Late last month, noted CEO Mark Zuckerberg announced that Facebook is changing its name to Meta, and changing its official stock ticker from FB to MVRS. The name Meta is a shorthand for the metaverse, which is itself shorthand for an almost fully immersed online world, where people can play, work, and gather in groups in the virtual sense. Zuckerberg is betting big on building it, even though it’s been tried before. (More on that in a bit.)
That this massive shift away from one of the world’s most recognizable brand names comes amid a slew of scandals is indeed curious. But let’s leave all the political soundbites and sexy headlines aside for the moment. This is not about the Facebook Papers, nor about Russian disinformation, nor about Cambridge Analytica, or data collection, or facial recognition…man, they do have a lot of shit swirling around the campus out there, don’t they?
Nah, this smells like a big bet hardware play, plain and simple.
This whole Meta rename is nothing more than a cosmetic corporate restructuring that will now control Facebook and its other well-known brands, including Instagram, WhatsApp, Messenger and Oculus. A lot like when Google changed their name to Alphabet, and rolled up all their brands, including Google itself, under the holding company. (PS – only investors care about this stuff, and THEY still call it Google. And the stock ticker for the company known as Alphabet is…GOOGL.)
So why isn’t Zuckerberg saying that?
I have an idea. Maybe it’s because the metaverse isn’t a great idea. Or, rather, maybe it isn’t a great idea to shelter it under the enormous loads of cash that the artist formerly known as Facebook has at its disposal. It’s been widely reported that the year one budget is over $10 billion, and that 10,000 people, mostly in hardware, will be recruited to make it go.
When any entrepreneur wants to launch a new idea, especially a broad and ambitious one like the metaverse Zuckerberg envisions, it’s good practice to prove it can actually accomplish something on its own merits. It’s a good practice to seek capital from investors and show milestones that prove the concept. In the absence of that kind of oversight and objective grownups in the room that business incubator model provides, it’s just another lavish vanity project. The Metaverse is to Zuckerberg what space is to Bezos, Musk and Branson: a vast unknown that he hopes to monetize.
And let’s remember two important things about Meta’s metaverse:
First, the road to the metaverse was paved by Second Life way back in 2003, a full year before Mark Zuckerberg’s “hot or not” turned into “thefacebook.” It is a metaverse full of avatars and provides an almost identical experience to what Zuckerberg envisions: an interesting alternative online environment, where you can have virtual meetings and other whatnots. (Kinda mostly trying to ply a virtual shopping mall, though.)
Second, and far more interesting: Meta’s virtual world will require, not suggest, that you purchase some very real and very significant pieces of hardware to access it. Oculus VR goggles are currently retailing at around $300, and may not have the full range of capabilities to access what will eventually become the Meta metaverse. It’s a long way to go to sell a bunch of accessories, but it sure sounds like a hot hardware play, doesn’t it? Build the metaverse, get a lot of good press, then tell those who can afford it that the only way to get on board is to buy some rechargeable VR binoculars, now available in six avatar-worthy colors! All of this is coming right on the heels of Facebook (can we still call it that?) inking a deal with Ray-Ban to sell some fancy Smart Wayfarers that take photographs and play tunes, also for about $300.
If I didn’t know better, I’d swear Zuckerberg was trying to emulate Steve Jobs in some way. After all, Apple’s most successful product was/is the iPhone, not the Macintosh, its former flagship. It required the purchase of a significant piece of hardware. It was an ambitious project and came decades after the company launched. And Jobs didn’t just have the phone developed with a base OS and software. He outsourced the smartphone “experience” to third party developers via the app ecosystem so every user could customize their device to their liking and have a uniquely personal interaction with it. It’s what ignited the phone’s insanely fast global adoption, and may be a route that Zuckerberg is similarly exploring. The metaverse will require the purchase of significant hardware. It, too, is an ambitious project that will launch decades after the Facebook flagship. Let’s all pay attention over the next couple of years and take notice when third-party developers – under a watchful eye and strict guidelines, of course – are invited to curate and broaden the metaverse experience in various ways, like shopping, gaming, utilities, fitness, and others.
Other tech CEOs have also profited marvelously in various ways on and off the Internet, and have pivoted to hardware in the process. Brin and Page monetized consumer intent with paid search advertising. Then they sold us Pixel phones and Google Home and acquired Nest for broader reach with devices. (And they’re betting big on Waymo.) Musk made his money online with PayPal when it sold to EBay, then monetized major hardware with Tesla electric cars. Bezos is a retailer and monetizes markup. He also likes hardware – Kindle and Echo both do just fine, thank you very much. With Meta, Zuckerberg seeks to do all of the above, just in the opposite order. He’ll first sell hardware to access the metaverse. Then he’ll sell advertising (likely highly contextualized) with a new model that combines search history, affinity, and basic demographics to a mostly Gen Z audience. He’ll build in some exchange system (maybe crypto-based) in the metaverse that costs real offline dollars. And he’ll most definitely build some kind of online shopping component.
So…what color would you prefer for your new goggles?