Tag Archives: Mark Zuckerberg

Meta ‘Year of Efficiency’ call from Zuckerberg was what Street needed

February 2, 2023 Admin Leave a comment

Mark Zuckerberg, chief executive officer of Meta Platforms Inc., center, departs from federal court in San Jose, Calif., on Dec. 20, 2022.

David Paul Morris | Bloomberg | Getty Images

With one simple slogan, Meta CEO Mark Zuckerberg temporarily quelled investor discontent with his company’s multibillion-dollar investment into the futuristic metaverse.

“Our management theme for 2023 is the ‘Year of Efficiency’ and we’re focused on becoming a stronger and more nimble organization,” Zuckerberg said as part of the release of Meta’s fourth-quarter earnings report.

Following a 64% plunge in Meta’s share price in 2022, Wall Street cheered the report, sending the stock up almost 20%, extending a rally that began late last year. Based on after-hours pricing, Meta is trading at its highest since July.

Growth is not what’s getting investors excited. Meta reported better-than-expected revenue in the fourth quarter, but sales still sank 4% from a year earlier, marking the third straight quarterly decline. And the forecast range for the first quarter suggests that year-over-year revenue could increase, but it could also fall again.

Rather, Zuckerberg’s commitment to cost cuts and efficiency is a sign that increasing profitability is important to Meta, which was known as a growth machine prior to last year’s slump.

“The first 18 years I think we grew it 20%, 30% compound or a lot more every year,” Zuckerberg said on the earnings call. “And then obviously that changed very dramatically in 2022, where our revenue was negative for growth, for the first time in the company’s history.”

In looking to the future, Zuckerberg struck a realistic tone.

“We don’t anticipate that that’s going to continue,” he said, regarding the recent drop in revenue. “But I also don’t think it’s going to go back to the way it was before.”

Meta lowered its estimates for total expenses in 2023 to be in the range of $89 billion to $95 billion, down from its prior outlook of $94 billion to $100 billion. In November, the company announced it would lay off over 11,000 workers, or 13% of its staff.

Zuckerberg said Meta will be more “proactive on cutting projects that aren’t performing or may no longer be crucial” and that it will emphasize “removing layers of middle management to make decisions faster.”

Meta is also reducing spending as it builds new data centers that are intended to be more efficient while still able to power the company’s various artificial intelligence technologies. Capital expenditures are now expected to be in the range of $30 billion to $33 billion for 2023 instead of $34 billion to $37 billion.

Zuckerberg is selling investors on a story they want to hear, acknowledging that the company got bloated and needed more financial discipline. One of Zuckerberg’s top deputies, technology chief Andrew “Boz” Bosworth, wrote a personal essay just a few days ago echoing that sentiment.

Still, Meta has plenty of challenges ahead, in terms of both costs and reviving its core ad business.

Meta’s Reality Labs unit, which is responsible for developing the nascent metaverse, lost $13.7 billion in 2022. Finance chief Susan Li told analysts that the company isn’t planning for any reduction in that unit anytime soon. Zuckerberg still sees it as the company’s future.

Digital advertising, meanwhile, is suffering from a struggling economy, and Li gave no indication that companies are planning to dramatically increase their spending in 2023.

Meta has also yet to recover from Apple’s 2021 iOS privacy update that made it harder to target users with ads. Li said the company has been improving its online advertising system, but Apple’s update is “still certainly an absolute headwind to our revenue number.”

During the question and answer part of the call, Zuckerberg was asked about Meta’s progress in generative artificial intelligence, which has become the latest hot thing in Silicon Valley. His answer indicated that Meta is pursuing opportunities there, but will be cautious in how quickly it proceeds. Running these programs is expensive, and Meta needs to ensure it can develop them affordably, he said.

Zuckerberg said that while Meta is researching how best to incorporate the new technology, he wants “to be careful not to get too ahead of the development of it.”

