Mark Zuckerberg, founder and CEO of Meta Group, has a plan to kick-start the growth of his business. The leader will focus everything on the meta verse and artificial intelligence.
asked by CNBCMark Zuckerberg believes that the meta-verse will allow Meta toreap large profits in the future. The billionaire assures that digital universes in virtual or augmented reality will represent an important part of Meta’s activities during the second half of the decade. That’s why the Facebook group renamed itself Meta last year.
In 2030, Metas CEO expects to find approx. one billion people in the metaverse “. Several studies abound in the same direction as Mark Zuckerberg. According to a report by Gartner, a consulting and research firm, 25% of people will spend at least one hour a day in the metaverse by 2026.
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Metaverset, Meta’s growth driver
Within the meta-verse, internet users will be invited to spend money. Facebook founders predict users will buy “digital goods, digital content or various things to express”. According to him, it could e.g. “clothes for their avatar or various digital goods for their virtual home” or decorative items for “their virtual meeting room”. Meta has also opened a virtual clothing store for avatars.
To pay for and store these digital items, Internet users will have to turn to Meta Pay, the logical development of Facebook Pay. The mobile payment solution will gradually evolve to become the digital wallet of the metaverse you need. This wallet stores both digital currencies and non-fungible tokens (NFTs). To reap profits, Meta intends to demand a fee of 47.5% on every sale of a digital good on its platform. This commission is primarily concerned with content creators, the key element of the metaverse economy.
Mark Zuckerberg seems convinced that the meta-verse will sooner or later revive the growth of his business, which has gradually diminished. During the last quarter, Meta announced a net profit that had fallen by 7.5% compared to the same period in 2021. Despite an annual increase of 7%, the company’s revenue worries investors. What’s worse, Facebook lost users for the first time in the last quarter of 2021.
That’s why Meta has invested colossal sums in the meta-verse, which is considered a growth driver. But despite Zuckerberg’s enthusiasm, the company has been forced to cut costs on the case. Largely in deficit, Reality Labs, the division dedicated to virtual and augmented reality, has canceled several projects in recent weeks. Meta’s connected watch project with two integrated cameras has been abandoned in particular.
“It will take a while to scale to hundreds of millions or even billions of people in the metaverse just because things take a while to get there.”, Zuckerberg admits. A few months ago, the entrepreneur had already warned shareholders: the Reality Labs division will not generate no profit with its products before 2030.
Meta’s short-term solution: copy TikTok
To raise the bar in the near future, Meta intends to invest in artificial intelligence. The Silicon Valley giant plans to copy content recommendation algorithm which made TikTok’s success, the preferred social network for 18-25 year olds.
Meta has also announced its intention to thoroughly review Facebook’s news feed based on the TikTok interface. As Mark Zuckerberg explains, the social network will gradually abandon the system in which “most of the content you see on Facebook and Instagram”. From now on, “More and more of this content will simply come from AI recommendations.” Will this fundamental change allow Facebook to escape obsolescence while waiting for metaverse progress?