In context: Mark Zuckerberg has really gone all-in on the metaverse. So convinced is the CEO that virtual, shared worlds are the future of tech, he changed Facebook's corporate name to Meta last year. But what has happened since that rebranding? The company has seen $500 billion wiped off its market value.
New York Mag reports that Meta's half-a-trillion-dollar decline since the rebranding has resulted in a drop from its lofty position as the sixth-largest company in the world by market capitalization to 11th position, replaced by the likes of Nvidia and Tencent.
A lot of Meta's problems don't stem from the new name but are a result of Apple's privacy changes introduced in iOS 14 that allow users to opt out of targeted ads and prevent apps from tracking cross-app behavior. Meta said the change would put a $10 billion dent in its ad revenue this year---an announcement that wiped $232 billion off its market cap in a single day.
Google is introducing similar privacy measures with its Privacy Sandbox for Android, though its implementation isn't as extreme as Apple's, and it won't arrive for at least two years.
Then there's Facebook. The social media platform had an unwelcome sight in its most recent earnings report: the fourth quarter saw its daily user numbers decline for the first time, plunging its share price 20%. Moreover, the AR and VR division (Reality Labs), an important part of its metaverse plans, made a $10.2 billion loss in 2021.
Another problem for Meta is that while many companies are looking to jump onto the metaverse idea, most consumers are apathetic towards what some consider a VR version of Second Life. The metaverse, Web 3.0, and NFTs might excite firms looking to capitalize on them, but the buzzwords leave many people apathetic at best, hostile at worst---a patent hinting at metaverse eye-tracking ad tech certainly hasn't helped.
Meta still has a market cap of $561 billion. It made $33.76 billion in revenue during Q4, up 20% year-on-year, and the overall number of daily active users across all its apps grew slightly, so it certainly isn't in trouble. But maybe the metaverse, at least Meta's interpretation of it, isn't going to be as revolutionary as Zuckerberg thinks.