The name change didn’t help at all, did it? 2021 wasn’t great but was supposed to be better with all the new brand identity and a big bet on Metaverse. But no, Meta had a really tough 2022. Laying off employees, losing billions of dollars, scepticism around Metaverse and then some more. Things aren’t looking good for Mark Zuckerberg and co.

Stock crashes, loss of revenue and more

This won’t make for pretty reading for Meta but here are some numbers for it in 2022. Last year, Meta had a market capitalisation of $1 trillion. Today, it is close to $310 billion. Once upon a time — in not so distant past — Facebook was the fifth biggest company in the world. Currently, it languishes somewhere in the 30s. Quarter after quarter in 2022, Meta posted a decline in profits. More than 11,000 employees were laid off. Mark Zuckerberg’s estimated wealth has evaporated. Last October, the Meta CEO was the third richest person in the world. According to Bloomberg Billionaire Index, Zuckerberg is now 25th and year-on-year has lost close to $81 billion from his net worth. In February 2022, Meta lost $237 billion in the stock market, which made it the biggest valuation drop was seen in the US in a single day. As we said, it doesn’t a pretty picture for Meta.
Why has Meta had it so tough? There are a lot of reasons. The competition from TikTok has also intensified and it seems to be playing catch up on social media — its bread and butter — rather than leading from the front. The number of users on Meta platforms may have not dropped drastically but it’s not what it used to be. Throw in Apple’s iOS privacy measures in the mix and the advertising revenue of Meta has suffered a lot. Meta executives admitted that Apple’s iOS privacy changes have cost the company close to $10 billion.
And then there’s the Metaverse, which has been nothing short of a massive failure so far. Meta Reality labs — the Metaverse division — lost $10 billion in 2022.

The big Metaverse bet hasn’t really paid off

Zuckerberg is convinced that Metaverse will pay off. In a note to employees, he said with reference to Metaverse that the company is “leading in developing the technology to define the future of social connection and the next computing platform.” In 2022, Metaverse showcased Horizon Worlds, which is a VR social space where players can shop, play games and do much more. However, the response to it, according to a report by The Wall Street Journal, was rather lukewarm. The report suggested that by the end of 2022, Meta was hopeful of building monthly active users of 5,00,000. The number was revised to 2,80,000 and the current count was less than that as well. Further, it was reported that Meta’s own employees weren’t too impressed with it and not using it enough. Vishal Shah, vice president, metaverse, Meta, in an internal memo to employees reportedly wrote, “The simple truth is if we don’t love it, how can we expect our users to love it?” he wrote.

High risk, high return?

In a note to the employees, Zuckerberg put on a brave face and made a valid point. “Billions of people use our services to connect, and our communities keep growing. Our core business is among the most profitable ever built with huge potential ahead.” The core business — Meta’s family of apps and advertising — is still doing alright if not at its peak. Advertising revenues have been hit — and the global economic scenario hasn’t helped — but Facebook’s apps and services are still used by over 3.5 billion on a monthly basis. A pivot to the Metaverse hasn’t helped and it is way too early to say — though initial impressions aren’t filling people with optimism — whether it will be a boom or bust. Maybe Zuckerberg’s belief in Metaverse may just turn out to be a stroke of genius. Time — and more importantly money — may just be running out for Meta and Zuckerberg.