Why Meta is tanking and how Zuckerberg can fix it | Hacker News Reader

Why Meta is tanking and how Zuckerberg can fix it

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14 pointsfortran7774 comments

Zuckerberg seems to really think that VR is the next ”big thing” like the iPhone. I’m curious what people here think about that. I’m currently on the skeptical side for a couple of reasons.

The tech isn’t there. These headsets are bulky and ugly, only very dedicated users are willing to wear them for hours a day. Maybe someday they’ll be the size of Google glass, but it’s certainly too early to bet your company on it.

The killer app is basically VR Chat. This already exists and has existed in non-VR forms (second life) for ages. It’s definitely a successful idea, but it appeals to a relatively niche crowd, mostly very online teens.

A phone doesn’t fully occupy your senses like VR. We have responsibilities in the real world that keep us from staying fully in VR.

NFTs. Why would they bring NFTs into the marketing? NFTs appeal to a certain crowd for sure, but everyone else is repelled by that crowd, and is sick of everything about NFTs.

Lastly, they need to work on marketing. Especially a new spokesman.

I think VR is probably here to stay this time, but they should focus on gaming. It actually works, but there needs to be some fresh ideas before people get tired of it. Send dev kits out and incentive really creative developers to get involved. Man cannot live on Beatsaber alone.

There is already great "experiences" in VR.

One issue being that for a lot of them you need a room dedicated to it.

Another issue is, If you happen to be addicted to your couch, a lot of games doesn't work... Because you have to stand up to play them.

Idk about VR but I think AR could possibly become a winner (assuming fundamental problems like battery life and headset weight are solved)

Everyone has this mindset that VR must be coupled with greater immersion. I think the real “value unlock” will be when it’s just for casual side browsing alongside daily life, like how most people use smartphones

Will the tech ever get there? Will this even be good for daily life? Probably not. But it might be addictive enough to displace smartphone usage.

Immersion is too intense. Nobody wants to be immersed for more than maybe an hour, so VR will always just be a toy

I guess maybe it'll have a chance with low-profile "Meta glasses". The joy of smartphones is their ubiquity and super low friction to use - until one can easily pull out the AR during a boring moment in a restaurant I can't see it having the same draw.

> until one can easily pull out the AR during a boring moment in a restaurant I can't see it having the same draw

Agreed

I think the already available NREAL Air is a nice glimpse at where the tech is today

https://youtu.be/Oq-n9WJBI0Q

Those look pretty cool. Also good to see other companies getting products out there. It would be terrible if Meta gets a stranglehold on the ecosystem.

Zuckerberg hit the lottery with Facebook. It was a success despite of him. Right place at the right time and all. It wasn't a formula that could be repeated, so Zuckerberg is SOL. The key to playing poker is knowing when to fold. Zuckerberg's vanity won't allow him to do so and ironically enough it's the main reason why he won't succeed again.

My take on VR is that it's great for creating an ambiance that would be very expensive in reality. For instance I can and do watch movies in large fancy VR theaters while at home I have a regular TV. Certainly, there are lots of quibbles around that with sound, resolution, when you have multiple people, etc.

I keep trying to use it for work but it's just not there yet. I find it easier to talk to strangers in person than in VR for some reason. It seems to me like it's going to be a long slog until VR is ubiquitous. I think it was too soon for Meta to bet the company on.

I don't understand how Meta could be a compelling game changer like the iPhone because I don't understand what practical value it offers. The iPhone and mobile in general has had an incredible impact on economic efficiency alone, much less the cultural changes it has driven. People can't live without their phones. Whether or not that's a good thing is TBD, but it's hard to imagine a product that is similarly indispensable - Automobiles maybe? Electricity? Indoor plumbing?

Ok, so then compare Meta's big idea. Standing in a room with a screen strapped to your head, blocking out the rest of the world and rendering your body useless? What exactly is that going to provide other than an enhanced gaming or entertainment experience? I fully suspect that I'm missing something because it seems ridiculous. Not the idea of an immersive experience to enhance entertainment, but the idea of taking the largest social media portfolio of companies and pivoting towards this.

For context, I get metaverses. I was a pretty big participant in SL from 2006-2010ish. I wrote tons of lsl and collaborated with builders to sell 10s of thousands of dollars of silly things that made people's experience more fun. So as a fun side thing, I get. But how exactly could that translate in to THE thing? Especially if it means sitting like a zombie on my couch?

Facebook is a mature company. That represents 2 problems:

* Zuck doesn't want to run a mature company, it's boring trying to squeeze 0.001% efficiency out of mature business models.

* It's price/earnings ratio assumes there is a shit tonne more growth coming.

