It's almost as if Meta is not living in our economic reality, like it's living in its own… fantastical metaverse. Too bad it hasn't built one yet.
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Editor's Note: How Much Longer Can Zuckerberg's Metaverse Enthusiasm Last?
Molly Jane Zuckerman writes...
It's a crypto bear market. Inflation is through the roof. Interest rates are on the rise. It's probably a recession, too. And Mark Zuckerberg keeps losing billions and billions of dollars in his metaverse development and then saying "it doesn't matter, we will keep building!"
Meta's latest quarterly report showed a $3.67 billion loss in its metaverse division. That brings up the total lost in metaverse development in 2022 to $9.43 billion. Considering the economic environment that I described above, is Meta getting worried at all about the billions they are losing?
Nope.
Its response in the report is quite simple: "We do anticipate that Reality Labs operating losses in 2023 will grow significantly year-over-year."
Isn't the company lucky it can burn through $10 billion in a year and plan on continuing to lose money next year. It's almost as if Meta is not living in our economic reality, like it's living in its own… fantastical metaverse. Too bad it hasn't built one yet.
Mark's metaverse loses billions 💸
Ouch. Meta just had a very painful set of results. And the headline figure is this: Reality Labs — the tech giant's metaverse division — lost $3.67 billion in just three months. Investors in Facebook's parent company were spooked further when Mark Zuckerberg warned that operating losses are set to rise even further next year. In after hours-trading on Wednesday, Meta's stock price plummeted by 20%. Overall, Meta's earnings came in at $4.4 billion for the period from July to September — and that's down 52% compared with the same period a year ago. All of this comes as the firm — which owns Facebook, Instagram and WhatsApp — grapples with an advertising slowdown as younger consumers flock to TikTok.
'Supersized and terrifying' results 😱
Some investors have said enough is enough — describing Meta's losses as "supersized and terrifying." One shareholder wrote to Zuckerberg — demanding its annual metaverse investment is slashed from $10 billion to $5 billion. Critics fear the tech giant is focusing on "experimental bets" while failing to tackle big challenges its legacy products are facing. In his letter, Altimeter Capital's CEO Brad Gerstner warned "Meta has drifted into the land of excess" — with "too many people, too many ideas and too little urgency." Another analyst declared: "As Facebook, it was a revolutionary company that changed the way people communicate and the way marketers interact with consumers. Today it's no longer that innovative groundbreaker."
Zuckerberg defends his strategy 😤
One year after announcing that Facebook would change its name to Meta, Zuckerberg is standing firm — and last night, he suggested skeptics are being short-sighted. "It would be a mistake for us to not focus on any of these areas that will be fundamentally important to our future," he said. The CEO went on to insist that Meta is doing "leading work" and its cutting-edge products will mature "in different periods of time over the next five to ten years." But critics point to reports that his flagship metaverse Horizon Worlds is on quality lockdown — and say Meta's VR headsets, which cost up to $1,500, are too expensive. "People are not rushing out of their seats to buy a VR headset or even watch 360-degree videos," analyst Paolo Pescatore said.
Elon Musk enters Twitter HQ… with a sink 👀
Elon Musk has posted a surreal video of him entering Twitter with a sink as a crucial deadline for his takeover fast approaches. Both sides have until Friday to finalize the $44 billion deal — which comes after seven months of bitter infighting. If they fail, the matter will go to the Delaware Court of Chancery. Footage showed him strolling into Twitter's San Francisco headquarters with his unusual prop. The 51-year-old has also changed his Twitter bio to "Chief Twit" — and now lists his location as Twitter HQ. We have absolutely no idea why he decided to stroll into the company carrying a sink. But in business circles, "kitchen sinking" is a term used to describe plans to take radical action at a company.
New owner rows back on massive job cuts ↩️
The Washington Post recently reported that Musk was planning to cut 75% of Twitter's workforce — in another blow to morale for staff at the social network. Critics raised fears that this would have a huge impact on security, and make hack attacks and inappropriate content much more likely. In the worst-case scenario, there were also concerns that Twitter may struggle to get back online if systems failed. But according to Bloomberg, Musk does not intend to go through with such drastic layoffs — and denied this number while addressing staff in the office. Twitter's share price closed Wednesday's trading session at $53.35 — less than $1 off the $54.20 per share that Musk had initially offered all the way back in April.
