substantial operating losses, exceeding $45 billion since the end of 2020. In response, Meta implemented efficiency drives, including workforce reductions of approximately 21,000 jobs in early 2023.

Meta's competitive edge lies in its vast user base, network effects, and sophisticated AI capabilities, powering its advertising platform. Its strong brand portfolio and developer ecosystem are also key assets. The company is integrating AI across its products and focusing on short-form video content.

Meta Platforms is a leader in digital advertising, with Facebook and Instagram driving significant social app revenue. While its market share in social apps is projected to decrease from nearly 89% in 2013 to 38.2% by 2025, the company remains a dominant force in the rapidly expanding digital ad market.

Meta faces substantial risks including increased regulatory scrutiny over data privacy and antitrust issues, particularly in the EU and US. Emerging competitors, shifts in consumer preferences towards short-form video, and significant operating losses in its Reality Labs division also present considerable challenges.

The company's future strategy is heavily focused on artificial intelligence and the metaverse. Meta anticipates substantial capital expenditure growth in 2025, with investments directed towards AI infrastructure, including data centers and GPUs, aiming to enhance its core advertising business and establish leadership in the metaverse.

Meta plans to invest significantly in AI, with projections of up to $65 billion in 2025. This investment aims to make Meta AI the most used AI assistant globally by the end of 2025, supporting its long-term growth ambitions in new computing platforms.