Meta’s metaverse aspirations haven’t fared well for the tech giant, as the firm wiped out nearly five years’
Meta’s metaverse aspirations haven’t fared well for the tech giant, as the firm wiped out nearly five years’ worth of market cap in just 10 months of 2022.
Facebook went under a major brand overhaul to project its focus on the Metaverse and rebranded to Meta in late 2021. The major shift for the social media giant surprised many, but looking at Facebook’s record with emerging tech trends, it was only a matter of time before it jumped into Web3.
Meta’s crypto aspirations first came to light in 2019 after a failed experience in the digital payment sector with a Messenger-integrated payment option. The tech giant subsequently revealed its plans to launch a universal stablecoin backed by a basket of fiat currencies from different nations. The plan was to introduce a global digital payment network with the help of its social media reach of more than two billion active users on Facebook, Whatsapp and Instagram.
However, with the uncertain nature of the asset and Facebook’s tainted record in managing private user information, regulators around the globe were suspicious at best. Lawmakers in the United States compared it to scrip while others vowed to never let it see the light of day.
A rebranding from Libra to Diem did not help the nascent payments project, and the stablecoin officially shut down in February this year.
Meta has since shifted its focus toward Web3 and aims to become a leader in the Metaverse. Meta has spent billions of dollars on specialized hardware and virtual reality tools. However, with the advent of the bear market, Meta’s metaverse bet has started to look shaky as well.
Richard Gardner, CEO of global software and hardware solution provider Modulus, told Cointelegraph that Meta hasn’t found its core competence yet, stating:
“Great companies know their strengths and exploit them. Facebook is now in the unenviable position of attempting to compete within the metaverse economy. Unfortunately, that’s not where the company’s core competencies are.”
“Worse, they’re competing against dozens, and maybe hundreds, of smaller companies that are more nimble and agile to adjust to the ever-changing landscape. These companies were specifically built to develop and exist within the metaverse ecosystem. Facebook was not. Shareholders won’t allow this dalliance to continue,” he added.
Meta’s biggest challenge is decentralization
Meta — which boasts the lion’s share of the world’s social media user base — is currently struggling to transition from its Web2-based origins toward a decentralized Web3 ecosystem. Meta has already experienced a multitude of failures with its stablecoin foray and many experts believe that its metaverse aspirations look misguided at this point as well.
John Payne, CEO of metaverse operating system developer Croquet.io, explained to Cointelegraph that the consensus is that big tech firms like Meta making a foray into Web3 must first understand the ethics of it. He explained:
“The biggest competitor to Meta’s view of the Metaverse is the open, interoperable standards-based Web. Open technologies usually win. The web is everywhere, on every device with a screen. It has the largest community of developers in the world. And, portals based upon open web standards will make the Metaverse truly independent and interoperable. The web will be the foundation for the Open Metaverse and that is where the vast majority of people will thrive.”
Meta’s metaverse aspiration, unlike its stablecoin projects, doesn’t have any regulatory setbacks, but despite that, the company is struggling to keep up in the Web3 race. This is primarily because, unlike the last decade when Meta could copycat their competitors’ new features (e.g., Stories from Snapchat, Dating from Tinder, Live Video from Periscope, etc.), or simply acquire their competitors (e.g., Instagram, WhatsApp, Beluga, etc.), they have to build out this entire platform themselves from the ground-up.
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Additionally, there aren’t many mature acquisition targets in the industry right now, and the U.S. government has signaled its distaste for Big Tech’s continued acquisitions of competitors in what it considers possible violations of antitrust laws.
Some in the Web3 space believe that the sector’s open and decentralized nature goes against the Web2 company’s main aim of establishing a monopoly. Rick Porter, CEO at decentralized social media platform DSCVR, told Cointelegraph:
“The Metaverse has to be open, integratable and unowned by any single entity. Meta’s push to own the Metaverse is antithetical to this concept. Further, Facebook’s historical failure to maintain the open integrations that it first envisioned with Open Graph does not bode well for its Metaverse aspirations. With the advent of Web3 and open ecosystems, it’s hard to see the Metaverse…
cointelegraph.com