“We're focused on growing Reels as a major part of the Discovery Engine vision, and we expect that this expansion in engagement to shift from a short-term headwind to a tailwind at some point.”

In context

“from the shift to short-form video that I just mentioned. In the near-term, this is a drag on revenue because Reels monetization is less than feed or Stories, but I expect that will improve over time. We've seen this type of media format transition multiple times before. Back in 2012 when we transitioned from desktop feed to mobile feed, we saw mobile feed growing massively but not monetizing well yet, and we leaned into it, went through some tough quarters, and then it became the foundation of our business today. Similarly, in 2018, when people started using Stories more instead of Feed, but Stories didn't monetize as well as Feed yet, we still doubled down on Stories, had another tough period, but came out stronger than ever. So we've run this play before and we're running it again now. We're focused on growing Reels as a major part of the Discovery Engine vision, and we expect that this expansion in engagement to shift from a short-term headwind to a tailwind at some point. Now while this is playing out, we're also managing the headwinds from signal loss that we've discussed a lot recently. This means growing first-party understanding of what people are interested in by making it easier for people to engage with businesses in our apps, whether that's completing purchases on Facebook or Instagram, or messaging businesses on WhatsApp or Messenger. It also means making sure that we build the best privacy enhancing technologies to provide accurate targeting and measurement to advertisers even when purchases aren't happening within our apps. We're making major AI investments to build the most advanced models and infrastructure in the industry. Over the next year or two, we hope that this drives better recommendations for people, higher returns for advertisers, an”