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reddit Shares fell about 6% on Friday. meta A system called a forum can create an alternative means for Internet users to come together and create discussion groups.
Forum, released as a test app apple’s iOS is part of Facebook Groups. Trust analysts wrote in a note Friday that this is “the company’s attempt to rival Reddit as an online forum for public discussion” and “represents a new threat.”
Despite ramping up its online advertising business, Reddit’s stock price has fallen nearly 40% this year. In April, the company reported sales growth of more than 60% for the seventh consecutive quarter. Meanwhile, Meta reported 33% revenue growth in its latest quarter.
“The risk if this move is successful is that Reddit will gradually become less useful to casual users who don’t have much community loyalty and are simply looking for answers,” Truist analysts wrote, recommending the stock to be a buy. “This will impact non-core Reddit users more than regular users who are directly logged in.”
Reddit did not immediately respond to a request for comment.
Meta (then known as Facebook) created a separate Facebook Groups app more than a decade ago, but shut it down in 2017. The service still exists as part of Facebook and, similar to Reddit, hosts discussion groups on all sorts of topics.
In focus: Meta’s struggle to win over AI company customers.
