While social media giant Meta Platforms (META) has been rapidly advancing its position in technology, trying to evolve beyond social media, it is clear social media is still a very big part of the picture. Sufficiently big, in fact, that social media advertising represents a big part of Meta’s revenue. But a former Meta executive revealed, in a report in Fortune, that ad fraud is also a problem at Meta. Not so big a problem as to balk investors, though. Meta shares were up over 2% in Thursday afternoon’s trading.
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The executive in question, Rob Leathern, noted that Meta generated about $18 billion in ad revenue from China back in 2024. That represented about 10% of Meta’s global revenue. However, around $3 billion of that number came from “…ads tied to scams, illegal gambling, pornography, and other prohibited activity.”
While Meta’s social media platforms—Facebook, Instagram, and WhatsApp—are all blocked in China, China’s advertisers are still eager to spend on the platform to advertise everywhere else. Leathern noted, “It appears that a variety of business partners that Meta has are not conducting themselves in an ethical way and/or there are employees of those companies that are not doing what they’re supposed to be doing. It’s quite telling that Meta took down its entire partner directory, which obviously means that they must be reviewing their partners, and there’s a lot of them.”
Facebook Subscription
Perhaps not satisfied with those billions, Facebook is currently testing a monthly subscription service based on how many links are shared via the platform. Users in the United Kingdom and the United States are reporting that Facebook is telling them they can only share certain numbers of links with a subscription. Subscription rates, meanwhile, start at 9.99 pounds sterling a month.
Meta calls this “…a limited test to understand whether the ability to publish an increased volume of posts with links adds additional value…” for subscribers. Others question how charging users to add links beyond an arbitrary threshold adds value for anyone but Facebook.
Is Meta Platforms a Buy, Sell or Hold?
Turning to Wall Street, analysts have a Strong Buy consensus rating on META stock based on 41 Buys and six Holds assigned in the past three months, as indicated by the graphic below. After a 9.06% rally in its share price over the past year, the average META price target of $830.17 per share implies 25.08% upside potential.
