On October 28, local time, Facebook CEO Mark Zuckerberg announced at the Facebook Connect conference that Facebook will be renamed "Meta", derived from "Metaverse".
Facebook pulled up during the session and dived in late trading. As of the close, the stock price rose 1.51% to US$316.92, with the latest market value of US$898.616 billion. From the closing high of $382.18 on September 7 so far, Facebook's stock price has fallen by 17%.
In July of this year, Zuckerberg described his vision for Metaverse, hoping to build Facebook into a metaverse company in about five years. Subsequently, Facebook announced the establishment of a team dedicated to the development of Metaverse. Two months later, the company said it will promote Andrew Bosworth, currently head of the company's hardware department, to chief technology officer in 2022.
In the third quarter earnings report released on Monday, the company announced that starting from the fourth quarter, it will spin off Facebook Reality Labs into an independent department. The investment in Facebook Reality Labs for the project will reduce the company’s total operating profit this year by approximately 10 billion U.S. dollars. The project focuses on augmented reality and virtual reality technology. Zuckerberg said, "I estimate that this investment will grow every year in the next few years."
The concept of meta universe comes from science fiction novels such as "Top Player" and "Avalanche". It represents a digital virtual world in which people can use virtual avatars to accomplish things that can be done in the real world, such as watching a concert with friends, or try on clothes in the store. In some visions, they can also 'span', different technology platforms.
Facebook CEO Zuckerberg has become one of the most well-known supporters of Metaverse. Zuckerberg said on Monday's earnings conference call, "In the next ten years, these new platforms will open up a whole new experience, which I have always wanted to create before I created Facebook."
This move is becoming Zuckerberg's core move to serve young adult users. He said that the experience created by Facebook after building the meta-universe should attract and excite this audience.
Facebook said that given its investment in manpower and infrastructure, the company's total spending next year may increase by 27 billion U.S. dollars to reach 97 billion U.S. dollars. It also said that capital expenditures for network infrastructure, data centers, etc. may increase by nearly 80% next year.
Zuckerberg said in an open letter on the 28th that the final return may have a profound impact on the company's future development, including enhancing Facebook's role as a "network market." At present, the company's main source of income is advertising sales. 'If you are in Metaverse every day, you will need virtual clothing, virtual tools, and different virtual experiences. Our goal is to increase the number of Metaverse users to 1 billion and the scale of digital business to reach hundreds of billions of dollar.
Reputation crisis
Behind Facebook's name change is the huge external pressure facing the company.
Just when Facebook was exposed that it was about to change its name, the company ushered in a "three combo" of fines for litigation.
According to the Wall Street Journal, on October 20, local time, U.S. Attorney General Racine for the District of Columbia formally sued Facebook founder Zuckerberg, claiming that he needed to bear personal responsibility in the Cambridge Analytica scandal in 2018.
On the same day, the British Competition and Markets Authority (CMA) announced that it would impose a fine of nearly $7 million on Facebook because Facebook failed to provide the required updated information.
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