- Mark Zuckerberg is doubling down on the metaverse, despite Wall Street’s concerns.
- In the metaverse, Zuckerberg’s company Meta would own the data it collects.
- Zuckerberg wouldn’t have to worry about other companies interfering with his business, like Apple.
Mark Zuckerberg is doubling down on the metaverse — much to Wall Street’s chagrin — because in the metaverse, Zuckerberg has full control.
That’s important for Zuck because unlike in the real world, he won’t have any competition: He’ll own the ‘verse and everything in it. (Compare that to the challenges he’s had facing off against Apple when it tightened up its advertising controls — or squaring up against ByteDance as TikTok puts up big numbers with the Gen Z set.)
It’s a thesis analysts at investment bank Itaú BBA shared with clients earlier this month — and one they’re still sticking to. “The metaverse makes a lot of sense because the data is owned by Meta and it doesn’t need to share it with other parties,” they said.
The only way to access Meta’s metaverse right now is through its Horizon Worlds app on its expensive Quest augmented-reality headsets — not, for instance, on an Apple device.
That could change if Meta eventually ships the product to mobile and web browsers, but those versions have been delayed for now, and Zuckerberg still sees the sense of in-person “presence” you get when experiencing the metaverse in virtual reality as a key selling point to his own gated system.
With Zuckerberg’s approach, the Itaú analysts wrote, Meta would control “all three variables,” — behavioral, transactional, and inventory. In other words, how you act in the metaverse, how you buy things in the metaverse, and even the metaverse itself.
Meta’s shares fell 25% on Thursday after the company reported the day prior that it had burned through $4 billion in the third quarter on the unit charged with building the metaverse. Its stock is down more than 70% so far this year. Since rebranding Facebook to the meta-focused Meta, Zuckerberg’s own net worth has cratered by more than $81 billion, down 68%.
But Zuckerberg, the founder and CEO of the company formerly known as Facebook, defended the billions he’s invested in his passion project on a call with investors this week, all the while detailing plans to reduce the company’s headcount.
Zuckerberg sees the metaverse, a virtual world that he has said is the next stage of the internet, as a long-game investment, admitting on the call that there’s still “a long road ahead to build next computer platform.”
But by defying Wall Street so vehemently and pouring so much money into a passion project, Zuckerberg clearly sees that investment as more than just getting ahead of the competition.
Back to those three variables: Itaú analysts noted that Meta dominates in behavioral data, while Google and Apple dominate in inventory and transactional data, respectively.
Meta, and Zuckerberg, wants to dominate in everything, and it could in its own virtual reality.
Apple in particular has driven much of Zuckerberg’s obsession with the metaverse. Apple changed its iOS rules to allow users to opt out of being tracked across ads, a move that Meta estimated would cost it at least $10 billion in lost ad revenue.
Zuckerberg reiterated the impact on Wednesday’s call, saying there are “big risks and we see issues” regarding Apple’s policy changes.
Itaú wrote in another note on Wednesday, following Meta’s earnings, that it needs to see “less unpredictability of Apple/iOS changes,” among other things, to change its outlook for the company (it also wants to see more visibility for the development of the metaverse).
App tracking is crucial to Meta’s ad business, and in a metaverse accessed primarily through Meta’s hardware, the company wouldn’t have to worry about Apple or other companies interfering in that business.
“You can build new and innovative things when you control more of the stack yourself,” Zuckerberg said Wednesday.
Now, he just needs to convince the public — and his employees — to actually use it.