Technology

Meta: low-quality metaverse picture is needless own goal

Facebook parent company Meta has sunk to the bottom of the 10 most valuable US stocks. It is struggling to reconcile the impact of privacy changes that limit access to data for targeted adverts. Boss Mark Zuckerberg has staked the company’s future on the success of an expensive virtual reality metaverse. Judging by a recent image, it will not pay off for years to come.

The metaverse selfie Zuckerberg uploaded was supposed to herald the launch of the virtual reality platform in France and Spain. Over $27bn has been reported in operating losses for the metaverse project so far. Yet the image looked like it had been knocked up on a home computer in 1995. Zuckerberg responded to criticism with a more realistic, but still cartoonish, avatar.

Investors had better hope sophisticated graphics are in the works. Meta’s ability to expand acquisitions such as WhatsApp and Instagram has yet to translate to success in launching its own projects. See the failed cryptocurrency Diem.

Zuckerberg is doing a poor job communicating his excitement for the metaverse. Market scepticism is high. Since Facebook renamed itself Meta, the share price has halved. The stock is priced at a significant discount to both its own long-term average and the wider market. Meta’s price/earnings ratio is 14. The S&P 500’s is 20.

The share decline is also the result of a slowdown in digital advertising revenue. Forecasts for the current quarter show a second consecutive drop in revenue compared to the previous year.

In a bid to lift sales, Meta is pushing TikTok-like short video advertising and promoting more content to Instagram users from creators they do not follow. The real answer is to slow spending on the Reality Labs division until digital advertising picks up.

Despite privacy changes, Meta remains well placed to benefit when it does. Between Facebook, WhatsApp and Instagram, it has 3.65bn monthly active users. This is equivalent to nearly half the global population. No other social media company comes close.

hello, I am Flora Khan and i work journalist in allnewshouse website i work in other sites like forbes and washington post with 5 years in experience.

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