Renaming of Facebook to help in multiple ways
The renaming of social media giant Facebook to Meta indicates an intended route to future growth for the group. It may also help deflect some of the increasingly negative perceptions associated with the Facebook brand. The group is looking to diversify its revenue streams and to slough off some of the current distrust. Facebook dominates social media with 2.9 billion active users, along with products like Instagram (1 billion users) and WhatsApp (2 billion users). There is little scope for organic growth, given the high base of penetration. In addition, competition regulators of various countries are assessing ways to dilute its monopoly power, which could impede further growth. The revenue model is dependent on advertising. Ads contributed $84 billion of the $85 billion total turnover in 2020. Ad revenues depend on user-engagement, and on data analytics to translate engagement into targeted advertising.
The network has been hurt by negative reports based on internal data leaked by whistleblowers. These indicate it is willing to overlook hate speech and fake news in the quest for engagement. Its web analytics app, Onavo Protect, has been sued in Australia for the misuse of personal data. Surveys also indicate user-trust has been eroded, and in addition, legislators in many nations are considering regulations to impose content-moderation, which may reduce engagement. The renaming could help in several ways. It may reduce negative associations in the social media space itself, to some extent. Crucially, it would help Meta to disassociate from the existing negative associations as it targets new revenue streams. Meta, which is Greek for “beyond”, signals a move into the “metaverse”. That word was coined by writer Neal Stephenson to describe realms where virtual reality (VR) and augmented reality (AR) interact with the real world.
Group company Oculus, which makes cutting-edge VR gear, provides one potential launch-pad into this space with VR helmets and headsets. Users must log in using a Facebook account, which has attracted criticism from privacy advocates. These helmets could become as ubiquitous as smartphones in the future, as the metaverse catches on. The Oculus brand name will be phased out and replaced by Meta in 2022. There is also Horizon, rebranded from the erstwhile “Facebook Horizon” even before the name-change to Meta. Horizon is a platform for developers using VR and AR tools. The business model may in part be analogous to the highly successful Roblox. Developers would be offered free access to the platform and its tools, and they would share revenue for commercially successful games they developed.
In addition, Horizon Workrooms can be hired to develop directly monetisable AR/VR content. For example, a realtor may develop a guided virtual/AR tour of a new apartment complex, or office. Or an automobile company could offer virtual drives. Designers could virtually tailor clothes for clients. The possibilities are endless, and the pandemic has certainly accelerated the acceptability of using AR to showcase all sorts of goods and services. The rebranding could help to ensure these new initiatives are not tainted by negative associations, with the cavalier attitude to privacy, and the endless churning out of hateful content and fake news on social media. Whether the rebranding will dissuade legislators from forcing through new moderation norms, or competition commissions from attempting to dilute monopoly power is a different matter.