On Monday, Facebook Inc said it will start investing in virtual and augmented reality units, an announcement that comes as its primary advertising businesses face ‘significant uncertainty. ‘
Facebook warned that Apple Inc’s new policy rules would weigh on its digital business in the current quarter after the largest social media company reported quarterly revenue less than market expectations.
David Wehner, Chief Financial Officer, said Facebook is expected to invest in its hardware division, Facebook Reality Labs, to reduce overall operating profit in 2021 by approx $10 billion.
Facebook’s Chief Executive officer Mark Zuckerberg said that Facebook would be named ‘Metaverse Company’ in coming years rather than a social media platform. It is making several investments to expand the technology.
The term Metaverse is broadly associated with Virtual environments. Facebook has invested heavily in virtual and augmented reality, including companies like Oculus. This month, Facebook plans to hire 10,000 employees in Europe for the next five years to work on this initiative.
The world’s largest social media network is under scrutiny from lawmakers and regulators, including the Federal Trade Commission. The whistleblower documents, first reported by the Wall Street Journal, have intensified scrutiny on the company. The report includes internal research and reports about the Instagram effect on the mental health of teens.
Reuters, on Monday, reported that Facebook employees had warned the company about failing to show rule-breaking content in countries where it was likely to cause most harm.
Facebook said it expects fourth-quarter revenue somewhere between $31.5 billion to $34 billion. Analysts had forecast $34.84 billion in revenue or a 24.1 % jump, according to IBES data from Refinitiv.
Talking about the third-quarter revenue, it too faced the brunt of Apple’s privacy rules that made it harder for brands to target their ads on Facebook.
The company’s total revenue, which primarily consists of ad sales, escalated to $29.01 billion in the third quarter from $21.47 billion a year earlier.
The company did not announce anything about the new name of the largest social media platform. Let’s see what will happen, the company will continue with the same name, or we will see a new name for Facebook.