There is a moment when internet companies get the stink of death on them. For AOL, it was 2003, when it became clear that its users were abandoning its clunky dial-up internet service for far-faster broadband. For Yahoo, it was 2015, when their last-ditch acquisition spree failed, and they sold themselves to Verizon.<\/p>\n
For Meta, that time is now. I believe the company \u2014 one of the most powerful media organizations in the world and one of the most valuable members of the S&P 500 \u2014 is at the start of a long, slow decline that will trigger aftershocks to our economy and our society.<\/p>\n
It may be named Meta, but the company\u2019s biggest asset is still Facebook. Started from a Harvard dorm, the original online social network has dominated our world for two decades. Its three billion users are still bigger than any single country. Its platforms can help sway an election<\/a>, fuel an insurrection<\/a> or spark a genocide<\/a>.<\/p>\n But if you look carefully, you can see chinks in the armor. Meta\u2019s earnings are starting to show the strain from years of growing consumer disaffection and reckless spending. The latest earnings<\/a>, released on April 29, revealed a dip in user numbers for the first time since it started reporting these figures. And the slumping stock<\/a> confirms what we have all known in our guts for a while: This is a company entering its zombie era.<\/p>\n Death is different on the internet. Lifeless companies like AOL and Yahoo are still technically with us. You can visit their websites. They have customers. They may even be profitable, as they cut staff and monetize their last remnants of traffic. But they are, as the kids say, peak cringe. Many teens wouldn\u2019t be caught dead with an AOL account, a Yahoo email address \u2014 or a Facebook profile.<\/p>\n As a company\u2019s brand ages, its founders leave. The excitement evaporates. The stock shrivels to a fraction of its former glory as the user base withers to those captured by an old email account or friend group. New owners often arrive \u2014 usually bean counters who are focused on cutting costs and maximizing profits. That\u2019s when websites stoop to junk mode, spamming you with endless email \u201cfinal sales\u201d and loading up the pages with ads so gross and disturbing that they should be age-restricted.<\/p>\n Of course, Meta is a long way from hitting rock bottom. The online giant \u2014 which benefits from its ownership of WhatsApp, the world\u2019s largest messaging app, and Instagram, the popular photo-sharing social network \u2014 made $200 billion in ad revenue last year. That was an astonishing 20 percent of the global ad market. Meta\u2019s founder, Mark Zuckerberg, is still firmly at the helm thanks to an unusual ownership structure that prevents him from being fired.<\/p>\n Thanks to that, we will all get to watch Mr. Zuckerberg drive the company into the ground. From 2021 to 2026, he poured $80 billion<\/a> into the Metaverse in the firm belief that we would all want to don headsets and hang out in a virtual world populated by legless avatars. Even after shutting that project down, the company still loses billions a quarter on projects like selling $500 \u201csmart\u201d glasses that are not only unpopular but also give major creep-filming-you-without-consent<\/a> vibes.<\/p>\n While its adventures in avatars were going nowhere, Meta\u2019s revenues still soared as even more ad dollars moved online in the pandemic. Then in 2022, the revolutionary chatbot ChatGPT burst on the scene, and Mr. Zuckerberg jumped into the A.I. race with an open checkbook. Pontificating about the democratization of A.I., he sank about $100 billion into building an A.I. model that anyone could run on their own machine. But last year, when that model turned out to be too slow, too inaccurate and too unwieldy for most people to operate on their own, Mr. Zuckerberg abandoned the effort and plunked down another $14 billion<\/a> for a new team to play catch-up with the other leading A.I. models. Now Meta has said it will spend another $115 billion<\/a> (minimum) over the next year into its new effort, which thus far performs<\/a> worse than the competition.<\/p>\n Where is this money coming from? Increasingly, Meta has been using debt to fuel its spending, amassing $59 billion in long-term debt on its balance sheet by the end of 2025, double the prior year\u2019s total<\/a>. And that doesn\u2019t count the \u201caggressive\u201d accounting it has used to keep the cost of a $27 billion Louisiana data center off its books<\/a>. \u201cThe spending growth looks increasingly unsustainable,\u201d The Wall Street Journal\u2019s \u201cHeard on the Street\u201d columnist Asa Fitch wrote this week<\/a>.<\/p>\n Now, as the company careens from one staggeringly expensive misadventure to another, its cash-cow core business is starting to wear out. Last quarter, the number of daily active users across its properties declined for the first time<\/a> to 3.56 billion from 3.58 billion.<\/p>\n When an aging business starts to take on water, the quickest, easiest \u2014 and most destructive \u2014 solution is to make moves that will generate more money now, but may cost the company later. And that\u2019s exactly what Meta has started to do. In the first three months of this year, the company started cramming more ads onto its platforms while charging advertisers more. Those choices may have allowed the company to increase its revenue-per-user<\/a> by a significant 27 percent in the first quarter of 2026, but they are also likely to further alienate users (and annoy advertisers).<\/p>\n At the same time, judges and juries are starting to penalize Meta for the societal harms of its products. In March, the company (alongside YouTube) lost a bellwether lawsuit<\/a> alleging that its addictive design choices triggered anxiety, depression and body-image issues in a teen. Waiting in the wings are over 100,000 similar cases seeking claims in the tens of billions of dollars.<\/p>\n There is a grim satisfaction in watching this organization hoist with its own petard. This is the company that profited from trafficking in lies, that tuned its algorithms to boost hatred and division, that stole our data and used it against us, that created the culture of toxic memes that are now central to our degraded public discourse. The fall of Facebook could even be a sign of a heartening turn in our national conversation: TikTok traffics more in inspirational content \u2014 prom videos are currently trending \u2014 than in the divisive narratives Facebook fostered.<\/p>\n But in the continued absence of any meaningful regulation, history shows us that internet companies can still wreak a lot of damage when they are in decline.<\/p>\n As it was being outpaced by Google on nearly every front, Yahoo failed to invest in cybersecurity<\/a> and fell victim to what is still the largest data breach of all time<\/a>. In 2014, Russian hackers<\/a> gained access to 500 million Yahoo accounts, targeting Russian dissidents and journalists while stealing gift card and credit card numbers.<\/p>\n Meta\u2019s properties, which are already riddled with<\/a> fraud and scams, are likely to get even worse, given that the company has been slashing its work force in key areas focused on A.I. safety<\/a> and identifying dangerous and illegal content<\/a>. That means its apps are likely to grow even more polluted with everything from A.I. deep fakes to child sexual abuse material.<\/p>\n And Meta is still Meta. Even after losing that bellwether case on its efforts to addict users to its platforms, Meta\u2019s chief financial officer, Susan Li, recently bragged to Wall Street that the company is using A.I. to increase the amount of time users spend watching videos and interacting with content. Fortunately, given the company\u2019s recent track record, there\u2019s a good chance that at least some of these terrible ideas are likely to end up in the same graveyard where Meta\u2019s other expensive flops are buried.<\/p>\n Meta may be dying, but rest assured it won\u2019t go gently into that good night. Maybe that could be a good thing. The more users quit, and the more corroded Meta\u2019s apps grow, the faster we can all log off and close this chapter of the social-media revolution forever.<\/p>\n","protected":false},"excerpt":{"rendered":"There is a moment when internet companies get the stink of death on them. 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