Zuckerberg Says Facebook’s Future Lies in Virtual ‘Metaverse’
(Bloomberg) -- Mark Zuckerberg doesn’t just want you logging in to his company’s products. He wants you living, working and even exercising inside them.
That’s the very high-level idea behind the “metaverse,” a vision for the future of Facebook Inc. and the entire internet that Zuckerberg started pushing aggressively in the past week.
“In the coming years, I expect people will transition from seeing us primarily as a social media company to seeing us as a metaverse company,” Zuckerberg added. “In many ways the metaverse is the ultimate expression of social technology.”
Think of the metaverse as an immersive virtual world where people can spend time together and hang out, much like you can do today with virtual reality, dialed up to 11. You’ll be able to “teleport” between different experiences, Zuckerberg explained. It’s not a new concept—any number of dystopian sci-fi movies have been predicting this as the future for decades—and while the Facebook CEO has only recently started using the terminology publicly, it’s something Facebook has been building toward for years with investments in virtual and augmented reality.
On Monday, Facebook announced a stand-alone product group internally tasked with building out this vision. Then, the futuristic notion was a central topic of discussion on Facebook’s second-quarter earnings call Wednesday, when Zuckerberg took time to outline his version of the metaverse for analysts and investors. Though he’s talked about it before, he ratcheted up his enthusiasm to a heightened level of zeal, with a clearer focus on the idea of the metaverse as a foregone conclusion for the internet’s next chapter. Facebook executives mentioned the word metaverse more than a dozen times on Wednesday’s call, a term that hasn’t come up on earnings calls in the past.
“The defining quality of the metaverse presence is this feeling that you're really there with another person or in another place,” Zuckerberg said. “Creating avatars and digital objects are going to be central to how we express ourselves.”
Wall Street was skeptical. Evercore analyst Mark Mahaney asked Zuckerberg how much Facebook plans to spend building this metaverse, and others wanted to know when the company might start to see a return on investment and how much control the company expected to have over all the pieces of such a future virtual universe. The answers were vague. Facebook is spending “billions,” said finance chief Dave Wehner, and the social media giant will make money eventually once the metaverse succeeds.
For now, it won’t mean much for Facebook’s current challenges. The company warned of advertising and regulatory headwinds in its quarterly report Wednesday, sending its shares on their biggest intraday slide since May.
On the question of collaboration and interoperability, Zuckerberg said he believes this “virtual environment” will be accessible from all kinds of devices and headsets, including those that aren’t built by Facebook. That means all companies will have the chance to create experiences in this digital world. Still, that assumes all the companies working on virtual worlds have the same thing in mind, and will agree to play nice. Microsoft Corp., for example, also talked about “the enterprise metaverse” for corporate computing on its own conference call with analysts Tuesday. Companies including chipmaker Nvidia Corp. and game makers Roblox Corp. and Epic Games Inc. have all laid out plans for building various iterations of the metaverse.
Zuckerberg sees it as absolutely crucial for Facebook to help pioneer this new version of the internet. The social giant has built a nearly unstoppable advertising and messaging business—but it did so using operating systems and devices created by competitors, like Apple Inc. and Alphabet Inc.’s Google. Because of that model, in some ways Facebook finds itself at a disadvantage: It has to develop its products to adhere to the software constraints its competitors build, which causes problems when, say, Apple decides it wants to crack down on online tracking.
Which is part of why Facebook and Zuckerberg are pushing so aggressively into this new frontier. Zuckerberg says there will be many winners in the metaverse, but the more influential Facebook is in building it, the more this new online universe will reflect Facebook’s existing mission and business model around connecting people.
“We're certainly making a lot of the key investments that we need to make in the foundational technology to be able to deliver the parts that we want to,” he said.
©2021 Bloomberg L.P.