Correction: Meta’s earnings report and CEO Mark Zuckerberg’s comments occurred after the market close on Wednesday. An earlier version misstated the day.

WATCH: Meta grows in daily active users, shares pop on revenue beat

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Technology

Metaverse off to ominous start after VR headset sales shrank in 2022

December 28, 2022 Admin Leave a comment

Meta CEO Mark Zuckerberg demonstrates an Oculus Rift virtual reality (VR) headset and Oculus Touch controllers during the Oculus Connect 3 event in San Jose, California, U.S., on Thursday, Oct. 6, 2016.

David Paul Morris | Bloomberg | Getty Images

Over a year after changing his company’s name to Meta and committing to spend billions of dollars developing the metaverse, Mark Zuckerberg’s bet on virtual reality is no closer to paying off.

Sales of VR headsets in the U.S. this year declined 2% from a year earlier to $1.1 billion as of early December, according to data shared with CNBC by research firm NPD Group. Facebook’s advertising business generates that much revenue about every three days.

With the ad business mired in a slump, Zuckerberg has been looking to VR devices and related technology to pull Meta into the future. But data from analyst firm CCS Insight reveals that worldwide shipments of VR headsets as well as augmented reality devices dropped more than 12% year over year to 9.6 million in 2022.

Taken together, the estimates of VR headset sales and shipments create a problematic picture for Meta, whose stock price has lost about two-thirds of its value this year. Zuckerberg has said he’s playing the long game with the metaverse, expecting it take up to a decade to go mainstream and projecting it will eventually host hundreds of billions of dollars in commerce.

It’s not just Meta. Numerous venture firms and other tech companies have wagered big over the past decade on a futuristic world of virtual work, education, fitness and sports.

Meta’s Quest 2 headset, released in 2020, is by far the leader in the VR market, according to several analysts. Competing devices from companies like Valve, HP and Sony represent a small fraction of the market.

Sales of Meta’s flagship Quest device dropped in 2022, a decline that can be attributed to the device’s big year in 2021, said Ben Arnold, NPD’s consumer electronics analyst.

“VR had an amazing holiday in 2021,” Arnold said, referring to various promotions that helped boost sales of the devices at a time when gaming consoles like Sony’s PlayStation 5 were in short supply. “It was a great time last year to get one of these products, and VR totally crushed it.”

VR headset revenue in the U.S. doubled in 2021 from about $530 million in 2020, according to NPD.

A confluence of factors contributed to lower sales and shipments in 2022.

The Quest 2 has been around for a few years and, like any consumer electronics device, has lost some appeal as it’s aged. And while Meta released a new VR headset in fall, the Quest Pro, that device is geared toward businesses and costs $1,100 more than the Quest 2, pushing it even further out of reach for many VR enthusiasts.

Meta decided over the summer to raise the price of the Quest 2 by $100, citing inflationary pressures.

Leo Gebbie, an analyst at CCS Insight, said in an email that Meta’s price increase was a surprise “given that the company has been willing to sell the headset at such a low margin to try and drive uptake of VR and gain a high market share.”

Meta declined to comment about its VR headset sales or third-party estimates.

All eyes on Apple

Next year is expected to be another “slow year” for the VR market, CCS Insight said in its latest report, citing a weak economy and inflation.

Gebbie said “consumer budgets will be tightening,” and “non-essential purchases like VR headsets are likely to be the casualty of this.”

Sony’s next-generation VR headset will cost $550 when it debuts in February. Arnold said that while the PlayStation VR2 will “give the market kind of a shot in the arm,” it will likely not influence the overall VR market as much as the Quest 2 because Sony’s device requires owners to have a PlayStation 5 as way to power the headset.

Sony PlayStation VR2 headset

Sony

“The total addressable market of the PSVR2 is going to be PlayStation owners,” Arnold said.

A major question for next year remains whether Apple, as long rumored, will unveil a VR headset.

