Meta’s attempt to distract the public from its data collecting ill-reputation with the new name, did not work as intended, the FTX CEO has claimed.
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Facebook's rebranding to Meta, aimed at establishing the company's stronghold in the Web3 sector, completed a year over the weekend on October 28. Sam Bankman-Fried (SBF), the CEO of the FTX crypto exchange grabbed the opportunity to give his insights on Facebook's mega-revamp. The crypto mogul has argued that Meta has seen snags in its growth since the rebranding because the social networking giant “has no more room to grow”. Meta's attempt to distract the public from its data collecting ill-reputation with the new name, did not work as intended, SBF has claimed.
SBF, dissecting Mark Zuckerberg's rebranding decision said that Facebook wanted to churn billions by projecting itself as a ‘vague, unclear, and futuristic enough' space.
As per Meta's earning reports however, it seems that Zuckerberg's alleged plan as detailed by SBF, backfired big time.
“Investors have now decided that spending $10 billion (roughly Rs. 82,429 crore) per year on the metaverse is dumb, and Facebook (er, sorry, Meta)'s stock is tanking. The vague meta guidance is no longer working. And yet Zuck keeps spending,” SBF posted as part of a tweet thread.
The top ten metaverse projects have witnessed an 80 percent downfall in the third quarter of this year. Metaverse trading volume dropped 91.61 percent to $90 million (roughly Rs. 740 crore) in the third quarter of 2023, a report by DappRadar stated earlier this month.
This slump in the metaverse market also had an adverse effect on Meta's revenues.
Between April and June this year, Meta's metaverse section reported losses of a whopping $2.81 billion (roughly Rs. 22,410 crore), Zuckerberg announced in Meta's Q2 earnings call on July 27. This division of Meta is named ‘Facebook Reality Labs' (FRL).
In the second quarter of 2022, Meta's FRL churned $452 million (roughly Rs. 3,604 crore), which was down by 35 percent from the last quarter.
The division's year-to-date losses currently stand at a floundering $5.77 billion (roughly Rs. 46,016 crore).
In fact, last year, the division posted an alerting annual loss of $10.2 billion (roughly Rs. 81,346 crore).
Meta, however, aims to continue its research in the metaverse arena. It recently partnered with digital fashion company DressX to allow its users to purchase and wear digital apparels on avatars across its platforms.
The social networking giant is also looking to launch a "metaverse academy" in France.
As per a Forkast report, the company is projecting overall operating expenses around its metaverse expedition to grow by some 14 percent in 2023.