Mark Zuckerberg wants his staff to know that he hasn’t forgotten how to make money.
The CEO, who has spent most of the past 12 months burning billions of dollars to turn his empire into a metaverse company in the coming years, reversed course slightly this week and said WhatsApp, not an avatar, would likely drive sales growth in the coming years. Comments made to Meta employees during a company-wide meeting reported for the first time by Reuters, a few weeks after a series of collective redundancies affecting 11,000 company employees has rattled workers and investors alike.
Zuckerberg responded to questions from employees, saying business messaging in WhatsApp and Messenger is “probably the next major pillar of our business.” Monetization on these two applications compared to the more mature ones The Facebook and Instagram apps, he said, are still at a relatively early stage. WhatsApp alone is the world by far more used messaging app with a valued 2 billion users in 2020. Although the former owners of WhatsApp would have had a mantra of “No Ads, No Games, and No Gadgets”, Meta spent years playing with ways to slowly to integrate advertising through the platform in the coming years.
At the same time, Zuckerberg appeared to be trying to downplay the massive agricultural investment bet he is making in metaverse products. When asked about company expenses, Zuckerberg reportedly said employees were the largest expense, followed primarily by infrastructure support for his ad family. Oh, and yes, 20% of the company’s spending went to Reality Labs, the segment responsible for overseeing its metaverse ambitions. 40% of Reality Labs’ budget is spent on virtual reality products while another 10% has gone to metaverse-like social platforms, Zuckerberg reportedly said.
Meta did not immediately respond to Gizmodo’s request for comment.
While Zuckerberg isn’t abandoning the metaverse by any stretch of the imagination, recent comments suggest he’s starting to take employee and shareholder criticism of the company’s recent business strategy at least seriously. .
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Meta’s Reality Labs segment has already lost $9.4 billion this year alone. Reality Labs’ revenue was also down almost 50% year-over-year in the third quarter, despite Meta owning the Quest 2, which is easily the world’s number one. Bestsellers consumer VR headset. However, rather than tightening their belts in the face of flimsier VR sales this year, Zuck and his team opted instead to release a glitzy but mostly pointless, eyeball tracking $1,500 mixed reality headsets. And more metaverse-related operating losses are likely around the corner.
“We expect Reality Labs operating losses in 2023 to increase significantly year over year,” Meta said in a statement. statement to CNBC after its third quarter results. “Beyond 2023, we plan to accelerate investments in Reality Labs so that we can achieve our goal of growing the company’s overall operating income over the long term.”
Meta-investors seem increasingly annoyed at the prospect of some long-term bets without certain winnings. In early November, the company’s share price had dropped up more than 72% from January, when Zuckerberg reaffirmed the company’s commitments to the metaverse.
“If any other company had done this, you’d have activist investors writing letters, proposing alternative slates of directors, demanding change,” said Jim Tierney, chief funding officer of AllianceBernstein for American Development. would have Told The Financial Times earlier this year. AllianceBernstein is a shareholder of Meta. “I think Mark understood perfectly what the investors wanted. He made his decision.
But hey, at least metaverse avatars have legs now! Kind of.
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