Facebook’s Plan To Make Money After the Metaverse
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Facebook’s Plan To Make Money After the Metaverse

Facebook’s Plan To Make Money After the Metaverse

Facebook’s CEO Mike Zukerberg described the metaverse as a set of interconnected digital spaces characterized by social presence, allowing users to feel like they are in the company of others, no matter which world they happen to be in. Users can access the metaverse through the virtual reality headset Oculus Quest, augmented reality glasses, smartphones, personal computers, and game consoles. The company provides its collection of social media apps for free to its users. It charges advertisers to show ads targeted to specific groups or characteristics of users.

Pricing of ads is based on an auction system where ads vie for impressions based on bids and performance. A business running an ad will only be charged for the number of clicks or impressions the ad received. Impressions are the number of times the ad is displayed, even if the ad is not clicked. A business that wants to run an advertisement sets a maximum budget and will be charged a monthly billing based on the ad’s performance. Facebook (Meta) generates most of its revenue from selling advertising space.

Meta Platforms Inc. sells ads on social media websites, mobile applications, and augmented- and virtual reality products and services. Advertising sales are the primary source of Meta’s revenue. Meta’s leading social media platform, Facebook, reported losing daily active users in the fourth quarter (Q4) of the fiscal year (FY) 2021. It was the first time in the company’s history that the number of daily active users had fallen. Reality Labs is Meta’s augmented and virtual reality technologies sector, which features products such as the Oculus VR headset.

Meta discloses data about the diversity and inclusion of its general manager and employees. Family of Apps (FoA) The Family of Apps (FoA) segment captures all of the revenue Meta generates from selling advertising to marketers, comprising nearly all of the company’s total revenue. Ads are displayed on Meta’s leading social networking site, Facebook, Instagram, Messenger, and other third-party affiliated websites or mobile applications.

Marketers pay for ads based on the number of impressions delivered or actions, such as clicks, undertaken by users. Meta’s Recent Developments On Feb. 2, 2022, Meta, in a slide presentation of its results for Q4 FY 2021, indicated that its daily active users (DAUs) declined slightly compared with the previous quarter. It marked the first time in company history that DAUs have fallen. Meta also provided revenue guidance in its Q4 earnings press release. The company projected that its revenue for Q1 FY 2022 would be in the range of $27 billion to $29 billion. While that represents 3% to 11% YOY growth, it also represents a decline from Q4 revenue of $33.671 billion. 

The company has expressed that its Q1 results would impact several headwinds, including Apple’s changes to its iOS early last year that force apps to obtain permission from iPhone users before they are allowed to track those users to offer targeted advertisements.