Meta’s Mark Zuckerberg said that WhatsApp and Messenger would drive the company’s sales growth – despite the firm having invested at least $36 billion into the metaverse.
In a companywide meeting Thursday, he described the two apps as being ‘very early in monetizing’ compared to the massive cash flow generated by advertising on Facebook and Instagram
The CEO sought to address employees’ fears and handle pointed questions one 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 is probably going to be the next major pillar of our business as we work to monetize WhatsApp and Messenger more,’ he said, according to remarks heard by Reuters.
Meta’s Mark Zuckerberg said that WhatsApp and Messenger would drive the company’s sales growth – despite the firm having invested at least $36 billion into the metaverse. Above: Mark Zuckerberg is seen on leaked video call telling executives he will lay off 11,000 Meta workers
Meta enables some consumers to speak and transact with merchants through the chat apps, including a new feature announced Thursday in Brazil.
His comments are quite a turnaround from his focus over the last year on making massive investments in, and publicly touting, the company’s plans for virtual and augmented reality hardware for the metaverse.
The all-digital world that does not yet exist is meant to be a place where people can shop, live and work one day by accessing it with AR and VR devices – and Zuckerberg has previously said he wants there to be one billion people spending money on digital goods eventually.
What is the metaverse?
The ‘metaverse’ is a set of virtual spaces where you can game, work and communicate with others who aren’t in the same physical space as you.
Meta founder Mark Zuckerberg has been a leading voice on the concept, which is seen as the future of the internet and would blur the lines between the physical and digital.
‘You’ll be able to hang out with friends, work, play, learn, shop, create and more,’ Meta has said.
‘It’s not necessarily about spending more time online — it’s about making the time you do spend online more meaningful.’
While Meta is leading the charge with the metaverse, it explained that it isn’t a single product one company can build.
‘Just 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, chopping its stock price in half and leading some critics to call for Zuckerberg to step aside.
In his comments to employees, Zuckerberg played down how much the company was spending in Reality Labs, the unit responsible for its metaverse investments.
People were Meta’s biggest expense, followed by capital expenditure, the vast majority of which went to infrastructure to support its suite of social media apps, he said. About 20% of Meta’s budget was going to Reality Labs.
Within Reality Labs, the unit was spending over half of its budget on augmented reality (AR), with smart glasses products continuing to emerge ‘over the next few years’ and some ‘truly great’ AR glasses later in the decade, Zuckerberg said.
‘This is in some ways is the most challenging work … but I also think it’s the most valuable potential part of the work 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 bar for attractiveness.
Bosworth said he was wary of developing ‘industrial applications’ for the devices, describing that as ‘niche,’ and wanted to stay focused on building for a broad audience.
Meta is still facing a lot of headwinds in the wake of its first ever widespread layoffs.
According to documents that were seen by the Wall Street Journal, Meta is struggling to reach its goals.
The company planned to hit 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 below a revised goal of 280,000 by the end of 2022.
The documents also reveal that the majority of those 200,000 users, don’t come back after entering the system once with many complaining most of the areas are bereft of other users.
Those documents also reveal: Since the Spring of 2022, the number of users of Horizon Worlds has been declining. 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 is contending 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.