Facebook invests billions in Metaverse efforts
Facebook said it is beginning to publish financial results for its augmented and virtual reality labs as a separate unit, as it invests billions in its ambitions to build Metaverse, as it says its main advertising business faces significant uncertainty.
The company, which announced the increase its profits In the third quarter, 17 percent, Apple’s new privacy changes affect its digital business in the current quarter.
The social media company reported that its quarterly revenue was below market expectations, and COO Sheryl Sandberg told analysts that was due to the iOS changes.
David Weiner, Facebook’s chief financial officer, said the company expects its investment in its hardware division, Reality Labs, to reduce its overall operating profit in 2021 by about $10 billion.
The financial commitment for this hardware-focused unit that runs on Metaverse’s ambitions comes as the company is mired in covering up documents leaked by former Facebook employee Frances Huggin.
The leaks showed that the company chose profit over user safety. CEO Mark Zuckerberg defended criticism of the documents, which he said painted a wrong picture for our company.
The CEO said that in the coming years the company will not be seen as a social media company but as a company focused on Metaverse.
The term refers to a shared virtual environment that can be accessed by people using different devices.
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This comes in light of the slowdown in advertising business
Facebook, which has invested heavily in virtual reality (VR) and augmented reality (AR), including buying companies like Oculus, this year created a product team to work on Metaverse.
It said this month that it plans to hire 10,000 employees in Europe over the next five years to work on the initiative.
“This investment will not be profitable for us anytime in the near future,” Zuckerberg said. But basically we think Metaverse is the successor to the mobile internet.
As of the fourth quarter of 2021, Weiner said, Reality Labs will become a separate part of Facebook’s suite of apps in the reports.
In the third quarter, the company reported 2.91 billion monthly active users, up 6 percent from a year ago. But less than analysts’ estimates.
Executives emphasized the company’s focus on attracting young people, including through its short video feature Reels.
“We are retooling our teams to make youth service a milestone,” Zuckerberg said. Rather than improving it for more seniors. A shift he said would take years, not months, to fully implement.
The leaked documents show the company’s continuing concerns about its appeal to younger users, as competitors like TikTok are popular with teens.
It also shows the difficulties that the company faces in dealing with users who create multiple accounts across its platforms.
Facebook said it expects fourth-quarter revenue to be between $31.5 billion and $34 billion. The company’s total revenue rose to $29.01 billion in the third quarter from $21.47 billion a year earlier.
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