Facebook invests billions of dollars to develop meta-universe technology as advertising business slows

Facebook Inc said on Monday that it will begin publishing financial data for its virtual and augmented reality divisions; this is when its main advertising business is facing “significant uncertainty.”

Facebook warned that Apple’s new privacy rules will put pressure on its digital business this quarter. Previously, the social media company’s quarterly revenue was lower than market expectations.

Chief Financial Officer David Wehner also said that Facebook expects its investment in the hardware unit Facebook Reality Labs (FRL) to reduce its overall operating profit by approximately $10 billion in 2021.

When the world’s largest social media company invested money to create a “meta universe,” it was being overwhelmed by reports related to leaked documents by former Facebook employee and whistleblower Frances Haugen. She said these documents show that the company puts profits on users. Above safety. Facebook said Haugen misinterpreted its work.

Facebook CEO Mark Zuckerberg said that in the next few years, Facebook will be seen as a meta-universe company, not a social media company, and it has made a number of investments to develop meta-universe technology.

The term “meta universe” comes from a dystopian novel 30 years ago, and is currently causing widespread discussion in Silicon Valley. It generally refers to a shared virtual environment, anyone who uses different devices can enter and visit.

Facebook has made a lot of investments in virtual reality (VR) and augmented reality (AR), including the acquisition of companies such as Oculus, and this year it also created a product team to study the meta universe. Facebook said this month that it plans to hire 10,000 employees in Europe within the next five years to build a meta universe.

Wehner said that starting from the fourth quarter of 2021, the financial report will distinguish FRL from Facebook’s application series and separately disclose the business information of the department.

The company’s stock price rose about 2% in after-hours trading on Monday to $336. So far this year, Facebook’s stock price has risen by about 20%, and its market value is about $85 billion short of returning to the $1 trillion club and par with Tesla Inc.

As the world’s largest social media network, Facebook is being reviewed by global legislative and regulatory authorities, including the US Federal Trade Commission (FTC) has filed an antitrust lawsuit against Facebook, accusing it of anti-competitive behavior.

The whistleblower document first reported by the Wall Street Journal also intensified the scrutiny of the company. These documents include internal research and reports on the impact of Instagram on the mental health of teenagers, research and reports on whether the company’s platform incited division, its handling of the U.S. Capitol riots on January 6, and inconsistencies in global user content reviews. Place.

Reuters reported on Monday that, based on a large amount of information disclosed to the US Securities and Exchange Commission (SEC) and Congress by former employees and Haugen, Facebook employees had warned the company that Facebook had failed to monitor illegal content in countries that could cause the most harm.

Facebook said it expects revenue in the fourth quarter to be between US$31.5 billion and US$34 billion. According to Refinitiv IBES data, analysts estimate revenue is 34.84 billion U.S. dollars or a jump of 24.1%.

Facebook’s third-quarter revenue is also facing the impact of Apple’s privacy regulations, which make it more difficult for brands to target target groups and adjust advertising on Facebook.

The number of daily active users increased by 6% from the same period last year to 1.93 billion, in line with expectations. This indicator is closely watched by advertisers and investors.

The company’s total revenue in the third quarter, which mainly includes advertising sales, rose to 29.01 billion US dollars from 21.47 billion US dollars in the same period last year, which was lower than the 29.57 billion US dollars estimated by analysts.

Facebook said it repurchased $14.37 billion of stock in the third quarter and announced an additional $50 billion of stock repurchase.

The company did not announce any new names as part of the expected rebranding efforts. In response to Verge’s report on its name change plan last week, Facebook responded that it would not comment on “rumors or speculations.”

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