Metaverse (Facebook)

Hi, everyone

The company Meta has recently been in the headlines for a number of reasons, including workers allegedly taking bribes and stealing user accounts, a declining stock price, major layoffs, an unsuccessful business plan, and of course, a disastrous Metaverse project. The net profit for the quarter was down 52% according to their most recent financial report. If nothing changes, it appears that the corporation that everyone loves to despise will face major difficulties.

This time, we’ll talk about the one inexorable giant’s writhing. Investors in meta are not at all pleased. They’ve had stagnant growth, falling sales, and losses. Meta had a worth of almost $1 trillion less than a year ago. Less than a third of that is worth it today. In other words, the decline has been so severe that the stock price has returned to January 2016 levels. You would have lost money if you had invested in Meta at that time without taking profits. Meta has had the worst performance of any stock in the S&P 500 this year, falling 70%.

We need to go back to 2005 in order to get a clear understanding of why meta is collapsing. Sean Parker, who was the president of Facebook at the moment, would assist Mark Zuckerberg in navigating Silicon Valley during this time. He would, however, assist Mark in taking total control of the business. Sean Zuckerberg would build up the business under his direction so that he could effectively rule as king. Even the board of directors had to submit to his authority. He was impenetrable and would remain so indefinitely. The company would suffer as a result of this dictatorship. Users began switching from PCs to cellphones in the 2010s. Despite adapting, Mark Zuckerberg believed Facebook might have been a bigger role in the hardware industry. In 2013, Facebook attempted to introduce their own smartphone. The general populace, however, rejected it. Mark had to give something else a shot. And he would discover it in 2014. Zuckerberg was convinced that virtual reality would change the way computers functioned after viewing an Oculus demo. Then, in order to realise his goal, he would spend $10 billion annually on research after purchasing Oculus for $2 billion.

And this brings up one of the main problems since Mark was king. Even if they thought it was a horrible idea, nobody in the firm could stop him. However, I believe that the trajectory of technology as a whole makes a widely used Metaverse environment for the general public inevitable. a virtual setting where a VR online life is led. Problem is, this future is yet five or fifteen years away. Meta might be able to wait and finish writing it if it’s five years away. This is a serious problem, though, and shareholders won’t put up with it if it’s 15 years away. Investors get the impression that Zuckerberg is relying too heavily on an idea that the world isn’t yet ready for for his Tyson company. This problem was solved by Apple with the iPhone. Meta here is not comparable. at the very least not yet. They’re doing some interesting stuff with the hardware and have sold over 10 million VR headsets, which is positive. nevertheless, on the software front. The worlds of Meta’s flagship Metaverse product, Horizon, look terrible. Really, I find it hard to imagine that this cost more than $15 billion to build.

But I believe that Zuckerberg is right that VR will be the technology that brings people together in a way that other technologies cannot. possibly not. But there is simply a tonne of work to be done. According to Palmer Luckey, the creator of Oculus, Horizon Worlds is a subpar product that isn’t enjoyable, is horrible right now, but has the potential to be fantastic in the future. And the fact is, making a fantastic VR experience is not inconceivable. Virtual reality chat is already far superior in many ways. The vice president of Horizon Worlds left in August 2022, thus nothing is known about what went on behind the scenes. The second problem is the disabling of metal targeted advertising’s primary revenue stream. And once more, we must go back to 2008 in order to completely comprehend this. Sheryl Sandberg, a former executive at Google Ads, will join Facebook this year as COO. She would balance her careless actions in the early days. She also contributed to the development of highly successful advertising based on user personal data, which helped make early employees wealthy and sent Facebook into the stratosphere. This was awful for customers but good for wallets. When users learned they were being taken advantage of, they totally detested it. However, it didn’t matter because the business was raking it in without realising it.

Meta was now open to attack from any outside force that prevented it from gathering data. And in 2021, this is precisely what occurred. According to Tim Cook, iPhone users must be able to turn off their ad targeting and meta lose billions. According to statistics, iPhone consumers often spend more money than Android users do. Therefore, Apple’s action affected Facebook a lot. Advertisers are now starting to switch to Google as a result of David Wernher’s encounter with his chief financial officer. All had been exposed and were now subject to a clear examination thanks to Meta’s vaporising revenues. To be honest, Meta is a corporation that isn’t developing its main goods. The development of the user interface and the user experience is put off. Instead, meta concentrates on taking other features from other platforms and integrating them into Instagram, including reels from Tik Tok. However, it is a difficult undertaking to compete with one of the top social media algorithms on the planet. Reels are less profitable than Instagram’s other offerings. Regarding the user experience, Instagram has become overrun with advertisements and is veering more and further from its initial concept. During its first ten years as Facebook, the company led the way in social media innovation. Clearly, this phase is over. Sheryl Sandberg, the longstanding CEO and purportedly the adult in the room, left meta in the early months of 2022. Mark Zuckerberg is currently a monarch without any restraints. Facebook has let go 11,000 employees, or 13% of their workforce. Despite the fact that major tech and other high-risk ventures are being destroyed by rising interest rates. It’s nothing to be alarmed about if a stock drops 70% in a single year. Zuckerberg claims that excessive investment was the problem, but it doesn’t appear like investors would be concerned about doubling down on the metaverse.

In a call with investors on November 10th, he said that he believed the COVID-related E-commerce boom would be sustained. As a result, he raised his assets greatly. Unfortunately, things did not turn out as I had hoped. Online shopping has not simply reverted to previous patterns. But despite my expectations, our revenue has been substantially lower than I had anticipated due to the macroeconomic slump, increasing competition, and ad signal loss. I acknowledge that I made a mistake in this.

In addition to its financial problems, meta is under investigation by the FTC and other lawmakers. Antitrust is coming and could either cause the company to be broken up or make it more difficult for them to just acquire businesses as they could in the past. I also don’t need to go over all the controversies, including the Cambridge Analytica records on social divide and mental health that were exposed. The changing demographics also don’t help. Meta’s lunch has been devoured by Tik Tok on Facebook and Instagram. Despite the fact that older individuals typically have more money, The New York Times’ Kevin Rose claims that advertisers prefer to target the younger group. To cut a long story short, a monarch with tunnel vision is causing Meta to experience an identity crisis.

So what can be done?

From the outside, it appears that some introspection is necessary. Mark could want to accept this since Meta is currently common among businesses. One business is a wholly technological enterprise seeking to establish the metaverse. The other is an advertising and social media company. And the CEO of this business is no longer paying attention. Perhaps it’s time to have the social media component operated by a separate CEO as a true business. The fact that Matter still has close to 4 billion customers is the sole shining sign of optimism. There is a great deal of possibility for improvement. But first, will they, and second, do we even want that? Just imagine if someone else had created a Metaverse for everyone, I wouldn’t be upset.

What do you think, guys? Please feel free to remark below and engage in conversation. Anyway, that’s all I have to say.