Apple could create a compelling VR headset with an accompanying software ecosystem, Arnold said.

Additionally, Apple’s reputation as a leader in consumer technology could provide a spark to the dim VR market, making the technology more attractive to the general public.

“If one company has the ability to transform the VR market overnight, it’s Apple,” said Gebbie. “With its hugely loyal fanbase, many of whom are comfortable with spending large amounts of money on technology, if Apple was to launch a headset we expect that it would perform very well.”

Apple is reportedly building a VR headset with AR features for a release as soon as 2023.

Eric Abbruzzese, a research director at ABI Research, said Apple could have success launching a VR headset geared toward businesses, which would likely help lure developers to the community. But the high price of an enterprise VR headset, which would likely retail for several thousand dollars, would still make it difficult for Apple to move the needle, Abbruzzese said.

“It probably won’t even ship 5 million units in its first year,” Abbruzzese said of an Apple enterprise VR headset. “But it is the first notable product from a huge tech incumbent.”

Apple didn’t respond to a request for comment.

One major thing the VR world lacks is a breakout hit, or a killer app.

Some games have gotten traction, like the musical rhythm game Beat Saber and VR versions of popular titles like Resident Evil, Abbruzzese said. And some users are showing more interest in using VR for fitness activities.

But in the console market, blockbuster games like FIFA and Call of Duty are “shipping hundreds of millions of products,” he said.

Meanwhile Meta’s Horizon Worlds social VR platform is still in its experimental phase.

“The only metaverse product really is Horizon and it’s not good right now,” Abbruzzese said.

