The company is facing growth headwinds because competitors like ByteDance's TikTok are increasingly winning attention. That platform has amassed over 1 billion monthly users, and its rapid growth has forced Meta to introduce a new feature on Instagram called Reels. The new feature already accounts for 20% of users' time spent on Instagram, and how quickly that segment grew in the second quarter will be very telling for Meta's ability to stave off the threat TikTok poses.
Investors will also be keeping an eye on Meta's Reality Labs segment, which burned $10 billion in 2021 and a further $2.9 billion in the first quarter of 2022. It's tasked with building the company's vision for a virtual world known as the metaverse, which CEO Mark Zuckerberg thinks is the next frontier in social and professional networking. He initially wants to attract 1 billion users to this new-age platform, and anticipates they each could spend hundreds of dollars on digital goods and services within it.
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