Tech

Mark Zuckerberg’s bet on the metaverse got off to an expensive start


Mark Zuckerberg’s metaverse axis is starting to slow down. The company now known as Meta will lose just over $10 billion from the Reality Labs division by 2021, Q4 income statement.

“This fully realized vision is still fraught with difficulties,” Zuckerberg said of Meta’s metaverse investments. “And while the direction is clear, the path ahead of us is not yet perfectly defined.” Zuckerberg said the company planned to launch a new “premium” VR headset as well as its mobile version Horizon VR experience.

This is the first time the company has shared the financial performance of its AR and VR divisions, the heart of its hyper-reverse ambitions (Facebook acquired Oculus in 2014). The fact that the metaverse has not yet turned a profit is not a surprise. The company said last quarter that their AR and VR investments will result in a $10 billion loss. But combined with steady user growth and continued hits to its ad business, the company’s fourth-quarter results sent Meta’s stock into the one nose Wednesday.

Facebook's DAU fell slightly.

Meta

Among the concerns: Facebook’s daily active users (DAUs) fell from 1.93 billion last quarter to 1.92 billion, a change Zuckerberg attributes in part to increased competition increase from TikTok. “We’re in the process of converting our own services to short videos like Reels,” Zuckerberg said. “Reels is currently our fastest growing content format to date.” But he added that Stories are not monetizing as well as Stories or feeds. The Facebook founder said last quarter that attracting “youth” between the ages of 18 and 29 would be one of their top priorities, as Facebook re-orients its platform around short-form video to compete. compete better with TikTok. But while Reels is showing strong growth, Facebook’s overall user growth suggests the feature has yet to attract the new users Zuckerberg wants to reach.

Facebook’s revenue growth is also expected to slow in the coming months. While its ad business remains monstrously profitable — it made $32.6 billion last quarter — the company warned that Apple’s iOS 14 change privacy will have a significant impact in the next quarter. “The accuracy of our ad targeting decreases, which increases the cost of driving results,” COO Sheryl Sandberg said on the call. Zuckerberg said improving the company’s advertising despite Apple’s changes is one of Facebook’s top priorities, and that it is “rebuilding a lot of our advertising infrastructure.”

Until then, though, Apple’s ad-targeting changes could suck money as its super-reverse investments. Chief Financial Officer Dave Wehner said: “We believe the impact of iOS as a whole will be a headwind to our business in 2022. “So that’s a big headwind for us. our business.”

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