A year looking back since Facebook changed its name to Meta: Mark Zuckerberg’s dream is still out of reach

According to CNN, 2021 is a bad year for Facebook when this social network encounters a series of problems, from scandals related to their influence on society or Apple’s change in policy on privacy protection. user privacy to the fact that Tiktok lures young users away from Instagram.

By October 2021, CEO Mark Zuckerberg had to change the company’s name to Meta with a commitment to move into the digital universe, thereby proving to the world that Facebook is not just an ordinary social network.

Then a year has passed with billions of dollars in expenses, but Mark Zuckerberg’s dream of the virtual universe is still out of reach. Currently, Meta is still just a company whose revenue is mainly based on social networks, the difference is that their financial situation is increasingly pressured when burning money for the founder’s dream.

Dream of burning money

CNN reported that Meta’s Quest 2 virtual reality (VR) headset has been out for 2 years and is quite popular in this segment but still only a niche market. The latest product Quest Pro for $ 1,500 has just launched, and is aimed at businesses rather than for the general public. Even Meta’s Horizon Worlds virtual universe is now a ghost city because of so few users.

Despite being a pioneer in this new technology, Mark Zuckerberg’s dream lacks connection with users. Right from the entrance threshold, virtual reality glasses are not common, while many people do not even understand what a virtual universe is.

Meanwhile, Meta’s biggest revenue-generating business is still advertising from social networks, which is facing increasing challenges from Tiktok. The income statement showed that Meta’s second quarter of 2022 revenue fell the second largest in the company’s history, while profits fell by 50% year-on-year.

Although Meta sells more and more ads, profits have decreased, while user growth has also slowed.

After Meta’s total market cap hit $1 trillion for the first time in history in the summer of 2021, they’re now down to just a quarter of that, which is less than the home appliance supplier. Home Depot family.

“Their business won’t grow in 2022. There were expectations that Meta would continue to move forward, but that seems to be a vain hope,” said DADavidson strategist Gil Luria.

According to CNN, Meta’s eloquent statements a year ago are being turned over and become criticism. In the first 9 months of the year, the virtual universe gambling made Meta a loss of $ 9.4 billion and is expected to increase this loss when founder Mark Zuckerberg confirmed that he will continue to invest in his dream.

“People are confused about what Meta’s virtual universe is. If the company only invests 1-2 billion USD per year in the project, there should be no problem. It’s normal to invest in research and development (R&D) but still keep your core business, but the current Meta story is completely different,” said Brad Gerstner, CEO of Altimeter Capital. Meta should limit investment to no more than 5 billion USD/year in virtual universe with clear goals and roadmap.

According to Mr. Gerstner, Meta’s current burn rate for the virtual universe is too large and “terrible” even for a Silicon Valley giant.

Not a smartphone

CEO Mark Zuckerberg previously successfully transformed Facebook’s centralized operating model from personal computers to phones, thereby taking advantage of the world’s advertising trend and dominating this segment for many years afterward. .

But according to CNN, virtual reality glasses are not like smartphones when they have not been tested for attractiveness.

First, although much improved, the market for virtual reality glasses is quite small. A report by research firm ABI Research shows that only 11.1 million virtual reality headsets have been sold so far this year, lower than 14.5 million in 2021 and not even equal to sales of electronic game devices. death.

The potential of virtual reality glasses is great, but many experts like Associate Professor David Lindlbauer of Carnegie Mellon University say that in the near future, the prospect that users will need them like smartphones is impossible.

Reminder Meta is the main sponsor for Mr. Lindlbauer in research and development of interactive software for virtual reality glasses.

Next, CNN said that there is a huge difference between wearing virtual reality glasses and using a smartphone or personal computer. Even Associate Professor Lindlbauer can only predict that users will wear virtual reality glasses for 1 hour a day with today’s technology and still have not hit the weak point that makes people need to use them constantly like smartphones.

Another factor that makes investors suspicious is that the content in the virtual universe is too poor. A recent report by the Wall Street Journal (WSJ) shows that Horizon Worlds has less than 200,000 monthly online accounts out of 3.7 million registered users.

“They think just build a big virtual space like Horizon Wolds and people will come and contribute more. But there has never been a virtual world that has succeeded by creating a space and then letting people come and contribute, all of which requires investment,” emphasized Avi Bar Zeev, founder of Reality Prime.

Up to now, after a year of pouring billions of dollars without the desired results while the main business is neglected, CEO Mark Zuckerberg is facing a series of criticisms as well as the loss of investors. patience.

Although it is known that developing a new technology is difficult, there will be many challenges, but with Meta, many investors expect that they need to stabilize their main source of income before burning money for poor projects. other efficiency.

Source: CNN