Meta Spent $10 billion on the Metaverse in 2021, Dragging Down Profit

Over the years, Meta has sought to become less dependent on Apple, which holds the key for iPhone users, and to avoid social networking controversies involving misinformation and hate speech. So in October Mr. Zuckerberg announced that he plans to pursue a new path for Metawors for his company. He changed the name of Facebook to Meta. Since then, the company has embarked on a sweeping internal transformation, restructuring itself and forcing employees to join teams working on augmented reality and virtual reality.

The cost of meta is unlikely to drop anytime soon, especially since it is in a full-throttle race against other technology giants to claim land in theoretical metavars. Last month, when Microsoft said it was buying video game maker Activision Blizzard for about 70 billion, the software maker cited the deal as a building block for Metavers, although Activision does not produce virtual reality games. Google has been working on metavers-related technology for years, and Apple has its own devices.

At the same time, Meta’s wildly profitable businesses are in a period of transformation. Sheryl Sandberg, Matana’s chief operating officer, said in a call with investors on Wednesday that Instagram is heavily promoting a video product called Reels, which competes with TikTok. Reels is one of the biggest contributors to Instagram’s growth;

In the call, Mr. Zuckerberg also pointed out the difficulties of competing with TikTok, which has become increasingly popular among young audiences. David Wehner, chief financial officer of Meta, added that Apple’s iOS changes have boosted Google’s advertising business, which does not rely on Apple for advertising data.

Alphabet, Google’s parent company, on Tuesday reported a 36 percent increase in profits and a 32 percent increase in revenue in the last three months of 2021 compared to a year earlier.

Nevertheless, the number of users for Metani’s social networking applications continued to grow. Monthly active users of Facebook, Instagram, WhatsApp and other apps rose 3.5 percent to 3.59 billion in the year-ago quarter, the company said. The company added that every week more than one billion users interact with business accounts using services such as WhatsApp and Messenger.

Yet the main Facebook app appears to be hitting the ceiling in at least some markets; The app lost 1 million users globally for the first time in a quarter, down from the previous quarter.

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