Mark Zuckerberg is completely crazy about metaverses – unlike investors. As it turns out, few people share the excitement of the owner of the Meta.
The start of the metaverse was great, but the effects are not in sight
Do you remember the Meta conference last October? Big plans and more Zuckerberg excitement about the metaverse. In fact, the CEO of Meta has managed to build huge popularity around the digital world, but at the moment he has done little to nothing.
There is a lot of noise, but the effects are not visible. We hear a lot about the metaverse – every day big new brands enter the world of Web3, and we read every now and then about plans to create a new metaverse, yet it is still completely shrouded in mystery and is simply incomprehensible to most people.
Mitty is a problem
Zuckerberg said some interesting things when announcing the company’s results for the first quarter of 2022 – including that Meta will slow the pace of some investments due to the current level of business growth. Meta’s first-quarter profit was $7.5 billion, 21 percent lower than a year earlier. However, revenue grew 7 percent to $27.9 billion, the slowest growth rate since the company debuted a decade ago. The spending target for 2022 has been reduced by $3 billion. Well, this is not good.
The CEO of Meta continues to spend billions annually building hardware and software seamlessly for the metaverse after all. Zuckerberg’s belief in this project is downright terrifying — and it’s safe to say it’s starting to sound like an obsession. The Reality Labs division, which produces the Oculus Quest glasses and a futuristic augmented reality glasses project, has approximately 17,000 employees. This branch alone lost nearly $3 billion in the last quarter. Metaverse simply does not pay off, and therefore investors have more and more doubts – the greater the amount that can be expected from this investment only in a few years.
Investors are not convinced by this project and the results of Meta do not improve the situation
At this point, the meta is the slowest development in its history. Stock prices are down nearly 50%, sharply slowing the company’s 5-year-long growth. In addition, TikTok significantly reduced the statistics of active users on Facebook or Instagram, which Meta loudly expressed dissatisfaction with – after all, for the first time it is not the largest social media application of their own. The bricks added to the fact that changes to Apple’s ad tracking have already cost Meta over $10 billion in lost revenue. And if that wasn’t enough, regulators have blocked Zuckerberg’s ability to make major social media acquisitions that could spur growth again.
All this, combined with average results – so far – mean that a significant number of investors are starting to move away from the once huge company. We also recently saw the first ever drop in daily user numbers in the last quarter of 2021. Facebook succeeded in increasing daily users, but only by 4 percent, to 1.96 billion in the last quarter. For everyday users on Instagram, WhatsApp and Facebook, it’s not much better – the number has increased slightly from 2.82 billion to 2.87 billion.
Besides the fact of having an exorbitantly high commission and accusing Apple of hypocrisy, Meta is going through the worst time of its entire life. So I’m not sure if it’s a good idea to invest a lot of money at this point in a new technology and it’s still completely experimental.
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