Meta CEO Mark Zuckerberg is hotly defending the company’s massive investment in a virtual reality world called the “Metaverse” despite losing billions in the stock market this year alone on the venture.
Revenue has fallen for a second straight quarter for the parent company of Facebook. Shares tanked sharply on Wednesday, dropping 11.5 percent in after-hours trading.
Investors wanted answers from Zuckerberg, 38, on his decision to dump massive amounts of money into the Metaverse. According to Business Insider, a year after the young billionaire rebranded Facebook as Meta to “bring the Metaverse to life,” his net worth has collapsed from $118 billion to $37 billion.
(Audio Credit: CNET Highlights)
Analyst Brent Thill said during the earnings call that investors are likely feeling as if there are “too many experimental bets versus proven bets on the core” and asked why Meta believes the experimental bets like the Metaverse will pay off, according to CNBC.
“I think it’s going to be fundamentally important for the future,” Zuckerberg asserted. “I get that a lot of people might disagree with this investment. But I think it’s an important thing, and I think it would be a mistake not to invest in this for the future.”
JUST IN – Zuckerberg's Meta stock falls over 10% after-hours as its quarterly profit more than halved. pic.twitter.com/PuhA2YUTiQ
— Disclose.tv (@disclosetv) October 26, 2022
Facebook stock just fell below $100.
Mark Zuckerberg is becoming a cautionary tale about moving onto the next product and forgetting about the one that made you rich. pic.twitter.com/sZ4Sc9jpxp
— Jon Miltimore (@miltimore79) October 27, 2022
He also claimed that it was vital “for the future of our business, and some of the most historic work we are doing.”
“Look – there are a lot of things going on right now in the business and the world,” he commented. “So it’s hard to have a simple: we’ll do this one thing, and it’ll solve everything. I appreciate the patience and I think those that are patient and invest with us will be rewarded. People are going to look back on this decades from now, and talk about some of the work we’re doing.”
“While we face near-term challenges on revenue, the fundamentals are there for a return to stronger revenue growth,” Zuckerberg said in a statement released at the beginning of the earnings call. “We’re approaching 2023 with a focus on prioritization and efficiency that will help us navigate the current environment and emerge an even stronger company.”
Pictured: Zuckerberg has his investors put blindfolds on so he can slip out of the room before they see earnings results pic.twitter.com/rXywAtuTw6
— Eric Zhu (@ericzhu105) October 26, 2022
The company’s share price has dropped almost two-thirds since the beginning of the year, wiping out roughly $650 billion from the company’s market capitalization.
Zuckerberg is calling for patience from investors on new innovations so they have time to produce revenue.
“The reels and discovery engine work is such a big part of what we’re spending our time and energy on,” he pointed out to them. “For reels monetization specifically: any time we added a new format, we had this dynamic that we focused on increasing engagement. But the monetization lagged behind. It’s really hard to answer questions now about the eventual monetization.”
“But what I can say is that with stories, we’re way beyond where we hoped to be. I think we’re going to get there. We’ve gone through a few of these transitions, and they take time,” he remarked. “I get that it takes longer for this to play out than you would want. But I’m pretty confident it’s going in the right direction.”
He also asserted that the Metaverse is far more than just Virtual Reality (VR) headsets. However, the Wall Street Journal is reporting that the company is struggling to meet its goals. One of the biggest complaints other than no one being in the virtual reality world is the lack of legs for avatars. Something that is evidently being addressed.
(Video Credit: CNET Highlights)
Zuckerberg spent $15 billion on a Second Life clone that can't even do legs.
— Eliot Higgins (@EliotHiggins) October 27, 2022
While the Meta CEO announced big things coming for its new virtual reality venture, he failed to explain how the company plans on fixing its “broken” Metaverse which is plagued with bugs, harassment, and privacy concerns.
Problems include reports of women being “virtually raped,” users believing that hackers will steal their virtual identity, and the basic fact that most people don’t understand what the Metaverse actually is.
According to the Daily Mail, Meta has seen its shares fall by over 60 percent this year. Zuckerberg’s intent is to move the company beyond social media but it is quickly becoming a very deep money pit.
The chief executive of VRdirect told the Wall Street Journal that in regards to virtual reality and the Metaverse, “We’re trying to land on the moon, and people are complaining that the coffee machine’s not working.”
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