The sharp fall comes after the social media giant reported a rare decline in profit due to a sharp increase in expenses as it invests heavily in its transformation into a virtual reality-based company. “There’s a lot of uncertainty about Meta’s investments in the metaverse and if or when they will have a positive impact on the company’s bottom line,” said Debra Aho Williamson, an analyst with Insider Intelligence.Markets have swung wildly in recent weeks, with buy-the-dip traders sometimes storming in during the final hours of the trading day. This could be spooking investors, who tend to prefer immediate, or at least quick, results on investments. It’s not yet clear if it’ll be the next iteration of human-computer interaction the way Zuckerberg sees it, or just another playground for techies and gamers. He expects people to start seeing Meta as a “metaverse company” in the coming years, rather than a social media company.įor now, though, the metaverse exists only as an amorphous idea envisioned - and named - by the science fiction author Neal Stephenson three decades ago. Zuckerberg is betting that the metaverse will be the next generation of the internet because he thinks it’s going to be a big part of the digital economy. More people are watching video, such as Instagram’s Reels (a TikTok clone), and this makes less money than more established features.ġâHigh ARPU coastal users have churned TikTok is eating their lunchĢâThey can't acquire because of antitrust scrutinyģâThey can't build because founders don't want to be thereĤâIDFA killed their ability to target ads People’s changing online behaviour is also limiting Meta’s money-making abilities. “The metaverse is a long way from being profitable or filling the gap in ad revenue after Apple’s policy change.” “It is time for a reality check on Meta’s position for the metaverse,” said Raj Shah, an analyst at the digital consulting firm Publicis Sapient. Sheryl Sandberg, Meta’s chief operating officer, said in a conference call with analysts that global supply chain issues, labour shortages and earlier-than-usual holiday spending by advertisers put pressure on the company’s advertising sales.Īnother problem: Recent privacy changes by Apple make it harder for companies like Meta to track people for advertising purposes, which also puts pressure on the company’s revenue.įor months now, Meta has been warning investors that its revenue can’t continue to grow at the breakneck pace they are accustomed to. The company also said revenue in the current quarter is likely to come in below market expectations, due in part to growing competition from TikTok and other rival platforms vying for people’s attention.ĬEO Mark Zuckerberg has described Meta as a “virtual environment” in which you can immerse yourself instead of just staring at a screen It expanded its workforce by 23 per cent, ending the year with 71,970 employees, mostly in technical roles. Meta invested more than $US10 billion ($A13.9 billion) in its Reality Labs segment - which includes its virtual reality headsets and augmented reality technology - in 2021, contributing to the quarter’s profit decline. Theoretically, the metaverse would be a place where people can meet, work and play using virtual reality headsets, augmented reality glasses, smartphone apps or other devices.īut building it is not likely to be cheap. Zuckerberg has described it as a “virtual environment” in which you can immerse yourself instead of just staring at a screen. The metaverse is sort of the internet brought to life, or at least rendered in 3D. “However, Meta Platforms’ after-hours earnings report came in below expectations, which has wreaked havoc on today’s session.” “Tech in the US closed ahead, which is generally a good sign for our market,” Mr Tchourilov said. OMG chief executive Ivan Tchourilov said the ASX had a choppy day, bouncing around after an early drop, with the information technology sector slumping a massive 5.88 per cent. The benchmark S & P/ASX200 index dipped 9.7 points or 0.14 per cent to 7078 while the All Ordinaries Index slid 25 points of 0.34 per cent to 7374.6. The Australian sharemarket slid lower yesterday after the tech sector was hammered.
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