Mark Zuckerberg’s decision to rename Facebook Meta, after the metaverse, could have been a mistake. The company’s new social world is almost empty. A year ago, Mark Zuckerberg changed Facebook’s name to Meta. Even though the Facebook social network had changed the way humans communicate, young people were doing their digital socialising elsewhere.
Facebook was being taken over by the ageing and middle-aged, who used it to post photos of their kids and grandkids, community groups – which used it to share information and police aberrant behaviour – and human rights-busting regimes such as Myanmar, which used it to share information and police aberrant behaviour.
Zuckerberg wanted the company’s identity to reflect a new project: an online social network that looked like a video game. Instead of communicating through writing, or by posting videos, people would move a computer-generated character around a digital world and speak to and interact with other people. Zuckerberg called it the metaverse.
“Over time, I hope we are seen as a metaverse company,” he said
The Wall Street Journal recently sent reporters to Zuckerberg’s metaverse, which is called Horizon Worlds. It was mostly empty:
On a recent night, a female Journal reporter visited one of Horizon’s most popular virtual worlds, the Soapstone Comedy Club. It had about 20 users in it, all appearing as avatars. When the reporter introduced herself and tried to conduct an interview with a small group, one user replied: “You can report on me, baby.” The same user then asked her to expose herself.
One user who was flirting with a woman in the crowd was interrupted by what appeared to be his real-life girlfriend yelling obscenities at him in the background.
The next day, a male Journal reporter visited a “house party” in which he was one of two people in attendance. He and the other avatar jumped into a boxing ring and fought for a round while wearing jack-o-lantern sparring headgear, then played beer pong. The other avatar never spoke and the game ended after about 10 minutes. The reporter’s avatar later fell into the pool and couldn’t figure out how to get out. There was no one around to help.
The list of critics and detractors of Mark Zuckerberg is growing day by day.
There is, of course, the financial community, analysts and investors, who are merciless about Meta Platforms (META) , the entrepreneur’s empire of social networks.
Meta shares are down 62.3% since January, reflecting a fall in market value of nearly $570 billion.
His billionaire peers, Elon Musk and Mark Cuban, mock him. Musk nicknamed him “Zuck the Fourteenth” — an apparent reference to the French king, famous for his hubris and excess, Louis XIV.
Billions of Losses
Zuckerberg’s strategy is what unites all these critics.
The chief executive officer has envisioned metaverse as the future of his company, which includes Facebook, WhatsApp and Instagram. Metaverse is an immersive world in which we will have a parallel life via avatars, using tools such as virtual reality headsets and leveraging advanced technologies like augmented reality.
To quell the last doubts, Zuckerberg changed the name of his company from Facebook to Meta Platforms. He flooded Reality Labs, the division developing this metaverse within Meta Platforms, with billions of dollars.
As of June 30, nearly $16 billion had already been injected into his vision of the future for a mediocre result. Reality Labs recorded a second-quarter operating loss of $2.81 billion. In the first half of 2022, losses amounted to $5.8 billion.
In all of 2021, Reality Labs had a loss of $10.2 billion.
The image quality of metaverse, Horizon Worlds, is reminiscent of outdated technology rather than the future. Investors are starting to lose patience. The media coverage has been negative.
Many are quick to say that the Metaverse is Zuckerberg’s biggest mistake. The billionaire, whose personal fortune has shrunk by more than $77.7 billion since January, continues to plead patience.
But for legendary investor Michael Burry, there should be no doubt: Meta is becoming the New Coke.
Burry is known to have bet, with good reason, on the collapse of the subprime loan market which led to the financial crisis of 2008. He is also one of the few to have predicted the current rout of the markets.
“Seems Meta has a New Coke Problem,” Burry posted on Twitter on Oct. 15.
Is Meta the New Coke?
The investor, who runs hedge fund Scion Asset Management, seems to suggest that Meta is a big mistake made by Zuckerberg. And that it is likely that he will make a big U-turn. Basically, Meta should return to Facebook and what it does best: social media.
New Coke was a much sweeter version of the famous Coca-Cola. This drink was introduced by Coca-Cola in April 1985 during a cola war with Pepsi.
In 1985, Coca-Cola had been losing market share to PepsiCo. Blind taste tests indicated that consumers seemed to prefer the sweeter taste of rival Pepsi-Cola. The company decided therefore to reformulate its recipe.
New Coke was then introduced in April. It left a sour taste in the mouths of loyal Coca-Cola customers. Within weeks of the announcement, the company was receiving 5,000 angry phone calls a day. In June, that number jumped to 8,000 calls a day, a volume that forced the company to hire additional telephone operators. Consumers went so far as to file a complaint against the company to force it to provide the old drink.
The outrage took Coca-Cola executives by surprise.
Seventy-nine days after their initial announcement, Coca-Cola held a press conference on July 11, 1985 to offer a mea culpa and announce the return of the original Coca-Cola classic formula.
So far, Zuckerberg doesn’t seem willing to give up on metaverse. In fact, the company just revealed a new virtual reality headset selling for $1,500. Dubbed the Meta Quest Pro, the headset will be shipped on Oct. 25.
The billionaire also promised new and cheaper headsets.
“I think there’s going to be a consumer device like Quest 2 and Quest 3, the next generation that we’re working on, we’re not releasing it right now,” he said in an interview with Ben Thompson’s Statechery newsletter.
He added, “it’s not this year, but there will be a Quest 3 and that’s in the price range of $300, $400, or $500, that zone.”