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May 29, 2024

Zuckerberg Faces Mounting Scrutiny As Metaverse Plans Falter and Facebook Use Declines

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Feb 5, 2024

Key Takeaways

  • Facebook celebrates controversial 20th anniversary amid stagnating user growth
  • Zuckerberg continues pushing troubled metaverse plans despite reality gaps
  • Investor confidence wavers on metaverse spending, stock down over 60%
  • Calls increase for accountability and regulation of social media giants

Facebook Turns 20 Amid Controversy and Slowing Growth

Facebook celebrated its 20th anniversary this week, marking two decades since Mark Zuckerberg first launched the social networking site from his Harvard dorm room in 2004. However, the milestone comes at a turbulent time for the company now known as Meta.

Facebook’s user growth has stalled in key markets like North America, where some users are abandoning the platform amid controversies over privacy, misinformation, and hate speech. Daily active users in the U.S. and Canada fell to 176 million at the end of 2022 from 195 million two years earlier.

Region Dec 2022 Daily Active Facebook Users
United States & Canada 176 million
Europe 306 million
Asia-Pacific 373 million
Rest of World 634 million
Total 1.98 billion

Source: Meta Q4 2022 Results

Some long-time users have grown disillusioned with Facebook’s negative impacts over 20 years, from enabling the spread of misinformation to issues around data privacy and mental health. Public trust in the platform has declined sharply in recent years.

With the company focusing resources on the metaverse, some analysts wonder whether Zuckerberg has lost touch with solving real problems in favor of chasing theoretical future trends. As one tech policy expert put it, “For those outside Silicon Valley, it feels like the leadership lacks the wisdom to repair what it built.”

Zuckerberg Forges Ahead With Metaverse Despite Reality Gaps

Even as Facebook faces external criticism and business headwinds, Zuckerberg continues full steam ahead with his ambitious vision to transform the company into a metaverse pioneer. However, significant technological and adoption hurdles remain.

Announcing the company’s rebranding as Meta in 2021, Zuckerberg promoted the metaverse as the next frontier enabling immersive virtual, augmented, and mixed reality experiences. The move reflected his long-held fascination with emerging technologies and desire to drive the next big computing platform shift.

In a post celebrating Facebook’s 20th birthday, Zuckerberg reiterated his belief that the metaverse represents the future. “The last 20 years have been about getting everyone connected,” he wrote. “The next 20 years will be about building the connections that really matter.”

However, early iterations of Meta’s metaverse products, like the Horizon Worlds social VR environment, have underwhelmed users. Bugs, cartoonish graphics, and limited capabilities have led one analyst to quip Horizon feels “more like a poorly built video game than a virtual world.”

bridging the gap between the hype and gritty reality facing emerging technologies. As AI ethics scholar Mark Coeckelbergh noted, true innovation requires patience and managing expectations: “Move fast and break things is not a good motto if you want to build a metaverse.”

Investor Scrutiny Rises as Stock Plummets 60%

Meta’s spending on metaverse R&D has also become a sore spot for investors as profits decline, with the stock price plummeting over 60% in the past year. Total spending on Reality Labs, Meta’s metaverse division, ballooned to $13.7 billion in 2022 while only generating $2.2 billion in revenue.

Facing economic uncertainties, Meta investors have grown weary of ambitious longer-term bets like the metaverse burning through cash. Criticizing the strategy on a recent earnings call, one shareholder exclaimed Zuckerberg was “throwing good money after bad.”

The plunge erased over $700 billion in market value, leading some large shareholders to call for cost cuts and greater accountability. Hedge fund Starboard Value recently revealed it took a significant stake in Meta and plans to advocate reining in metaverse spending.

Date Milestone Share Price
Sep 1, 2021 Metaverse announced;
Stock hits all-time high
$382
Feb 2, 2023 Disappointing 2022 results;
60% drop since 2021 peak
$153

With the stock languishing far below recent highs, Zuckerberg may face pressure to refocus efforts on bolstering Facebook’s core business to restore investor confidence. How he navigates these crosscurrents could determine Meta’s future direction for the next 20 years.

Accountability Calls Mount as Power Concerns Persist

On another front, policymakers globally continue ratcheting up calls for greater oversight and accountability of social media companies like Facebook. Governments are grappling with disinformation, hate speech, data privacy, and anti-competitive behavior enabled by platforms built for scale over responsibility.

In an op-ed, Stanford Internet Observatory Executive Director Nina Jankowicz argued that Meta’s pattern of prioritizing growth and influence over transparency or protecting vulnerable users demands intervention.

“Zuckerberg shaped the modern information ecosystem by moving fast and breaking things,” she wrote. “It is incumbent on Western democracies to fix what he has wrought… We need accountability, oversight and transparency mechanisms built into social media from the outside in.”

Lawmakers have floated various proposals to reign in tech giants, from updating children’s privacy rules to requiring transparency around algorithms and content moderation. The UK and EU recently unveiled landmark legislation, the Digital Services Acts, imposing hefty fines for failures to control illegal or harmful material.

While Zuckerberg has endorsed certain reforms like updating Section 230 legal shields, he continues resisting changes perceived as threats to innovation or free expression. Navigating inevitable regulation while preserving Meta’s business interests presents another tightrope for him to walk.

The Road Ahead

As Facebook passes a conflicted milestone, Mark Zuckerberg stands at a crossroads. Key questions loom about Meta’s future direction and his ability to deliver on ambitious bets like the metaverse vision while also addressing persistent criticisms of his flagship platform’s societal impacts.

With growth stalled and scrutiny rising, Zuckerberg faces dual challenges of reinvigorating Facebook’s core value proposition for the next generation of users and justifying costly metaverse investments to skittish investors. Both undertakings require humility and wisdom to ensure Meta’s next 20 years aren’t as turbulent as its first.

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AiBot scans breaking news and distills multiple news articles into a concise, easy-to-understand summary which reads just like a news story, saving users time while keeping them well-informed.

To err is human, but AI does it too. Whilst factual data is used in the production of these articles, the content is written entirely by AI. Double check any facts you intend to rely on with another source.

By AiBot

AiBot scans breaking news and distills multiple news articles into a concise, easy-to-understand summary which reads just like a news story, saving users time while keeping them well-informed.

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