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Meta falling, here is why

Mark Zuckerberg was once on his way to becoming the richest person in the world. In September 2023, his net worth reached 142 billion, making him the third richest person on Earth. This man gave birth to the social media industry. Yet today, the Facebook founder has seen his net worth slashed by more than 100 billion, moving him down to 28th place on the Bloomberg Billionaires index. Zuckerberg’s fall reflects that of his company. At one point, Meta was valued at 1 trillion. Today, Facebook’s parent company has lost three quarters of its value. Its market value is now lower than that of Home Depot. On November nine, Meta announced it was laying off 11,000 people or 13% of its workforce. That’s nearly triple the number of employees Elon Musk let go from Twitter the week before. In a message posted to his company’s website, Zuckerberg wrote, “I know this is tough for everyone and I’m especially sorry to those impacted.” Media has burned billions, spending so furiously on its virtual world that predictions are it could eventually cost more than the entire Apollo moon program, which was more than $250 Billion adjusted for inflation. 

 

Zuck said “We believe the metaverse will be the successor to the mobile Internet. We believe in this vision so deeply that we renamed our whole company after it.”  In October 2023. Facebook the company officially changed its name to Meta to reflect a new focus. The metaverse is a vision of the future where people share virtual worlds through virtual reality or augmented reality headsets. zuck said “Quest Pro is the first in our new line of advanced headsets.” 

 

In the same way that everyone has a smartphone today. Zuckerberg is betting they’ll have a headset tomorrow. He’s been intentionally pivoting away from Facebook. Facebook’s own research shows it’s struggling to keep young people interested. Its number of daily active users dropped at the end of 2023 for the first time. And TikTok has been taking away eyeballs for Mehta’s Instagram. While WhatsApp doesn’t run ads, it was already a painful year for Meta before announcing the large-scale layoffs in November. Meta dropped 232 billion in value in one day in February. Zuckerberg blamed it partly on Apple’s privacy changes, which gave iPhone users the choice of whether they’d allow apps like Facebook to monitor their online activity. If people opt out, Facebook receives less user data, which makes targeting ads more difficult, costing the company ad revenue. But what’s really been dragging down MTA’s profit is the ridiculous spending on the metaverse. 
Spending money on the metaverse is absolutely bonkers. Meta spent 10 billion on the metaverse in 2023 alone. That’s ten times what it paid to buy Instagram ten years ago. 

Zuckerberg is committed to a division of media called Reality Labs, which makes VR and AR headsets and software. Reality Labs reportedly has 17,000 employees. That’s four times the size of Twitter’s entire workforce. Like other tech companies, Meadow went on a hiring spree during the pandemic as everyone was locked away at home on their computer. But now, Zuckerberg admits, meta grew too quickly. The global economy has slowed, inflation has soared, and investors are nervous about costs. Facebook has weathered storms before. Even scandals related to privacy and misinformation didn’t hurt its financial performance. But this time it’s different. Although tech stocks have been in a slump, met as problems far outpace both the Nasdaq and the S&P 500. November’s job cuts are the most significant since the company was founded in 2004. A hiring freeze will be extended until March 2023. Employees will lose some perks. They already lost free laundry and dry cleaning earlier in the year. Zuckerberg is asking his employees and investors to trust him and his plan for the metaverse. In fact, he’s made himself the face of his company. For the metaverse. According to the New York Times, some meta employees refer to Metaverse projects as MMH, an acronym for Make Mark Happy. 

But he wasn’t very happy after he posted a selfie in Meadows Virtual Reality Network Horizon Worlds, and the world laughed at him for how ridiculous it looked. People on Twitter were ruthless, comparing Horizon Worlds to something outdated from decades ago. In response to the mocking, Zuckerberg promised the graphics would get a lot better and shared an improved version three days later. But even Meta’s employees are barely using its own Metaverse app. In September, the vice president in charge of Meta’s Metaverse division, Vishal Shah, wrote in an internal message board obtained by The Verge.” The simple truth is, if we don’t love it, how can we expect our users to love it?” He said managers would start tracking employees use of Horizon Worlds. Nearly all of Zuckerberg’s wealth is tied up in media stock, so he’s betting his entire fortune on the success of his vision for the future. During Mehta’s earnings call in October, Zuckerberg defiantly said, “I get that a lot of people might disagree with this investment. I think people are going to look back on decades from now and talk about the importance of the work that was done here.” But for now, as one headline proclaims, its metaverse dream feels as far away as ever. It remains to be seen whether the metaverse will transform our lives. There is another company transforming the shaving industry. 

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