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A look at the year social media companies had

ARI SHAPIRO, HOST:

Over the last year, Facebook burned through billions of dollars trying to make the Metaverse happen. Elon Musk spent $44 billion to take control of Twitter, only to see a number of advertisers and users flee. And across Silicon Valley, tens of thousands of workers have been laid off. NPR's Shannon Bond reports on the rocky year that was for social media companies.

SHANNON BOND, BYLINE: At the beginning of the year, big social networks were trying fresh starts. Facebook CEO Mark Zuckerberg had renamed his company Meta to signal a new direction.

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MARK ZUCKERBERG: From now on, we're going to be Metaverse first, not Facebook first.

BOND: Twitter co-founder Jack Dorsey had handed the reins to a new CEO, Parag Agrawal.

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PARAG AGRAWAL: Twitter serves a very important role in the world, and we've got responsibility to make it the best it can be very seriously.

BOND: But within months, things changed dramatically. Amid global economic turmoil and Russia's invasion of Ukraine, the online advertising market cratered. Facebook announced its first-ever declines in users and sales. The company has lost about two-thirds of its market value this year. Elon Musk made a surprise bid for Twitter, spent months trying to get out of buying it and then unleashed chaos when he finally took over. Layoffs followed.

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UNIDENTIFIED REPORTER #1: Facebook parent Meta will begin laying off workers this morning.

UNIDENTIFIED REPORTER #2: The parent of Snapchat plans to lay off about 20% of its nearly 6,500 employees starting today.

UNIDENTIFIED REPORTER #3: Twitter is reportedly laying off about half of its 7,500 employees today.

BOND: But it's not just economic and management upheaval that's shifting the foundation these companies have built their businesses on. Social media is entering a new era of fragmentation. Katie Harbath is a former public policy director at Facebook.

KATIE HARBATH: Users are using them differently. Advertisers are using them differently. People are going to different places to get their entertainment, and advertisers are trying to figure out where those eyeballs are.

BOND: That shift is epitomized by TikTok, the Chinese-owned short video app. Instead of connecting with friends, TikTok is all about seeing the most engaging videos from anyone anywhere. And that sent companies, including Facebook and Google, scrambling to copy TikTok's features.

MICHAEL SAYMAN: There's a shinier object in the social media space, and it doesn't involve your friends and what your friends are up to.

BOND: Michael Sayman is an app developer who's worked at Facebook, Google and Twitter. TikTok is facing bans by state governments and the federal government, but it's already changed the landscape. Sayman says the race to emulate TikTok is pushing the big social media apps to become more like TV networks, where a tiny fraction of users create almost all the content.

SAYMAN: I think really the moneymakers in social media and really the profit for these companies is not anymore in the business of, like, friend sharing.

BOND: That's left many people looking for alternative ways to keep up with friends through messaging services like WhatsApp, Signal and Discord and apps like BeReal, where users post one unedited photo a day that can't be liked or shared. Disillusionment with the legacy social sites has also inspired a new crop of apps by and for conservatives who feel their views are muzzled by Silicon Valley. Now, that partisan fracturing extends to Twitter, where Musk is courting right-wing users and alienating advertisers, employees and regulators. Harbath says it shows an evolution in how people think about what they share online.

HARBATH: You know, the early days of social media, like particularly Facebook, thought that, like - that people have one identity and that they want to share parts of themselves with everybody that's in their lives. And it's actually turning out that that's not the case.

BOND: Which suggests the next era of social media will be defined not by one mega company but by connections and content scattered across many apps. Shannon Bond, NPR News. Transcript provided by NPR, Copyright NPR.

Shannon Bond is a business correspondent at NPR, covering technology and how Silicon Valley's biggest companies are transforming how we live, work and communicate.