Facebook’s Mark Zuckerberg is clearly enamored with the metaverse. The chief executive officer has been talking about it for years, especially lately, but at his second-quarter earnings call on Wednesday, he laid out how he plans to make it happen.
For a company with a haul of more than $29 billion in revenue and over 3.5 billion users across its various services, any talk about long-term strategy matters. When it disclosed a decelerated outlook for the third and fourth quarters, a rattled Wall Street drove the stock down as much as 5 percent.
Unfazed, company executives — chief operating officer Sheryl Sandberg, chief financial officer David Wehner and Zuckerberg — calmly walked listeners through their grand plans for the future, a vision that traverses and interconnects commerce, the creator community, artificial intelligence and Zuckerberg’s beloved metaverse.
The CEO described it as “a virtual environment where you can be present with people in digital spaces. And you can kind of think about this as an embodied internet that you’re inside of rather than just looking at, and we believe that this is going to be the successor to the mobile internet,” he said. “You’re going to be able to access the metaverse from all different devices and different levels of fidelity, from apps on phones and PCs to immersive virtual and augmented reality devices.”
He’s not alone in this thinking. Silicon Valley is enamored with variations on the same theme. Apple has been very vocal about augmented reality, for instance, as the future of computing, and Google’s take on it, Project Starline, translates the experience as a souped-up version of video calling, with a “magic window” that feels like the other person is in the same room.
The play for Facebook, owner of virtual reality outfit Oculus, hinges on mixed reality. The company, undaunted by its latest stumble with the Oculus Quest 2 headset — a recall for the foam banding on the device just before earnings results came out — talks excitedly about VR becoming a more social platform and going beyond games to other experiences.
Meanwhile, it’s gearing up for its hardware push into AR, in an effort that veers into fashion territory.
“Looking ahead here, the next product release will be the launch of our first smart glasses from Ray-Ban in partnership with EssilorLuxottica,” the Facebook cofounder dished, about the upcoming face wear that the company previously revealed would debut sometime this year. “The glasses have their iconic form factor and they let you do some pretty neat things, so I’m excited to get these into people’s hands and to continue to make progress on the journey toward full augmented reality glasses in the future.”
It’s a step toward more immersive AR, and another mile marker on the journey to the metaverse.
Ultimately, for Facebook, it’s about creating an environment capable of fostering more fulsome interactions between people, regardless of distance. If the social media behemoth and its peers among the tech giants are correct, the metaverse will have huge implications for communication, remote work, gaming and other social activities — including shopping.
“As we embark on this next chapter, ads are going to continue being an important part of the strategy across the social media parts of what we do, and it will probably be a meaningful part of the metaverse, too,” he said. “I think commerce is going to be increasingly important, which is one of the reasons why we’re focused on this across our current apps and the current economy.”
In other words, the metaverse will be fertile ground for a new economy of digital goods.
“I think digital goods and creators are just going to be huge, in terms of people expressing themselves through their avatars — through digital clothing, through digital goods, the apps that they have that they bring with them from place to place,” he continued. “A lot of the metaverse experience is going to be around being able to teleport from one experience to another, so being able to basically have your digital goods and your inventory and bring them from place to place. I think that’s going to be a big investment that people make.”
He didn’t bring up NFTs by name, but it seems obvious that nonfungible tokens could have a place in this environment. The digital goods — which have rarity and uniqueness, as well as the ability to be authenticated — have taken the art and fashion worlds by storm, and platforms are springing up to sell, trade and make use of them. And they can also apply to physical goods, as well as digital.
As for the metaverse itself, a lot of things need to happen between now and the arrival of this sci-fi-like future. But Facebook is intent on delivering the building blocks to get there, and it traverses the company’s array of efforts.
Its basic playbook, according to Zuckerberg, is to build social products that “get to scale.” The goal is to ensure the metaverse has plenty of users in it — hundreds of millions of people, he said.
“Our focus for now is really on helping to develop the community, helping to develop the number of people who grow the number of people who can be in these metaverse experiences and can experience some of these next computing platforms like virtual and augmented reality,” Zuckerberg added.
That explains Facebook’s focus on the creator community. The company has pledged to invest more than $1 billion in programs that give creators new ways to earn money by the end of 2022, and it’s been steadily pursuing popular video formats, such as Instagram Live and Reels.
“Video now accounts for almost half of all time spent on Facebook, and Reels is already the largest contributor to engagement growth on Instagram,” said Sandberg. “Across all forms of video, short-form video like Reels is growing especially quickly, so we’re very focused on making it easy for anyone to create video and then for those videos to be viewed across all of our different services, starting with Facebook and Instagram first.”
Of course, the effort extends to businesses as well.
Wehner outlined four focus areas for growing Facebook’s business in this “next era of personalized experiences”: discovery, commerce, “enhancing” technologies and more direct support for businesses.
For discovery, he elaborated that “we’re testing a new experience in News Feed where you can tap to browse content from businesses on topics like beauty, fitness or clothing. And we’re using context to make smarter recommendations about which ads to show, so if you’re watching a travel video, we could show ads for hotels and flights.”
Facebook also wants to build “a modern commerce system across ads, community tools, messaging, shops and payments,” he said. “It’s all about creating a personalized seamless customer journey where it’s easier to discover a product, buy it, pay for it and have it delivered to your doorstep.”
In terms of technology, it’s a broad and deep area of investment for Facebook, especially now, with Apple’s changes to iOS software. The update makes it easier for iPhone users to stop apps from tracking them. The social media company’s solution is to point its considerable AI and machine learning chops at the problem, so that it can still offer robust ad solutions, even with less user data.
The stakes are sky-high for Facebook. Its base of advertisers totals an estimated 10 million, and may grow further with the June launch of Reels Ads — which, Sandberg noted, is still in the early stages, but looks “promising.”
The fourth point the company is focusing on is “building tools that help businesses beyond marketing,” said Wehner. As it stands, Facebook and Instagram Shops boast 1.2 million stores, so the idea is to help them and others with customer relationship management, business messaging and even hiring through products like Facebook Jobs.
Messaging, in particular, is a key priority for businesses, according to Zuckerberg, who sees customers increasingly rely on messaging instead of phone calls. The company has been working on cross-app communication between the Facebook family of apps, making it easier to message customers across apps from a single interface and expanding Messenger features to Instagram.
“I think [it’s] going to be an important part of commerce, and helping people interact with businesses in a way that is natural to them,” he said. “The cross-app communication in terms of helping people reach people wherever they are — it kind of fits into this vision that we have for the future of people being able to easily teleport between experiences that, I think, is going to be increasingly important as we move toward the metaverse.”