WATCH: Meta has a tremendous future if it can just stop making mistakes

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Business

Cramer on hot industrial stocks, and how we’re playing the tech pivot

December 5, 2022 Admin Leave a comment

The market is so possessed by tech that it can’t see the forest through the industrials. If the discourse isn’t about the slowdown in the cloud, it’s about who is pulling out of the now-private Twitter, or how disappointing it is that co-CEO Bret Taylor left Salesforce (CRM). Meta Platforms ‘ (META) Mark Zuckerberg could sneeze and Amazon (AMZN) CEO) Andy Jassy cough and it’s a bigger deal than United Airlines ‘ (UAL) order for 100 Dreamliners from Boeing (BA). We don’t pay much attention to the industrials anymore. There aren’t that many of them. We are used to them being hostage to so many forces of negativity that they just aren’t worth our focus. That’s wrong. The Dow Jones Industrial Average has done so much better than the average semiconductor company, or even the above-average enterprise software company that it’s insane that we even focus on some of the latter. The 600 companies formed in the last two years rent too much of your brain space even in passing. Advertising, which turned out to be the Achilles heel of everything internet and media, just seems to have vanished. There’s not enough of it to feed the mouths of all of the players and nobody seems to be able to reach the 18- to 24-year-olds with whatever they spend. So they are shelling out a fraction of what they used to spend. It’s so bad that we cheer when a semiconductor company like Marvell Technology (MRVL), guides down and it only edges the stock down slightly. That gives the market hope that some of the inventory glut for chips is near its end. In the meantime, the unheralded industrials gap up on any S & P 500 run, where there never seems enough stock ahead to where you find sellers. I will go into the ones that intrigue — but first, let me just say that the biggest problem with so many of these techs is that there is so much supply at every level. Someone is always a seller. There’s always merchandise up a penny. And it is sizable. The orders, if you could hear them would be something like, “sell 50,000 shares every five cents thereabout for the next dollar and then I will reload when I get my report if there is enough time left at the end of the day. I don’t want to hurt the stock too much because I have so much behind it.” There is endless selling in anything related to the cloud and it isn’t just from the price target reductions. It is from insiders who sense that the era is over and they all compete with each other now, even Amazon, Alphabet (GOOGL) and Meta get that. When the biggest issue with Meta is how much time is Zuckerberg really working on his alleged metaverse pipedream, instead of the highly profitable but slow-growing Instagram, you know you are way too deep in the weeds. Now I want you to hit up the stock of Caterpillar (CAT). When you are in the deep stages of a Federal Reserve interest rate tightening I would normally say that this may be the single best short in the book. Shorting a stock means betting it will go down. But not this time. There is no way CAT can meet its orders. Every industry needs more of what they make, whether it be coal because Europe has taken so many nuclear plants offline and natural gas has risen so much in price, or earthmovers needed for all the roads that are about to be built in this country because of the Democrat’s infrastructure bill, which favors domestic product. Meanwhile, its raw costs are going LOWER. Caterpillar de-emphasized China and emphasized oil and gas. While the public companies have cut back the pace of drilling, the private equity companies are drilling like mad to cover cash flow. Take a look at how CAT acts on up days. There is none for sale. None. A decent day and it always seems like Caterpillar’s stock has rallied three points. Why not; there are 527 million shares outstanding, down 20 million shares. What enterprise software company can say that? There are no stock base compensation issues. Stock is precious. CAT sells at 17 times REAL earnings, not FAKE or MADE UP earnings. That’s what we really should call the shameless non-GAAP adjusted earnings-per-share nonsense we get from these West coasters, which seems a lot like what General Electric (GE) was doing before its collapse. I bet an order to buy 100,000 shares of Caterpillar moves it 2 points. In a year when the S & P 500 dropped 14%, CAT has gained 14% year to date. Not to mention it has an annual dividend yield of 2%. Last week, I met with Emerson Electric (EMR) CEO Lal Karsanbhai. He’s turning this old-line but excellent valve and home appliance maker into a company that digitizes your hardware, that automates your plants while cutting out waste. In less than two years, Karsanbhai has sold slow-growing divisions, bought faster-growing businesses, and joint-ventured others in ways that the arrogant software types can only dream of doing. Like Caterpillar’s stock, EMR is straight up: 4% higher year-to-date. But in the past three months, shares are up 18.5%. I think the idea of bringing in an Emerson to innovate, automate and become cleaner — it also has a huge business in environmental improvement — is one of the first calls I would make if I ran an industrial. It’s an 18 times earnings stock. Anything that happens to Boeing, I am always bittersweet about. We sold some high, we sold some low, but most importantly we were just annoyed by its constant errors. We wanted to play aerospace, though, with so much travel, so we did it with Honeywell (HON). Here’s another story that just never stops ceases to amaze. Another reconfigured company with chemicals that clean the refining process, machines that automate factories, climate controls, and some of the most important parts of an airplane including the cockpit, for not just Boeing but Airbus. Honeywell stock sells at 25 times earnings but its growth is accelerating and it has cash and a balance sheet that is ready to be put to work for anything needed. HON is another one that’s up 5% year to date and more than 17% in the past three months. We know that we have gone through arsenals of low-tech military equipment as has NATO. But this big appropriation boost last week is going to give Raytheon Technologies (RTX) orders it needs to raise numbers for 2023. The anti-missile products that Raytheon specializes in are what I think are now headed to NATO members to do what they want with them, which means take them to Ukraine to defend against the now-nine-month invasion by Russia. Meanwhile, Raytheon’s aerospace, both military and commercial, have too many orders to handle. After some re-configuring as part of the merger between United Technologies and Raytheon, the buyback is in place. The only thing holding this company back is a lack of engineers. Can the people out West learn military engineering? They better learn to do so. RTX is up 17% year to date. I could include so many companies like these, Eaton Corporation (ETN) for pumps, valves and what you need for electrical vehicle charging; Illinois Tool Works (ITW) for equipment like welding, the growth portion of autos, and polymers, and all sorts of in high demand products; or Agilent Technologies (A), a test and measurement company for all sorts of industries that require precision and pinpoint accuracy. You can’t just own these. You won’t know when they stop going straight up. And you can’t just buy them. Jeff Marks, portfolio director for the Investing Club, and I went at it last week when I said that we have to, just have to own Emerson as fast as we can. But one look at the stock tells us that it’s just gone too far too fast. The thing is, they all have. I say let’s take a serious break from the software companies that were claimed to have eaten everything else for breakfast and start discussing the real winners since the November pivot — the companies that were supposed to collapse that, instead, have reinvented themselves and are part of the new industrial economy that’s been automated and digitized and doesn’t need customer relations management because it has too many customers. (Jim Cramer’s Charitable Trust is long CRM, META, AMZN, GOOGL and HON. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

