Meta’s Mark Zuckerberg said WhatsApp and Messenger would drive the company’s revenue growth — despite the company investing at least $36 billion in the metaverse.
At a company-wide meeting on Thursday, he described the two apps as “very early in the monetization process” compared to the massive cash flow generated by advertising on Facebook and Instagram.
The CEO sought to allay employee fears and answer pointed questions a week after the tech giant laid off 11,000 workers.
“We talk a lot about the very long-term opportunities, like the metaverse, but the reality is that business messaging will likely become the next major pillar of our business as we work to monetize WhatsApp and Messenger,” he said. . to comments heard by Reuters.
Meta’s Mark Zuckerberg said WhatsApp and Messenger would drive the company’s revenue growth — despite the company investing at least $36 billion in the metaverse. Above: Mark Zuckerberg is seen on a leaked video call telling executives he will lay off 11,000 Meta employees
Meta allows some consumers to talk to merchants and transact through its chat apps, including a new feature announced in Brazil on Thursday.
His comments are quite a reversal from his focus over the past year on making huge investments in, and publicly touting, the company’s plans for virtual and augmented reality hardware for the metaverse.
The all-digital world that doesn’t exist yet is envisioned as a place where people can one day shop, live and work by accessing it with AR and VR devices – and Zuckerberg has previously said he wants there to be a billion people spend money on digital goods eventually.
What is the Metaverse?
The ‘metaverse’ is a series of virtual spaces where you can game, work and interact with others who are not in the same physical space as you.
Meta founder Mark Zuckerberg was a leading voice in the concept, which is seen as the future of the internet and would blur the lines between physical and digital.
“You can hang out with friends, work, play, learn, shop, create and more,” Meta said.
“It’s not necessarily about spending more time online — it’s about making the time you spend online more meaningful.”
While leading the charge with the metaverse, Meta explained that it’s not a single product a company can build.
“Like the internet, the metaverse exists whether Facebook is there or not,” it added.
“And it won’t be built overnight. Many of these products will only be fully realized in the next 10-15 years.’
Wall Street has questioned the wisdom of that decision, as Meta’s core advertising business has struggled this year, cutting its stock price in half and leading some critics to call for Zuckerberg to step aside.
In his comments to employees, Zuckerberg downplayed how much the company spent on Reality Labs, the unit responsible for its metaverse investments.
People were Meta’s biggest expense, followed by capital expenditures, the vast majority of which went to infrastructure to support its suite of social media apps, he said. About 20% of Meta’s budget went to Reality Labs.
Within Reality Labs, the unit spent more than half its budget on augmented reality (AR), with smart glasses products continuing to appear “for years to come” and some “really awesome” AR glasses later in the decade, Zuckerberg said.
“This is the most challenging work in some ways … but I also think it’s the most valuable potential part of the job over time,” he said.
Chief Technology Officer Andrew Bosworth, who runs Reality Labs, said AR glasses need to be more useful than mobile phones to appeal to potential customers and meet a higher attractiveness bar.
Bosworth said he was wary of developing “industrial uses” for the devices, describing that as “niche,” and wanted to keep focusing on building for a broad audience.
Meta is still facing a lot of headwinds in the wake of its first-ever large-scale layoffs.
According to documents seen by the Wall Street Journal, Meta is struggling to achieve its goals.
The company planned to reach 500,000 users of its virtual reality platform, Horizon Worlds, by the end of 2022. The number at the time of writing is less than 200,000, still well short of the revised target of 280,000 by the end of 2022.
The documents also show that the majority of those 200,000 users do not return once they enter the system, with many complaining that most areas are devoid of other users.
Those documents also show that since the spring of 2022, the number of users of Horizon Worlds has been decreasing. Less than ten percent of the worlds in the Metaverse receive more than 50 visitors, and the majority of these worlds receive zero visitors.
The disappointing performance comes as Meta struggles with slowing global economic growth, competition from TikTok, privacy changes from Apple, concerns about massive spending on the metaverse, and the ever-present threat of regulation.