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Is there substance behind Facebook’s rebranding as Meta?
Market observers are questioning the motivation behind Facebook’s decision to rebrand as Meta Platforms.
The more cynical commentators have suggested that the rebranding exercise is little more than an attempt to distract the market from increasing regulatory criticism.
Specific accusations relate to ignoring hate speech, sectarian violence and human trafficking. However there are two other compelling reasons for the move.
TAKING BACK CONTROL
First, Facebook, or Meta, wants to take back control by circumventing the influence that other tech leviathans currently have over the company.
Second, Meta is attempting to establish a lead in what Mark Zuckerberg believes will be the next evolution of the internet, the so-called metaverse.
Irrespective of the real motivation behind the name change, there are plenty of obstacles facing Meta’s mission to create an enriched online world.
Mark Zuckerberg, Meta’s founder and chief executive, is understandably haunted by his inability to participate in the smartphone revolution.
This in part, explains his real motivation to create a first mover advantage in the metaverse, a series of interconnected worlds that enable participants to interact with digital objects and avatars.
The plan for Meta is for its own role in the metaverse to encompass all of its platforms including Facebook and Instagram.
The short-term success of this play on augmented and virtual reality or VR is contingent upon the widespread adoption of a new high-end VR headset named Project Cambria, which features cameras that pass high resolution full-colour video to the headset’s screen.
The device is focused on mixed reality applications and will include face and eye tracking. It will be slimmer than existing headsets, and will use sensors and algorithms that help it to reconstruct and augment the world around you.
Meta rolled out two of its metaverse projects last year. The first called Horizon World, enables users to invite friends over into their digital world, by creating a social experience where you can explore and create with others in virtual reality.
Horizon Workrooms is a virtual meeting space where colleagues can work together from anywhere. Users can join a meeting in virtual reality as an avatar, or dial into the virtual room from your computer by video calls.
It also enables participants to bring their computer and keyboard into virtual reality, to work together with others, or just have expressive conversations that feel more like you are together in person. Apps will allow families to play a game together, and could allow an architect to explore a site that is under construction.
In a recent interview with technology newsletter Stratechery.com, Mark Zuckerberg suggested that ‘by the end of this decade, or even by the middle of the next decade, I guess that we are going to reach a point where our virtual reality devices will start to be clearly better for almost every use than our computers and laptops are’.
If successful Zuckerberg will benefit in three ways. First, there will a massive boost in advertising revenue. Currently ads on Facebook and its other social media platforms account for the vast majority of existing income.
Second, considerable revenue could be generated from a vibrant online shopping business. Users will acquire digital items that will move with them as they move to different destinations within the metaverse.
Third, it will eradicate Meta’s current dependence on other large technology providers.
An example of this dependence emerged at Facebook’s third quarter earnings, when it revealed that Apple’s new policy features were creating headwinds.
However there are multiple obstacles that may stymie Zuckerberg’s vision. According to Neil Campling, technology analyst at Mirabaud Securities, the new venture will lose an estimated $7 billion this year, and those losses are expected to increase next year.
Nilay Patel, editor in chief of Verge (a magazine that broke the elusive Facebook scoop and produces gadget and associated technology reviews), shares this sceptical view. ‘Facebook are really focused on Oculus, (virtual reality headset), and alternative reality, he says.
‘But AR is a really hard problem. You have to build a display that doesn’t make you look ridiculous. You have to find a way to power it, you have to put a battery on your body somewhere, you have to find a computer that is fast enough to look at the world around you, and put stuff on top of that that is also small enough to run off the battery. Very challenging.’
Zuckerberg also faces competition from other extremely well resourced technology companies. Microsoft is investing in its own version of the metaverse, with the aim of improving remote meetings.
Online game platform and game creation system company Roblox Corporation, has already launched its own version of the metaverse. This allows gamers to create and host their own game worlds.
And Nvidia, which designs graphic processing units, for the gaming and professional markets is investing in Omniverse. This is an open platform built for virtual collaboration and real time physically accurate simulations.
Meta’s disappointing experience with Oculus (the virtual headset business it acquired in 2014) is indicative of another obstacle it faces. Sales were lacklustre due to the lukewarm adoption of virtual reality by non-gamers.
This resulted in the initial advertising partner for the Oculus headset stepping away, following complaints from users who objected to advertising that detracted from their gaming experience.
Perhaps tellingly the Oculus name will disappear as part of the rebranding.