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In context: Mark Zuckerberg has made a significant investment in the metaverse. The CEO is so convinced that virtual, shared worlds are the future of technology that he renamed Facebook Meta last year. But, since that rebranding, what has happened? The company’s market value has been slashed by $500 billion.

Why

According to New York Mag, Meta’s half-trillion-dollar drop since the rebranding has dropped it from sixth to eleventh place in terms of market capitalization, with Nvidia and Tencent taking its place.

Many of Meta’s issues aren’t caused by the new name, but by Apple’s privacy changes in iOS 14, which allow users to opt-out of targeted ads and prevent apps from tracking cross-app behavior. Meta said the change would cost it $10 billion in ad revenue this year, causing its market cap to plummet $232 billion in a single day.

Privacy Sandbox for Android,

Google is introducing similar privacy measures with its Privacy Sandbox for Android, though its implementation isn’t as extreme as Apple’s, and it won’t arrive for at least two years.

Then there’s Facebook.

The social media platform had an unwelcome sight in its most recent earnings report: the fourth quarter saw its daily user numbers decline for the first time, plunging its share price 20%.

Moreover, the AR and VR division (Reality Labs), an important part of its metaverse plans, made a $10.2 billion loss in 2021.

Another problem for Meta is that many companies are looking to jump onto the metaverse idea.

most consumers are apathetic towards what some consider a VR version of Second Life.

The metaverse

The metaverse, Web 3.0, and NFTs might excite firms looking to capitalize on them, but the buzzwords leave many people apathetic at best, hostile at worst—a patent hinting at metaverse eye-tracking ad tech certainly hasn’t helped.

The market capitalization of Meta is still $561 billion.

It made $33.76 billion in revenue in the fourth quarter.

up 20% year over year, and the total number of daily active users across all of its apps increased slightly, so it’s not in trouble.

However, it’s possible that the metaverse, or at least Meta’s interpretation of it, will not be as revolutionary as Zuckerberg believes.


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