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With Its Ad Business Slowing, Facebook Invests Billions In Metaverse


10/26/2021


With Its Ad Business Slowing, Facebook Invests Billions In Metaverse
Social media company Facebook Inc will now begin making public financial performance of the augmented and virtual reality labs of the company, the company said on Monday. The company invests billions in its plans for these labs to develop the "metaverse."
 
The company also said that "substantial uncertainty" was being faced by its main advertising business.
 
Reporting a 17 per cent growth in its profits for the third quarter, the social media giant cautioned that its digital business would be hit in the current quarter because of Apple Inc.’s new privacy restrictions. The revenues for the third quarter of the social network business fell short of analyst forecasts, owing to iOS modifications, according to Chief Operating Officer Sheryl Sandberg.
 
The investments of the company in its hardware section, Facebook Reality Labs, will cut overall operating profit by about $10 billion in 2021, warned Facebook's chief financial officer, David Wehner.
 
In recent weeks, the company has been dealing with the fallout from internal documents obtained and made public by the former Facebook employee and whistleblower Frances Haugen, which allegedly show that the company prioritized profit over user safety and this latest announcement of related to the company’s investment in this hardware-focused branch, which will work on Facebook's "metaverse" goals, was made.
 
Defending the company against allegations based on the leaked documents, CEO Mark Zuckerberg claimed that the allegations created a "false picture of our organization." He was speaking at an analyst call on Monday.
 
According to the CEO, Facebook will be viewed as a metaverse corporation rather than a social media company in the coming years. The trendy word is essentially linked to a shared virtual environment that may be accessed by anybody with a computer.
 
A product team to work on the metaverse was created this year by Facebook, which has made significant investments in virtual reality (VR) and augmented reality (AR) and has acquired firms such as Oculus. The company also aims to hire 10,000 people in Europe to work on this program over the next five years, it said this month.
 
"This is not an investment that is going to be profitable for us any time in the near future," Zuckerberg told analysts. "But we basically believe that the metaverse is going to be the successor to the mobile internet."
 
The financial performance of Facebook Reality Labs would be reported separately from the rest of Facebook's apps, starting in the fourth quarter of 2021, Wehner said.
 
Global politicians and regulators are scrutinizing the world's largest social media network, including the Federal Trade Commission, which has filed an antitrust case alleging anti-competitive activities. The Wall Street Journal was the first to report on the whistleblower materials and the case has further increased the need for scrutiny of the company.
 
The revealed documents include internal research carried out by the company and their reports on Instagram's effects on teen mental health and whether Facebook's platforms foster divisions, as well as the company's handling of the Capitol brawl on Jan. 6 and anomalies in content moderation for users around the world, are among them.
 
(Source:www.indiatoday.in)


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