What happened
Shares of Meta Platforms (META 3.77%) were in positive territory on Thursday morning, climbing as much as 2.7% on a day when the broader market was in the red. As of 3:15 p.m. ET, the stock was still up 1%.
The stock was reacting to reports that Meta is planning to build paid features across its family of social media apps.
NASDAQ: META
Key Data Points
So what
Meta Platforms is building a team to explore "possible paid features," according to The Verge. This new product organization will be charged with building optional paid features that could be deployed across Facebook, Instagram, and WhatsApp, according to the report, which cited an internal memo sent to Meta employees.
In a subsequent interview, John Hegeman, Meta's vice president of monetization -- who will oversee the project -- said the company's main focus will still be increasing its advertising business, but believes there are opportunities to generate additional revenue.
"I think if there are opportunities to both create new value and meaningful revenue lines and also provide some diversification," Hegeman said, "That's obviously going to be something that will be appealing."
While he didn't provide any specifics on what paid features were being considered, Hegeman said the company wasn't considering a paid plan to let users turn off ads.
Now what
When Meta Platforms released its second-quarter financial report in late July, it included the first year-over-year revenue decline in the company's history. While the shortfall was the result of currency headwinds caused by a strong dollar, it showcased the obstacles Meta Platforms faces.
Privacy features introduced by Apple make ad-targeting much more challenging, and macroeconomic uncertainties have led companies to cut back on ad spending.
That said, roughly 2.88 billion people access Meta's social media platforms each day, giving the company a fertile field to plow. Even if it's only able to entice a small number of users to opt for its upcoming paid features, the company could still generate billions of dollars in additional revenue.
