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Comment by tinyhouse | Hacker News Reader

I disagree. They didn't lose focus. Their new focus is VR. They anticipate it's going to be much bigger growth engine for them in the next decades, while the current core business is slowing down. Maybe their mistake is that they are too aggressive with the VR spending. There are many examples of companies that had a great core business that was gradually slowing down and new companies came and ate their lunch. Meta is trying to prevent that by being the leader in a completely new space. It's a bet that is going to be either a huge win or fail.

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VR isn't like digital cameras destroying film, it's a completely different business. It'd be like Netflix deciding their video streaming business has peaked so they're going to hire 10,000 new engineers to work on a new wind turbine business.

I agree with you they are focused on VR, but where I disagree is that they are a social media company. They're not focused on what their company actually does. It's kind of an obvious point that maybe the reason their core business is slowing down is because the head of the company decided to stop working on it. At some point it's going to become obvious that if you spun off the Facebook part of Meta it would have a significantly larger market cap than Meta has.

I don't think it's a problem that VR is a completely new business. (It has a social aspect to it but it's not relevant to the discussion). I do agree that a better model would be the Amazon one. Amazon grew a completely new business (AWS) that had nothing to do with its core business (retail) but didn't lose focus on its core business and managed to grow both at the same time.

But when AWS started with s3 the stakes were small and they already had the technology. It was a natural, low stakes attempt to diversify. They didn’t bet the farm on AWS it just kinda happened organically. At least that is my assumption, I could be wrong.

FB is betting the farm on a completely new technology with almost no user validation or product market fit. It’s incredibly higher risk than Amazon expanding into AWS.

I agree Amazon's approach was better. But I wouldn't say that FB is getting on something completely new without product market fit. They acquired Oculus in 2014, so they have almost a decade of experience with the technology. Also their VR headsets are very popular and have high demand. The problem is that they didn't figure out a way to monetize yet and it's far from mainstream. The main use case is still video games, far from the social vision Zuck has. I have a Quest and I like it, but even for video games if I had to pick one console, the Quest wouldn't be in my top 3 choices. I hope they succeed and I think it's not fair to judge them so early.

That’s a poor comparison. Amazon spun off a cost center into a separate business, so that they could make a profit on infrastructure they already had to have for their core business. So even with zero customers “AWS” would still have to exist in some form for Amazon’s core business to function. That is completely different relationship than Meta’s core business and their VR initiatives.

netflix did make that transition from mail to online streaming (albeit badly at first)

Mark indicated that WhatsApp was next for growth/monetization and then VR, when he last appeared on CNBC's Mad Money.

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