Facebook to invest heavily in metaverse after its ad business slumped

By Akshay Kedari  | Date: 2021-10-27

Facebook to invest heavily in metaverse after its ad business slumped

Facebook recently announced that it is planning to separate its division that is focused on VR/AR hardware into a new segment, coined as the “metaverse”. The recent development comes after concerns over social media giant’s ad business could drop due to Apple’s privacy changes.

Earlier this month, Facebook warned that Apple’s new privacy reforms could weigh on its ad business significantly during this quarter as the social media giant reported below expectations quarterly revenue.

For the record, Facebook reported revenue of USD 29.01 billion in the third quarter, up from USD 21.47 billion the previous year, but falling short of analysts' expectations of USD 29.57 billion.

The revenue was primarily made up of ad sales and it bore the brunt of Apple's new privacy rules, which made it more difficult for brands to target and measure their ads on Facebook.

It appears that this has compelled Facebook to focus on the metaverse by breaking out its hardware division, beginning the fourth quarter of 2021. Although analysts anticipate a 24.1% increase in fourth-quarter revenue, which could value Facebook at USD 24.84 billion, the social media company expects its

According to Facebook Chief Financial Officer David Wehner, the investment in the form of USD 14.37 billion in stock and USD 40 billion in shares in FRL will help in reducing the company’s operating profit to around USD 10 billion in 2021.

The world’s largest social media company is making this huge financial commitment to build a metaverse while facing allegations from former employee Frances Haugen, who claimed that the company prioritized profit over user safety.

Despite this, in volatile extended trading on Monday, the company's shares were up about 2% at USD 336. Facebook, whose stock has gained by about 20% this year, is about $85 billion away from regaining a spot in the USD 1 trillion club which consists of Apple, Tesla, and Microsoft.

Source credit:

https://www.aljazeera.com/economy/2021/10/25/facebook-pours-billions-in-metaverse-as-ad-business-falters

About Author

Akshay Kedari     aeresearch.net

Akshay Kedari

A qualified computer engineering graduate, Akshay Kedari takes pride in having his way with words. Following his passion for content creation, he writes insightful pieces on aeresearch.net and a few other portals. Also endorsed with a short-term experience in web deve...

Read More >>

More News By Akshay Kedari

Bayer sells environmental science biz to Indian firm for $13.5 million

Bayer sells environmental science biz to Indian firm for $13.5 million

By Akshay Kedari

German multinational pharmaceutical and biotechnology company, Bayer CropScience recently stated that its board has given the go-ahead for selling its Environmental Science Business to 2022 ES Discovery India, a private Indian company. The deal wi...

Stockly to raise another $12M to expand its operations & employee base

Stockly to raise another $12M to expand its operations & employee base

By Akshay Kedari

French-based software startup, Stockly is reportedly raising another $12 million (€12 million) in a Series A round from Daphni, Eurazeo, and several other business angels. Apparently, the firm pools together the inventory of several e-commerc...

Alipay+ allies with Asian E-Wallets to boost cashless travel in South Korea

Alipay+ allies with Asian E-Wallets to boost cashless travel in South Korea

By Akshay Kedari

Amidst rising efforts for promoting cashless travel, prominent mobile payment providers in Asia have recently announced an integration of the cross-border digitalized payment solutions from Alipay+ in South Korea. With this move, users of e-wallet...

Seracle, Sumsub partner for offering enhanced KYC protocols and cybersecurity

Seracle, Sumsub partner for offering enhanced KYC protocols and cybersecurity

By Akshay Kedari

Sumsub will assist Seracle in building an innovative blockchain ecosystem Sumsub will offer enhanced security to Seracle at a time when losses due to cryptocurrency thefts have increased by about 60% to $1.9 billion Seracle, a global blockc...

CATL unveils new Module to Bracket tech for heavy-duty electric trucks

CATL unveils new Module to Bracket tech for heavy-duty electric trucks

By Akshay Kedari

CATL, a Chinese battery manufacturer and technology company, has reportedly introduced a new battery technology known as Module to Bracket (MTB) for heavy-duty electric trucks. As per reliable sources, the MTB technology deploys the battery module...