Meta’s future seems to be notably different from what was expected. Because of the weakening economy and brutal competition, Meta’s growth is at a critical state. Moreover, Meta has decided to put a pause on hiring employees to deal with the financial stress. As such, Meta’s vision of the Metaverse doesn’t seem to be turning into reality anytime soon.
A 2-year report has been prepared which consists of Meta’s businesses, including the advertising area, Metaverse, social commerce, creators, payment, and virtual currency. It also advises companies relying on virtual reality platforms and Meta’s social media for future strategies.
From the report, it is clear that Meta’s ad revenues in 2022 will be $16 billion less than what was expected this year. Seven months ago, according to the March 2022 forecast, the ad revenue was expected to be around $129.16B. After seven months, according to the October 2022 forecast, it became $112.68B, that is, $16 billion less than expected.
Meta has made a massive investment in virtual reality, but unfortunately, the actual reality of Meta doesn’t seem to be pleasant. Meta’s recent earnings report shows that it is currently at the lowest level in almost 4 years. According to Wall Street analysts, Meta’s state is described as a “train wreck.” A year ago, the condition of Meta was quite different when Mark Zuckerberg announced that Facebook would change its name to Meta to highlight the importance of the “Metaverse” in the digital world.
Other platforms, including Facebook and Instagram, have experienced high profits and significant revenues. They have achieved billions of users this year. Despite that, the downfall of Meta has shocked everybody. This plunge of Meta reflects an eye-popping loss of billions of dollars. The question at this point is whether Meta’s downfall will affect other social media businesses that plan to gamble on it in the future. The answer is yes. Their investments in Meta might not pay off. For instance, Facebook will face a bigger challenge as the advertisers’ spending shrinks and the economy slows down.
The owner of Meta, Mark Zuckerberg, also seems to be affected by this plunge. A significant part of his wealth comes from social media platforms. So, he has lost almost $88 billion during the past 12 months. However, he still believes things will improve and issued a statement encouraging business people to invest in it. He thinks those people patiently waiting and investing in Meta will be rewarded.
Meta’s Reality Lab units are responsible for developing virtual reality, which has lost $9.4 billion in 2022. According to the company’s statement, it is expected that the investments in the Reality lLb units will pace up, and it will further help Meta achieve their goals.
Regarding the queries about Meta being too experimental and a risk-taker, Mark clarified that there is a thin line difference between being experimental and not knowing how good or bad things will turn out in the end. He believes that new things they are trying on the Family of Apps will work. He gave examples of business messaging features, TikTok-like reels, short video service, online advertising technology, and content recommendation algorithms.
He clarified further that he couldn’t tell how much improvement people should expect in Meta, but each improvement went in the right direction. He has the same point of view regarding the Metaverse. According to him, it will take a lot of effort and time, but it will also work. He said that there couldn’t be a single solution to every problem, so no one can claim that “we’re going to do this one thing, and that’s going to solve all the issues.” Given all the complexities and uncertain situations in the business world, one can do its best and wait for the results.
Meta is facing poor economic conditions and is suffering the effect of Apple’s privacy update, so it’s not as easy to target ads to users now as it was before, Zukerberg said. He is now looking for long-term investments, believing they will pay off with a considerable return.
Zuckerberg made it clear that part of the reason for developing the Metaverse is to have a platform in the future that doesn’t get affected by the decisions or policies of rivals like Apple. However, the main reason remains the same: Zuckerberg wants tech companies to be more innovative while developing both hardware and software. The chances of building innovative technology are higher when more of the stack is in control.