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


For years, Meta has tried to turn out to be much less depending on Apple, which holds the important thing to iPhone customers, and to shift away from social networking controversies involving misinformation and hate speech. So in October, Mr. Zuckerberg introduced that he deliberate for his firm to take a brand new path towards the metaverse. He renamed Fb as Meta. Since then, the corporate has launched into a sweeping inner transformation, restructuring itself and pushing staff to affix groups engaged on augmented actuality and digital actuality.

Meta’s spending is unlikely to subside anytime quickly, particularly as it’s in a full-throttled race in opposition to different expertise giants to assert floor within the theoretical metaverse. Final month, when Microsoft mentioned it was shopping for the online game maker Activision Blizzard for almost $70 billion, the software program maker cited the deal as a constructing block for the metaverse, despite the fact that Activision doesn’t produce digital actuality video games. Google has been engaged on metaverse-related expertise for years, and Apple has its personal gadgets within the works.

On the similar time, Meta’s wildly worthwhile companies are in a interval of change. Sheryl Sandberg, Meta’s chief working officer, mentioned on the decision with traders Wednesday that Instagram was closely selling a video product known as Reels, which competes with TikTok. Whereas Reels is the most important contributor to Instagram’s progress, it doesn’t make as a lot cash from advertisements as different Instagram merchandise like Tales and the primary picture feed.

Within the name, Mr. Zuckerberg additionally pointed to the difficulties of competing with TikTok, which has grown more and more well-liked with youthful audiences. David Wehner, Meta’s chief monetary officer, added that Apple’s iOS adjustments buoyed the advert enterprise of Google, which isn’t depending on Apple for promoting knowledge.

Alphabet, Google’s dad or mum firm, on Tuesday reported a 36 % improve in revenue and a 32 % soar in income within the final three months of 2021 from a yr earlier.

Nonetheless, the variety of customers for Meta’s social networking apps continued to rise. The month-to-month energetic customers of Fb, Instagram, WhatsApp and different apps elevated 9 %, to three.59 billion, within the quarter from a yr earlier, the corporate mentioned. The corporate added that a couple of billion customers work together with enterprise accounts utilizing providers resembling WhatsApp and Messenger each week.

But the primary Fb app appeared to hit a ceiling in at the least some markets; the app misplaced a million customers globally for the primary time within the quarter, down from the prior quarter.