Jim Cramer at the NYSE, June 30, 2022.

Virginia Sherwood | CNBC

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Business

Elon Musk’s Wealth Drops by $8.6 Billion in One Day

November 22, 2022 Admin Leave a comment

Photo: Win McNamee (Getty Images)

Tesla, SpaceX, and Twitter CEO Elon Musk saw his wealth plummet by $100 billion dollars this year, bringing his net worth to somewhere between $170 billion and $182 billion, according to estimates from Bloomberg and Forbes. That’s down from an estimated $340 billion in November 2021. The drop comes as Tesla shares decreased to a two-year low this week, reducing Musk’s wealth by about $8.6 billion in just one day.

Musk reportedly owns around a 15 percent stake in Tesla shares which has decreased by 58.03% year to date, according to Bloomberg. He sold nearly $15.5 billion of his Tesla stock to finance his purchase of Twitter earlier this month.

Tesla accounts for the bulk of Musk’s fortune but has faced revenue decreases due to the ongoing covid-19 restrictions in China and a recent recall of 300,000 Tesla vehicles due to faulty taillights in addition to soaring costs of materials. His net worth continued to take a hit after he acquired Twitter for $44 billion—the largest buyout of a technology company in history.

Musk also had to recently defend the near $56 billion payment package Tesla handed him years ago in court. Richard Tornetta, who owns some Tesla shares, filed the lawsuit back in 2019 claiming the Tesla board offered Musk an overly generous pay package even though he was spending only about half his time at the electric car maker. His new hobby as ‘Chief Twit’ has only amplified claims that he’s spreading himself too thin.

Despite the setbacks, Musk still remains the wealthiest person in the world, coming in above the runner-up, Bernard Arnault, by around $65 billion. Musk is not the only tech executive whose net worth has dropped this year, as Meta CEO Mark Zuckerberg, Amazon founder Jeff Bezos’, and Alphabet co-founder Larry Page have all also experienced significant financial setbacks according to Bloomberg.

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Business

Meta to lay off 11,000 employees, as Zuckerberg says he is ‘accountable for missteps’

November 9, 2022 Admin Leave a comment

New York
CNN Business
—

Facebook parent company Meta on Wednesday said it is laying off 11,000 employees, marking the most significant job cuts in the tech giant’s history.

The job cuts come as Meta confronts a range of challenges to its core business and makes an uncertain and costly bet on pivoting to the metaverse. It also comes amid a spate of layoffs at other tech firms in recent months as the high-flying sector reacts to high inflation, rising interest rates and fears of a looming recession.

“Today I’m sharing some of the most difficult changes we’ve made in Meta’s history,” CEO Mark Zuckerberg wrote in a blog post to employees. “I’ve decided to reduce the size of our team by about 13% and let more than 11,000 of our talented employees go.”

The job cuts will impact many corners of the company, but Meta’s recruiting team will be hit particularly hard as “we’re planning to hire fewer people next year,” Zuckerberg said in the post. He added that a hiring freeze would be extended until the first quarter, with few exceptions.

In September, Meta had a headcount of more than 87,000, per a September SEC filing.

Meta’s core ad sales business has been hit by privacy changes implemented by Apple, advertisers tightening budgets and heightened competition from newer rivals like TikTok. Meanwhile, Meta has been spending billions to build a future version of the internet, dubbed the metaverse, that likely remains years away from widespread acceptance.

