Facebook, now more commonly known as Meta, has a history of being the victim of Mark Zuckerberg’s hasty decisions. The company has recently spent astonishing sums of money on developing an immersive alternative to the conventional 2D internet.
According to Zuckerberg, the metaverse is the destiny of the internet and his trillion-dollar company. He has absorbed himself in it completely. But was the decision correct? Zuckerberg’s plan to transform Facebook from a social media firm to a metaverse organization has been mocked by many critics.
Some people claimed that the company diverted attention away from the issues —problems like deteriorating teen mental well-being, enabling the spread of misinformation, and escalating political polarization—by concentrating on the metaverse and virtual reality.
Why did Facebook Invest Staggering Amounts in Virtual Reality?
Mark Zuckerberg has gambled his reputation on the growth of the metaverse over the past few years. He thinks that these brand-new virtual environments will change the world as smartphones did 15 years ago.
According to Zuckerberg and other Meta leaders, virtual worlds will have tremendous social and economic significance. They will help to eliminate border conflicts and reduce online hostility. They also believed this unexplored excursion would revive the corporation into the metaverse.
In an initiative to become the corporation that introduces a new virtual period, Facebook changed its name, invested $10 billion in virtual and augmented reality, and formed tense alliances with tech rivals and international governmental organizations.
What Were the Results?
Mark Zuckerberg led people through his simulation of the coming years of virtual reality, which included gambling in outer space with your friends, sharing cool things, attending birthday celebrations and business meetings with people around the globe, and customizing avatars.
However, the results of these efforts were not all that great. The company’s Reality Labs, the division in charge of carrying out Mark Zuckerberg’s metaverse ideas, revealed an operating loss of $3.67 billion in October 2022. These losses contributed to Meta’s total poor financial performance and provoked a stock sell-off, which caused its shares to fall.
Meta announced the layoffs of 11,000 employees, which is almost 13% of the workforce. Additionally, due to disappointing third-quarter results, Meta’s share price fell by 25%, erasing $80 billion from the firm’s profitability.
Final Thoughts
Zuckerberg’s empire suddenly appears frail after decades of extraordinary expansion. This year, the share price of Meta has decreased by over 70%. Facebook and Instagram are dropping users and market share to new competitors like Snapchat and TikTok. A whopping $100 billion has been spent by Meta on metaverse development and exploration to date, with an additional $15 billion committed in the last year. There doesn’t seem to be anything to show for the company.
Edward Moya, a veteran market analyst at financial services firm Oanda, said, “This business is having problems. Investors will undoubtedly want a leadership shift if the economic outlook worsens faster than people expect.” Zuckerberg’s recent fascination with the metaverse may be interpreted as a proactive virtual rush for what is widely believed to be the internet’s future.