Right now, the Metaverse is just the best (or least bad depending on your opinion) opportunity to NOT just accept Facebook is now in it's middle age. Maybe that will work. Maybe it won't. But that's what is happening here IMHO.

https://archive.ph/K2qwE

the one thing the article tap dances around is the fact that Meta as a company has been horribly overvalued for about the past decade. Its managed to avoid its market haircut largely with smoke and mirror efforts like marketplace and a video chat device (not to mention the strategic rebrand as 'meta.') but the billion dollar metaverse at the cusp of a market recession and record inflation was clearly more than investors were ready to pretend was a viable strategy.

people are drawing comparisons to twitter? and im not sure why. Twitter has always been a massive underperformer and basically just serves as a safe harbor for brand engagement. its worst bug is permitting any political discussion whatsoever as thats generally not brand-safe. Musk can work to lock it down a little more to appease major marketing players --which in doing so will accellerate its user exodus-- or he can start charging users for the pleasure of airing their hot takes and reduce the advertising footprint on twitter drastically, but he cannot do both.

Zuck cant do much to staunch the bleeding at Face, er, meta. Methinks its time to do what he should have done a decade ago: sell the shares and do something else if hes capable of it. if not, well, Gates has proven you can recycle your own cash endlessly as the cow chews the cud through an obtuse network of your own charities that serve no greater purpose than to launder money and perpetuate your legacy in a way that cant be cancelled or removed from the public square if youre posthumously outed as a villain.

I suspect if Elon can get away with charging many, and probably most, heavy users of the platform a monthly fee, Zuckerberg will as well. In many ways such an outcome makes sense given Apple's ATT changes decimated targeted advertising revenue.

Charging the people who create content for you is not going to fly.

For you maybe, but people are vain enough to pay 20 bucks and more for a little blue check. There were insider rings charging much more for it.

Time will tell though, if the easiness with which a blue checkmark is acquired will diminish the significance of having one, and to what degree.

It doesn't matter, charging all engaged users won't make enough money to be meaningful, the math just doesn't work out.

This. It's akin to charging YouTube creators $20/month. These are not the users that are making them money.

How many people will pay 2x the price of Disney+/Spotify/Netflix for a blue check on Twitter?

90% of the people who currently have them is my guess. Though the winds of social favor may shift as Twitter becomes open to more diversity of thought.

Blue checkmarks will be people paying to market to you. It won't take long to block people with blue checkmarks. Before it was some verification that this was a real person/official entity. As for twitter becoming open to more "diversity of thought" I mean, I guess if you want more ads, sure?

There's a great Dr. Seuss book called "The Sneetches" I think would help you to understand what's about to happen.

Twitter devolving into 4chan or as you say "diversity of thought" will not lend itself to having journalists wanting to keep their status on the site.

"as Twitter becomes open to more diversity of thought."

That remains to be seen. It might as well just lead to a shift of thought. Or that all opinions are welcome, but only those get traction and an audience, that happen to align to the opinions of Musk (and whoever else, who has invested heavily behind the scenes)

I use Twitter more than I should - though in a read-only context - and I don't understand what "diversity of thought" is missing at the moment. You can go on any leftist's Twitter and see replies calling them communist, calling trans people mentally ill, etc. The only stuff getting banned consistently is either incitement, like calling for "death con 3" on a group of people or outright racial/gendered slurs. There are mass-reporting campaigns (targeting individuals from both "sides"), but these are usually overturned and are not entirely Twitter's fault. Sure, better moderation would improve the outcome in mass-reporting cases, but it's less a case of bad policy and more a case of Twitter needing to invest more in moderation. Something I think is less likely now that Twitter is loaded up with debt.

That's an arbitrary anchor which is almost meaningless.

>Why buy a yacht when you can buy a blue check?

I'm sure a lot of peeps will buy it. It will bring mediocre revenue, though, particularly against that 44B (+ OpEx) tag.

Apparently there are about 400,000 currently verified users. So, assuming 100% buy in (or enough people buying the blue check mark that it makes up for those who don't), that brings the total revenue from this scheme to ~$100M a year, or about 2% of Twitter's current $5B annual revenue.

We'll have to see.

When it was "exclusive" and indicated some degree of notability, yeah, people who couldn't get it wanted it.

Now it signifies you're willing to pay $250/year for a virtual hood ornament. A nice signal for scammers, but otherwise like listing yourself in "Who's Who".

There are different ways it could work out. On Strava, more than half of the people I interact with are subscribers and that used to be more a signal of "willing to chime in for the platform to remain mostly ad-free" than a fee for extended freemium features (this has changed a bit, more paywalled features, and I'm not too happy about that despite being a subscriber).

