Opinion : What’s in a name? Facebook by any other name isn’t smelling so sweet.

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The Town Square team takes a look back at one year of Meta, and the take up of the metaverse. What’s in a name? Facebook by any other name isn’t smelling so sweet.

Friday 28 October marked one year since Mark Zuckerberg announced that Facebook would change its name to Meta. The metaverse is the company’s “new north star”, shifting focus from Facebook’s web 2.0 social networking roots and into a new, immersive world. But what is this new world? As Wired put it, “metaverse is the future of the internet. Or it’s a video game. Or maybe it’s a deeply uncomfortable, worse version of Zoom?”. So far, so confusing.

You can’t blame Zuckerberg for evolving. Challenges abound, from privacy issues and fake news to stalling user growth and slowing ad sales – and with ankle-biters stealing the initiative (and the eyeballs), the grandaddy of social networks had to do something to convince investors of a brighter future.

But one year on, what have we seen from Meta, beyond a logo and a promise? The stories coming out of Meta itself are of confusion, disorganisation, and employee apathy. Reports of Meta VP Vishal Shah ordering employees to spend more time using the product, and internal polls showing only 58% of staff claim to understand the metaverse strategy, inspire little confidence. Facebook has 2.85 billion users – that’s active users, not fake or inactive accounts. These people use the app on average 8 times a day. But after 12 months, less than 0.75% of them have used the metaverse.

Moreover, Zuckerberg’s appearance earlier this month at Meta Connect, an event that explores the building of the metaverse and the future of augmented and virtual reality, managed to draw 13,000 attendees at its peak. Yes, that’s virtual attendees. Let’s not even bother with the math on that one.

Not so virtual is the scale of the investment being made to build this new world. Zuckerberg expects the project to make a “significant” loss over the next three to five years – a prediction rapidly coming true as Reality Labs, the division of Meta tasked with walking Zuckerberg’s talk, made an operating loss of US$9.4billion in the first nine months of this year. And the shareholders are in no doubt about whose money is being lost here, with one “open letter strongly encouraging Meta to streamline and focus its path forward” (Brad Gerstner, founder of Altimeter Capital), suggesting that significant loses aren’t acceptable to all.

With almost all of Zuckerberg’s wealth in Meta stock, he’s also losing “significant” amounts too. A month before his Meta announcement he was worth US$142 billion. Twelve months, one name change and a new direction later, his personal future has halved, dropping by US$71 billion.

Not that Meta is alone. Every other major tech company is experiencing the headwinds of this new economic climate. Valuations for Apple (–14%), Amazon (–26%) and Alphabet (–9%) haven’t dropped by 60% yet – that honour belongs to Meta and Netflix – but with hiring freezes and directives to “do more with less”, it’s clear they are all feeling the pinch.

Beyond Facebook and Reality Labs, life is pretty challenging elsewhere within Meta, too. The bet on Reels to address the threat from TikTok has yet to win back the younger audience to Instagram and Facebook. While digital and social advertising didn’t feel the same impact of the pandemic as some mediums, ad revenues are in decline as economic concerns hit most sectors. Apple’s privacy changes have hampered Meta’s efforts to measure advertising effectiveness. Russian authorities have added Meta to a list of terrorist organisations (appealed by Meta, but upheld in a Moscow court). WhatsApp has yet to monetise the product beyond business users. And so, the metaverse matters because it is Meta’s vehicle for changing the narrative.

One year on, how does the story read so far? Today, the metaverse consists mostly of virtual spaces to meet up with friends, play games and attend meetings. For a world that just spent two years locked inside doing just that, how compelling is the opportunity to discover a new online world that does the same thing?

Will the metaverse deliver an experience that really changes people’s lives? Let’s look back at the internet for inspiration. The exclusive domain of pointy-headed geeks for the first 20 years of its existence, the internet got real when more geeks piled in and published the World Wide Web across the internet in 1991. Then, in 1995, came the tipping point: Yahoo was born, Amazon opened for business and Ebay ran its first auction. Suddenly the internet was useful – and for a short time the business to be in was business card printing, as everyone raced to print new ones featuring an email address. Now, the eyeballs were on the internet – and three years later came Google.

By that reckoning, the metaverse needs a little more time in the oven. Like, 25 years more! So today, perhaps we can be forgiven for scratching our heads and confessing that we, like the majority of Meta employees, don’t really understand what the metaverse is all about. But the pace of technology can be fierce and if Meta invests wisely, maybe that timeframe will be shorter. Speed matters, as Microsoft learned in the browser wars, when Google’s Chrome was updated 70 times in its first ten years and Microsoft’s Internet Explorer was updated only four times in the same period, with Microsoft conceding defeat in 2018, declaring that its Edge browser would become a clone of Chrome. But Zuckerberg knows this. After all, he’s credited with the phrase “move fast and break thing”. The question is whether his shareholders are more inclined to see the metaverse “fail fast”, to use another tech industry slogan.

So, let’s wait and see. Let’s keep an eye on the metaverse. Brands with an innovation budget may be ready to dip a toe in the water of this immersive future now. But Meta is some way away from convincing brands to invest in customer engagement through the metaverse, when it’s hardly a viable thing, when shareholders are asking hard questions and when existing revenue streams could do with some serious attention. As our Head of Media put it to me last week, “They are still as difficult to deal with as they were before the rebrand”. So it seems some things never change.