Mr. Zuckerberg was defiant on a call with analysts on Wednesday. He said people would “look back decades from now” and “talk about the importance of the work that was done here” regarding the metaverse, virtual reality and augmented reality.
“Look I get that a lot of people might disagree with this investment,” he said. “But from what I can tell, I think this is going to be a very important thing and I think it would be a mistake for us to not focus on any of these areas, which I think are going to be fundamentally important to the future.”
Meta’s financial difficulties stand out because of its size and its position as one of the world’s foremost tech companies. Its woes also reflect a difficult environment that has engulfed other social media companies. Digital advertising has been hurt by global economic jitters as brands reassess their budgets. The companies are also continuing to deal with privacy changes by Apple that have made it harder for them to target their digital advertising.
Meta faces other challenges, including tough regulatory scrutiny. This month, the company said it would sell Giphy, an online repository of animated clips known as GIFs, after British antitrust regulators said Meta’s $315 million deal for the company had reduced competition in social media and digital advertising. Meta’s acquisition of Within, the maker of a virtual reality fitness app, has also been halted by the Federal Trade Commission over antitrust concerns.
It’s unclear how Meta’s metaverse investment will pan out given low user numbers, said Mike Proulx, a research director at Forrester, even as the company cedes young users to rivals like TikTok.
“It truly warrants a conversation around what is Meta’s core business at present,” he said.
Despite the challenges, Meta increased its numbers of users. The number of people who use its apps such as Facebook, Instagram, WhatsApp or Messenger daily increased to 2.93 billion users in the quarter, up 4 percent from a year earlier.