I believe that it would be possible (even if not likely) for Twitter to shift into a lean state where they focus on just keeping the boat running and fostering loyalty with those who can and want to afford a subscription that's more a supporter badge than a gateway to extended features. Certainly depends on how much of their current cost is essentially ad sales and how much of that they can (and want to) cut. At least they are certainly much closer to that than anything Meta ever created or bought (with the exception of Oculus, which might certainly have been on a path to becoming a viable hardware company had it not received the Zuck's kiss of becoming deeply untrustable)

Some twitter users are clearly willing to pay for whatever it is they get out of using twitter - one just paid $44 billion :)

But it will definitely temper my social media addiction, which will make me a lot more productive. So I'm rooting for it.

I think a lot of them would pay a small amount to keep the cash flowing. They many not like it, but the leverage is on the platform's side until the audience moves.

People have an extremely dependent relationship with Twitter. It’s more like gambling than media. They will absolutely pay.

If we don't fund-raise and pay for $position_X_on_political_spectrum voices on Twitter to spread virtue and truth, the conversation will be hijacked by those goddamn $position_Y_on_political_spectrum shills and traitors!

It’s clearly a trade-off decision. If paying will give you access to a target audience people will pay. But I agree that you need some kind of business to be willing to pay.

Yes it will, if those people are creating the content for some other goal - e.g. political, commercial, publicity, etc.

I mean the entirety of Gab and the fediverse are based off of content producers paying to use the service

People pay gab? What?

Yeah Gab Pro, it lets you upload higher quality content, videos, and some other stuff including applying to get verified. It's how they made most of their money for a long time, ads are a recent thing for their site to my understanding. It's $15/month

You're more optimistic than I am that charging for verification would be an effective way to make money for Twitter. More likely I think it'll just lead to far fewer blue checks and no significant change of revenue.

And it may also make the blue ticks meaningless, if just anyone can pay and get them.

That's how universities with donor and alumni preference work. They let in notable people more easily and people that test well may even get a scholarship, and others can bribe to be included in the club.

Bribing your way into an elite college costs a lot more than $20/month, though.

As a society, we also confer prestige on a lot of things that basically amount to spending a prohibitively large sum of money: running a foundation; being an angel investor; owning a sports team, champion racehorse, Lamborghini, etc. But if just anybody can afford something and the only barrier to entry is cost, then it has no social currency.

There are plenty of goods that work essentially like veblen goods but that are not really out of reach for anybody who is a non-zero amount of disposable beyond starvation. Converse shoes, Ray Ban shades, there's an endless list of brands that people pay a premium for to show off, despite not containing even the tiniest trace of that exclusivity that stems from being prohibitively expensive.

The last clause in your comment is doing a lot of work. Prohibitive cost is only one form of exclusivity, but there are many others. For example, Twitter’s blue checks are free today but difficult to obtain. It sounds like Twitter is looking to replace the current system of exclusivity with one based on cost, and $20/month just isn’t very exclusive.

> Bribing your way into an elite college costs a lot more than $20/month, though.

So will the checkmark once they price discriminate on wealth or follower count.

I just don’t see how that’s workable as a business strategy. If Twitter charges you for a blue check, the social value of the mark will go down. If they simultaneously charge higher prices based on the wealth of the subscriber, that’s asking wealthy tweeters for a lot of money for something whose value has been significantly diluted.

It depends on if they still have the notability requirement; if they just charge $20 and anyone can get it then it definitely devalues the whole thing (the whole value of the mark other than as a signal is access to DM other notable people; if anyone can pay $20 to DM celebrities and stuff celebrities will turn off blue check mark DMs or if there is no option just ignore DMs entirely, which then kills the journalism loop on Twitter where journalists get access to celebrities, politicians, etc. by having the mark).

Not meaningless if they still do verification (which afaik they would).

Not meaningless, paid blue checkmark would mean that somebody has a business interest in their use of Twitter (which means they're marketing to me). Now I know exactly which accounts to not follow.

People fundamentally use Facebook differently than twitter, even if fb can be used as a public square, most ppl still use it to network with ppl they know (or used to know). Whereas twitter’s entire use case is talking to people who you’ve never met and likely never will.

The point is that engagement is very different and no one cares about verification on fb. Editable posts have been a thing for years and I’m blanking on what other features are part of twitter blue but I doubt it’ll be enough to charge people $19.99/m

Heavy users as in frequent posters: is just selling native advertising. It doesn't change the ad-suported model.

^ Been on twitter since the early days. I'm not much of a social creature by nature, but as a marketing channel, twitter has by far generated the most business for me over the years. I just be helpful in public, and when we need a new customer I literally just tweet "had some hours open up if anyone is looking for X" and just like magic we get a new customer. I wouldn't scoff at paying a little to keep that, but remove the non-native/boosted advertising from my feed.

Facebook or Instagram doesnt have monitization problem. Wouldn't this be short sighted / greedy?

I actually think we should pay for the things we use. Then we can retire the "if you're not paying for the product, you are the product" excuse that many just automatically throw out to justify data collection.

