Mark Zuckerberg’s goal is the universe in mind – and this is an expensive consideration.
According to a new profit and expense forecast that Facebook offered to investors in its third-quarter earnings report, it is worth $ 10 billion this year alone. And that figure of $ 10 billion, as analysts later told a conference call, Zuckerberg is likely to only increase in the coming years.
For Zuckerberg, the metaverse, Silicon Valley’s cutting-edge concept of future social networking will rely on augmented and virtual reality technology, is a way out of his company’s existing problems: Facebook could be bigger than ever, with more than 3 billion users. world. But his popularity among young people has declined over the past decade, and heightened antitrust attention around Facebook means he can’t buy a way out of the problem by picking up some promising new rival (as was the case with Instagram and considering doing with TikTok and Snapchat). As a result, Facebook must figure out how to create a new service that will help attract young users.
Zuckerberg acknowledged Facebook’s struggle to maintain popularity among this demographic group, speaking at the conference. “We are re-equipping our tools to make young adults our northern star,” he said, while acknowledging that it would cost older users. (The latter is a problematic basis for Facebook support – too old for advertisers and too prone to spreading misinformation that has brought the company into boiling water.)
Price is a new discovery, but Facebook has already quite publicly announced its meta-global ambitions. Zuckerberg may link these hopes to his company even more directly, and is reportedly considering a name change to Facebook Inc. to reflect the new focus of the metaverse, a renaissance that could be announced at Thursday’s Connect conference. Facebook is already offering several VR headsets through the Occulus brand, which it acquired in 2014, and has introduced a beta version of the Horizon Worlds platform, which it hopes will attract users looking to create virtual worlds and objects.
“If you’re in the metaworld, you’ll need digital clothing, digital tools, and a variety of experiences,” Zuckerberg told analysts. “Our goal is to help the metaworld reach a billion people and billions of dollars in trade in the next decade.” Zuckerberg warned that the creation of “this fundamental platform will be long”, instructing Wall Street to expect that Reality Labs will lose money for many years.
In addition, Facebook plans to change its financial reporting structure by moving the internal team that manages its meta-universe projects, Reality Labs, to a separate division. This has a dual purpose: if the meta-universe is implemented, separately reported financial data will give investors a clear idea of its growth along the way. If it does not, Facebook will retain the ability to show the constant profitability of its application (Facebook, WhatsApp, Instagram). Keeping these two factors together will make it a little harder for Facebook, and the two of me will need to consistently explain to investors the composition of the pooled metrics so shareholders don’t mistake the VR team’s losses for a new weakness in Instagram or Facebook’s business.
To manage this metaverse, Zuckerberg has appointed a top manager of Facebook: Andrew Bosworth, a longtime friend of Zuckerberg, who previously created many proprietary features of Facebook, such as NewsFeed. As head of Reality Labs, Bosworth is now vice president and will rise to chief technology officer next year.
Metaverse has attracted attention not only on Facebook, but also for a long time. (Science fiction author Neil Stevenson coined the term in 1992.) In fact, VR technology has proven difficult to commercialize. Occulus developed its first VR headsets more than a decade ago. But the first versions released after the acquisition of Facebook were expensive, awkward and devoid of any popular programs. Competitors such as Samsung and Google also tried their hand at focusing their headsets on smartphones that were not powerful to provide a full experience. The Florida startup Magic Leap raised $ 4 billion in nine years, but managed to put only one iteration of its headset, which failed. And although Facebook has now filed about 1,500 patents related to AR and VR, Samsung, Microsoft and Sony have nearly 2,000 such patents each.
Given that Facebook receives about $ 30 billion in annual revenue to fund the metaverse, Zuckerberg doesn’t seem impressed. “We believe that the metauniverse will become the successor to the mobile Internet. We think it will open up a much bigger creative economy than what exists today, “he said Monday, creating” an important pillar of our company for the next decade. ” A pillar that he can also feel he has no choice but to try to build.