Last month, the company posted its second quarterly revenue decline and said that its profit was cut in half from the prior year. Once valued at more than $1 trillion last year, Meta’s market value has since plunged to around $250 billion.

“I want to take accountability for these decisions and for how we got here,” Zuckerberg wrote in his post Wednesday. “I know this is tough for everyone, and I’m especially sorry to those impacted.”

Meta is not alone in feeling the pain of a market downturn. The tech sector has been facing a dizzying reality check as inflation, rising interest rates and more macroeconomic headwinds have led to a stunning shift in spending for an industry that only grew more dominant as consumers shifted more of their lives online during the pandemic.

“At the start of Covid, the world rapidly moved online and the surge of e-commerce led to outsized revenue growth,” Zuckerberg wrote Wednesday. “Many people predicted this would be a permanent acceleration that would continue even after the pandemic ended. I did too, so I made the decision to significantly increase our investments. Unfortunately, this did not play out the way I expected.”

“I got this wrong, and I take responsibility for that,” he added.

Meta’s headcount in September was nearly twice the 48,268 staffers it had at the start of the pandemic in March of 2020.

A handful of tech companies have announced hiring freezes or job cuts in recent months, often after having seen rapid growth during the pandemic. Last week, rideshare company Lyft said it was axing 13% of employees, and payment-processing firm Stripe said it was cutting 14% of its staff. The same day, e-commerce giant Amazon said it was implementing a pause on corporate hiring.

Also last week, Facebook-rival Twitter announced mass layoffs impacting roles across the company as its new owner, Elon Musk, took the helm.

In addition to the layoffs, Zuckerberg said the company expects to “roll out more cost-cutting changes” in the coming months. Meta, which like other tech giants is known for its vast, perk-filled offices, is rethinking its real estate needs, he said, and “transitioning to desk sharing for people who already spend most of their time outside the office.”

“Overall,” he said, “this will add up to a meaningful cultural shift in how we operate.”

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Business

Meta’s Mark Zuckerberg Says He Is Accountable as Company Preps for Mass Layoffs

November 8, 2022 Admin Leave a comment

Facebook Parent Meta Is Preparing to Notify Employees of Large-Scale Layoffs This Week

November 6, 2022 Admin Leave a comment

Meta Platforms Inc.

META 2.11%

is planning to begin large-scale layoffs this week, according to people familiar with the matter, in what could be among the largest round in a recent spate of tech job cuts after the industry’s rapid growth during the pandemic.

The layoffs are expected to affect many thousands of employees and an announcement is planned to come as soon as Wednesday, according to the people. Meta reported more than 87,000 employees at the end of September. Company officials already told employees to cancel nonessential travel beginning this week, the people said.

The planned layoffs would be the first broad head-count reductions to occur in the company’s 18-year history. While smaller on a percentage basis than the cuts at Twitter Inc. this past week, which hit about half of that company’s staff, the number of Meta employees expected to lose their jobs could be the largest to date at a major technology corporation in a year that has seen a tech industry retrenchment.

CEO Mark Zuckerberg has said recently that ‘some teams will grow meaningfully, but most other teams will stay flat or shrink over the next year.’

Photo:

Michael Nagle/Bloomberg News

A spokesman for Meta declined to comment, referring to Chief Executive

Mark Zuckerberg’s

recent statement that the company would “focus our investments on a small number of high priority growth areas.”

“So that means some teams will grow meaningfully, but most other teams will stay flat or shrink over the next year,” he said on the company’s third-quarter earnings call on Oct. 26. “In aggregate, we expect to end 2023 as either roughly the same size, or even a slightly smaller organization than we are today.”

The Wall Street Journal reported in September that Meta was planning to cut expenses by at least 10% in the coming months, in part through staff reductions.

