Facebook Changes Name to Meta to Underline Virtual Reality Change | Social Media News


Facebook Inc. rebrands itself as Meta, decoupling its corporate identity from the eponymous social network mired in toxic content and highlighting a shift to an emerging computing platform focused on virtual reality.

“The metaverse is the next frontier,” CEO Mark Zuckerberg said during a presentation at Facebook’s Connect conference, held virtually Thursday. “From now on, we’re going to be metaverse first, not Facebook first.”

The name change is the most definitive signal yet of the company’s intention to stake its future on a new computing platform – the Metaverse, an idea born in the imaginations of science fiction novelists. In Meta’s vision, people will come together and communicate by entering virtual environments, whether they are talking with colleagues in a boardroom or hanging out with friends in remote corners of the world.

The new name will not affect the way the company uses or shares data, and the structure of the company does not change. The company said its shares will begin trading under a new symbol, MVRS, on December 1.

The former Facebook hopes to transform its social media user base, comprising more than 3 billion people worldwide, into an audience that will embrace immersive digital experiences through devices powered by augmented and virtual reality software, a business already actively pursued by Meta and its rivals.

“Right now, our brand is so closely tied to a product that cannot represent everything we do today,” Zuckerberg said, “let alone in the future.”

Adoption of virtual reality gadgets – like Meta’s Oculus headset – has so far been minimal, and their use mostly relegated to games and other niche apps. While it still takes years to achieve the larger vision of the Metaverse, at Thursday’s event, Meta announced a handful of product updates intended to advance that goal.

Shares of the California-based Menlo Park company, which have risen more than 750% since its IPO in May 2012, rose 3.5% to $ 323.24 at 2:43 p.m. on New York exchanges.

The name change follows Meta’s disclosure on Monday that it will begin reporting financial results for the division known as Reality Labs, which includes the Oculus hardware division, in the next quarter. Meta wants to separate its core digital advertising business from its new investments in augmented reality and virtual reality to allow investors to see the costs and revenues associated with these efforts. The company also announced a $ 10 billion reduction in operating income this year due to investments in Reality Labs.

Meta may have other reasons for changing its corporate identity. Leaning more into the metaverse makes the company feel like it is diversifying its business at a time when it faces new pressures in the social media market. Younger rivals such as TikTok of ByteDance Ltd. are gaining ground among the Under-25 cohort, and Zuckerberg said Monday he is retooling Meta to focus again on attracting young adults.

Building the Metaverse will also allow Meta to reduce its reliance on mobile operating system and browser manufacturers such as Google and Alphabet Inc.’s Apple Inc. to provide services to consumers. Meta’s third-quarter sales and fourth-quarter forecast missed analysts’ estimates in part because of Apple’s new rules for which apps data like Facebook and Instagram can collect from iPhone users. The company seems increasingly aware that it lacks the digital real estate foundations that most users occupy.

“At some point over the next decade there will be a new computing platform,” said Mark Shmulik, analyst at Sanford C. Bernstein. “So their point of view is like when that changes, we want to be – for lack of a better word – the Apple or the Google.”

Yet Meta is a money making machine and has become the sixth most valued company in the world by market capitalization. Revenue is expected to exceed $ 117 billion this year, up from $ 5 billion in 2012, the year Facebook went public. Net income is expected to approach $ 40 billion in 2021. The social network holds about 24% of the estimated $ 200 billion digital advertising market, according to analyst EMarketer Inc., dominating the industry alongside Google, which leads with around 29%.

Meta can also hope that the name change will divert the public conversation from a wave of negative reporting based on documents collected by former product manager-turned-whistleblower Frances Haugen. The documents, dubbed the Facebook Papers, were leaked to the U.S. Securities and Exchange Commission and provided to Congress in redacted form by Haugen’s legal counsel. The company is fighting accusations of misleading investors and the public about its growth in user base, its efforts to tackle hate speech and disinformation, and how the platform has performed. was used to organize the January 6 attack on the United States Capitol.

Zuckerberg has promised that the Metaverse will have privacy standards, parental controls and disclosures over data use that his social network lacks.

“Anyone who builds for the Metaverse should focus on building responsibly from the start,” Zuckerberg said in a video presentation Thursday. “This is one of the lessons I’ve internalized over the past five years: you really want to emphasize these principles from the start. “

Andrew Bosworth, the longtime executive who has overseen Meta’s AR and VR products since 2017, was selected to take the lead in technology in early 2022, a role that includes overseeing the company’s development of the Metaverse.

Realizing the company’s vision of a widely used metaverse will be an uphill battle. For starters, Meta will have significant competition when Apple launches a competing VR device. Facebook was years behind rival Snapchat with its debut last month with Ray-Ban Stories, smart glasses capable of recording audio and video but not yet having AR capability. Zuckerberg said several companies should build and contribute to the metaverse with interoperability in mind.

Meta is also likely to face questions from regulators about how it will protect privacy and deal with the potential for hateful or harassing content in the new digital worlds of the Metaverse. Finally, the construction of the metaverse is going to require a lot of money up front, with no guarantee that the idea will take off.

“That’s a significant amount of capital to invest in a frankly nebulous idea at this point,” Shmulik said. “You have to believe that you will get the right use case that will drive consumer adoption. “

In the past, the social network has sought to put the Facebook footprint at the center of more of its products. At the end of 2019, he tried to make it clear that many of the most popular social apps, like Instagram and WhatsApp, are products owned by Meta, while simultaneously creating a distinction between the company and the flagship app.

Meta isn’t the first tech giant to change brands. Internet search leader Google changed its name to Alphabet in October 2015, seeking to provide a stronger, more accountable corporate structure to oversee its disparate operations, co-founder Larry Page said at the time. . Alphabet has become the holding company of Google, self-driving car developer Waymo, life science affiliate Verily, and others, including a variety of experimental efforts.

Clothing brands have made their own attempts to create new corporate identities. In 2017, leather goods maker Coach Inc., which also owns the Stuart Weitzman and Kate Spade product lines, changed its name to Tapestry Inc. The following year, Michael Kors Holdings Ltd. renamed itself Capri Holdings Ltd. after agreeing to purchase the Versace Brand.

(Updates with comments, details of the event in the fourth paragraph.)
–With help from Andrew Pollack.


Source Link