In October last year, when CEO Mark Zuckerberg announced that social media giant Facebook was transitioning to Meta Platforms, there were questions aplenty. Was it done to escape the regulatory blizzard that it had found itself in? Or was it about tapping into the promising metaverse space and reaping the first-mover advantage? Sascha Kraus, professor of management at the Free University of Bozen-Bolzano in Italy with expertise on the subject of digital transformation, has some answers. Edited excerpts from the interview:
According to you, what is the reason behind the change in name and identity by Facebook?
First of all, it is not the social network Facebook that has changed its name but only its parent company. It includes not only Facebook itself and its Messenger, but also other social media brands—Instagram and WhatsApp—as well as Oculus, one of the largest manufacturers and developers of virtual reality glasses and devices, and other companies as subsidiaries.
In view of this diversity of activities, it makes perfect sense not to call the parent company the same as the largest, but definitely struggling, brand. The new name is nothing more than a gigantic bet on a next digital frontier called metaverse—the next generation Internet—a single, universal and immersive virtual world of social media that is facilitated by the use of virtual reality (VR) and augmented reality (AR) devices. CEO Mark Zuckerberg has committed himself to this new vision—to become an essential facilitator of the metaverse—and all subsidiaries will have to work towards this in the future. Meta wants to set the tone here.
Does Facebook’s transition to Meta mean that the growth in social media, as we know it, is now over and every social media company will have to find revenue elsewhere?
Facebook has a much more serious problem: Its users age along with the network and the younger target group, in particular, finds it uncool when their parents, relatives or even teachers send them friend requests and leave for other platforms in droves.
In the future, above-average growth for traditional cell phone and browser-based social media platforms will probably be possible primarily in two ways—through predatory competition in markets that are already largely developed or by concentrating on markets that are as less developed, such as in Africa, where not every man, woman and child has a cell phone with Internet access.
With Facebook’s stated shift to metaverse, which is also reflected in its change of name to Meta and various announcements, what will be Meta’s revenue-generation approach?
This is still just speculative as there are countless ways to make real money in the metaverse. Meta is currently experimenting with a virtual open world called Horizon Worlds in which it is trying out the monetisation of the virtual world where so-called “creators” will be able to offer their products and effects such as special items or access to VIP areas in the metaverse in which Meta itself will always have a percentage share. At the moment, only Americans and Canadians can participate but, in the future, it can be assumed that the virtual world will be available on cell phones and game consoles worldwide via the Oculus Quest platform. More and more companies and stars are also selling special (real) collections of products that can be purchased exclusively here or virtual tickets to events such as concerts or fashion shows.
The metaverse also promises to be a paradise for influencers, insurance companies and the real estate industry and Meta will earn money from all of this in the future with commissions of up to 50 per cent.
Observers say that the shift is to address the negative publicity Facebook has got in recent years over the issues of privacy, the Cambridge Analytica scandal and fake news. How will Meta address these questions when going into metaverse may actually be more intrusive than what we experience on social media?
Of course, the change of name came exactly at a time when the wind was blowing increasingly rough for Facebook. It is obvious to assume a certain influence of the general pressure which was created by the mentioned scandals.
On the other hand, the change of name also makes sense since the parent company was no longer just Facebook itself. In addition, there is the fact that Zuckerberg promises nothing less than a revolution. In the metaverse, you can meet up with friends, recreate your everyday life in the home office using virtual reality and interact with colleagues in other parts of the world. At the end of the day, you can make yourself comfortable in your virtual home with a view of the sea or forest, stream a TV show or a movie or read an ebook.
The negative publicity was thus diverted, to a large extent, by positive connotations. Will there be similar, comparable or even greater scandals in a metaverse that is at least potentially disproportionately larger? Very certainly so. The only question is whether Meta will be in a position to deal with them as Facebook apparently has not been in the last few years.
From a social science perspective, however, this is an extremely exciting experiment that we can all observe live in the coming years—if the metaverse catches on at the scale and speed that Zuckerberg suspects it will.
This news is republished from another source.