The cuts expected to be announced this week follow several months of more targeted staffing reductions in which employees were managed out or saw their roles eliminated.

“Realistically, there are probably a bunch of people at the company who shouldn’t be here,” Mr. Zuckerberg told employees at a companywide meeting at the end of June.

Meta, like other tech giants, went on a hiring spree during the pandemic as life and business shifted more online. It added more than 27,000 employees in 2020 and 2021, and added an additional 15,344 in the first nine months of this year—about a fourth of that in the most recent quarter.

Meta’s stock has fallen by more than 70% this year. The company has highlighted deteriorating macroeconomic trends, but investors have also been spooked by its high spending and threats to the company’s core social-media business. Growth for that business in many markets has stalled amid stiff competition from TikTok, and

Apple Inc.’s

requirement that users opt-in to the tracking of their devices has curtailed the ability of social-media platforms to target ads.

Last month, investment firm Altimeter Capital said in an open letter to Mr. Zuckerberg that Meta should slash staff and pare back its metaverse ambitions, reflecting the rising discontent among shareholders.

Meta’s expenses have also risen sharply, causing its free cash flow to decline by 98% in the most recent quarter. Some of the company’s spending stems from heavy investments in the additional computing power and artificial intelligence needed to further develop Reels, Meta’s TikTok-like short-form video platform on Instagram, and to target ads with less data.

But much of Meta’s ballooning costs stem from Mr. Zuckerberg’s commitment to Reality Labs, a division of the company responsible for both virtual and augmented reality headsets as well as the creation of the metaverse. Mr. Zuckerberg has billed the metaverse as a constellation of interlocking virtual worlds in which people will eventually work, play, live and shop.

Meta has invested heavily in promoting its virtual-reality platform, but users have been largely unimpressed.

Photo:

Guillermo Gutierrez/Zuma Press

The effort has cost the company $15 billion since the beginning of last year. But despite investing heavily in promoting its virtual-reality platform, Horizon Worlds, users have been largely unimpressed. Last month, the Journal reported that visitors to Horizon Worlds had fallen over the course of the year to well under 200,000 users, about the size of Sioux Falls.

“I get that a lot of people might disagree with this investment,” Mr. Zuckerberg told analysts on the company’s earnings call last month before reaffirming his commitment. “I think people are going to look back on decades from now and talk about the importance of the work that was done here.”

Following the call, analysts downgraded their rating of Meta’s stock and slashed price targets.

“Management’s road map & justification for this strategy continue to not resonate with investors,” analysts at RBC Capital Markets said in a note last month.

Write to Jeff Horwitz at jeff.horwitz@wsj.com and Salvador Rodriguez at salvador.rodriguez@wsj.com

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Business

Meta Horizon Worlds metaverse losing users, falling short of goals: Report

October 15, 2022 Admin Leave a comment

Horizon Worlds, Meta‘s flagship metaverse for consumers, is failing to meet internal performance expectations, according to The Wall Street Journal, which reviewed internal company documents.

Meta initially aimed to reach 500,000 monthly active users in Horizon Worlds by the end of the year, but the current figure is less than 200,000, according to the report. Additionally, the documents showed that most users didn’t return to Horizon after the first month on the platform, and the number of users has steadily declined since spring, the Journal said.

Only 9% of worlds are visited by at least 50 people, and most are never visited at all, according to the report.

The report comes as the company’s stock falls, user numbers decline and advertisers cut spending. Meta shares are down 62% so far this year.

Meta rebranded from Facebook last year in order to reflect the company’s ambitions beyond social media. CEO Mark Zuckerberg has specifically been interested in building out the metaverse, which is a virtual world that allows users to work and play together.

As a result, Meta created Horizon Worlds, which is a network of virtual spaces where users can engage with one another as avatars. Individuals can access Horizon through Meta’s Quest virtual-reality headsets.

In an effort to drum up some excitement around the metaverse, Zuckerberg unveiled his company’s newest virtual reality headset, dubbed the Meta Quest Pro, at Meta’s Connect conference Tuesday. The device costs $1,500 and contains new technologies, such as an advanced mobile Snapdragon computer chip.

A Meta spokesman told The Wall Street Journal that the company continues to make improvements to the metaverse, which was always meant to be a multiyear project. Representatives for Meta didn’t immediately respond to CNBC’s request for comment.

Meta has said it will release a web version of Horizon for mobile devices and computers this year, but the spokesman didn’t have any launch dates to disclose.

Read the full Journal report here.

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Technology

Meta’s Virtual Reality Legs Video Was A Lie, Used Some Mocap

October 13, 2022 Admin Leave a comment

Earlier this week Meta CEO Mark Zuckerberg took to the stage to demonstrate that, having spent billions of dollars to create a virtual reality universe (Horizon Worlds) that looked like it was from 2004, his company was working on improving that universe to make it look like it was from 2009 instead. Integral to this upgrade was the fact that avatars would no longer be mere floating torsos, but would soon have legs.

It was a very weird video existing in a very weird space, as Ethan wrote at the time:

Today’s model is clearly an extension of that early rendering, and finally brings the VR platform past the likes of Fire Emblem: Awakening on the Nintendo 3DS, another game that lacked legs. And that was with Meta only spending $10 billion this year on the technology. Who knows what another small fortune will bring? If anything can catapult the Oculus storefront into the green, it’s a burgeoning market for VR feet pics. It might seem like we’re being ridiculous here, but do know that the live chat alongside the virtual audience watching all of this unfold absolutely exploded when Zuckerberg started talking about feet.

While the updates expecting to bring full-body avatars aren’t expected until 2023, Zuckerberg was clearly seen jumping around in the video, giving everyone an early look at the tech. Or was he?

Anyone who has ever been around *checks the culture* any piece of marketing ever made should know by now that not everything is as it seems when a company is trying to sell you something. And in this case, the video Meta showed off was made with some help.

As UploadVR’s Ian Hamilton has since reported, Meta has issued a follow-up statement, which says “To enable this preview of what’s to come, the segment featured animations created from motion capture.”

Deep down, of course, you all knew this. From vertical slices at E3 to photo tricks shown at Apple events, there are always grains of salt we need to chew on every time a company trying to sell us something that isn’t out yet.

But there’s something especially funny about this in particular, that a project that has spent billions of dollars to look like a Kinect demo—a piece of hardware first shown off in 2009—has ended up with its own dumb feet-related moment.

Who knows, maybe when it’s eventually released the tech will looks exactly like this! Maybe it won’t. Maybe none of us will ever actually use Horizon Worlds and it will remain a mystery forever.

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Kanye West Instagram Tirade Is Ugly Storm of Antisemitic Filth

October 10, 2022 Admin Leave a comment

A week that began with Kanye West sporting the phrase White Lives Matter on a shirt and included his appearing on Tucker Carlson’s fanatically far-right show has ended with the rapper spewing antisemitic filth on Twitter. Late Saturday, after Instagram imposed restrictions on his account for previous posts that were alleged to be antisemitic, West leaned into hate, writing on a since-removed Twitter post, “I’m a bit sleepy tonight but when I wake up I’m going death [sic] con 3 On JEWISH PEOPLE The funny thing is I actually can’t be Anti Semitic because black people are actually Jew also You guys have toyed with me and tried to black ball anyone whoever opposes your agenda.” (The platform later locked his Twitter account.) The rapper’s turn from performance-art conservative to actual bigot comes after years in which he has been open about mental-health problems. But suffice it to say erupting in a steady stream of anti-Jewish bile is not a condition identified in the latest edition of the The Diagnostic and Statistical Manual of Mental Disorders (DSM).

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Kanye West Instagram Tirade Is Ugly Storm of Antisemitic Filth

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