Most keep collecting data (making you the product) even when you pay for the product. MS Windows, Smart TVs, your graphics card driver, your popular news source even with the ad-free plan...

It looks like you cannot pay them enough to get rid of the tracking.

You're going to be the product regardless.

They'll just charge you on top of collecting and profiting from the data they collect on you.

> I suspect if Elon can get away with charging many, and probably most, heavy users of the platform a monthly fee

That's going really well so far... https://twitter.com/elonmusk/status/1587312517679878144

I would absolutely be willing to pay a monthly fee for a Facebook that wouldn't serve me ads or "suggested" things in my feed, and only showed me things that I explicitly said I was interested in. I'm curious how much I'm actually worth to FB under the advertising model, since that's going to dictate how much fee they would need to ditch advertising.

Follow the money not the tech for this story.

Facebook sold to individuals as a workforce automation platform for teenage girl relationships-as-a-pattern that anyone can use, AND double dipped selling to biz and gov as a propaganda outlet and that makes huge revenue until people get tired of it, disillusioned, and move on. It seems to mostly be bots and addicts now, I wouldn't go there in 2022, to actually socialize or be propagandized to.

Meta's story is "lets do the same thing over again but technologically more complicated and expensive" No Facebook enduser ever wanted to do the same stuff as FB but requiring a more expensive graphics card or shorter battery life. Meta doesn't seem to have a purpose to endusers. To technical people its an interesting challenge, but to end users its this generation's superconducting supercollider. "Well it burns stacks of cash to entertain techie people and nobody else cares". Best of luck with that biz model...

You’re right to say follow the money, but you didn’t actually do it. Revenue is basically flat. Ad impressions up around 20% this year. Engagement is not going down. Meta stock is down 70% this year because mark just said he’s going to lose 15 billion on reality labs next year even though ever single investor is saying that number is at least 5x too high. Investors no longer trust mark has their best interest at heart.

I've honestly hated this "social graph" mentality from the beginning. When I install your "app" I don't want everyone in the world to know and contact me now. Obviously I'm in the minority, but with some say changes to the "social graph" that puts me in control, you could actually grow your market to include people like me.

facebook is bad because it is run with an iron fist by a single person. Eventually Zuckerberg was surrounded by yesmen.

This is almost impossible to avoid. With wealth inequality on the rise, the yesman industry has developed a lot of tradecraft that has made them better at the extraction of that wealth.

This creates mania, and with no oversight, the entire company is subject to his manic whims.

I'd like to think this is the final nail in the coffin in dual stock structures, but of course the next great growth company will be built somewhere sometime, and the public markets will be desperate to get a piece and will do whatever it takes to make that happen.

Strange. I think Facebook is bad because they've turned a decent, useful product into a cash-generation machine... to the detriment of the original product. So much so that many have decided that it's not worth dealing with the cash-generating cancer to access the compromised functionality of the core product.

Zuck is in a unique position where he has full control over Facebook. He could declare today that Facebook doesn't need to generate this much profit, add an option for a chronological news feed, and turn down the ads to "KTLO" level from the current "fund the metaverse, maximum profit" levels.

I loathe Zuck because he refuses to do anything like this, despite the obvious social ills of Facebook. Maybe corporate yesmen have something to do with his choice, but it seems more likely to me that Zuck has decided to keep Facebook a cancerous mess all on his own.

My coworker just told us a story in this morning's meeting about signing up for Facebook. He created an account about a week ago, but didn't upload anything, post, or put in any optional information. Yesterday he received an email notifying him that his account was suspended because it 'violated community guidelines'. The just lost what would have been a new customer, over what, exactly? Who knows...

Zucc knows what he's doing. No investor was ever going to love the $40B capex on metaverse, they would happily ride the Facebook cash cow into the ground and suck the life out of the company dividend by dividend. Zucc just doesn't care about the quarterly reports, he's going to execute on his vision regardless.

Never liked Zuckerberg, but you seem correct. Facebooks trajectory was pretty obvious. Creating a TikTok clone or such would just be chasing your own tail. The only real future for Facebook is something new. It's very high risk, and can rarely be done in a public company the size of meta, but he positioned himself to make it possible. Time will tell if this bet was good (for him, for us I'm pretty sure a successful metaverse is awful)

Zuck's vision is btw directly taken from an explicitly dystopian narrative of how VR tech could play out. It is a vision that would be a net positive for humanity if it failed (and its fate is btw not tied to the success of AR/VR tech in general - it's quite conceivable that the one takes off without the other). It's driven by greed for money and power, and it is quite ironic that it happens to be Wall Street that's delivered the strongest negative verdict so far (which doesn't mean that it has to fail, btw - I was short Meta since they announced this vision, but I might consider realizing those gains soon).

Why is it binary? Why is 40B capex going to make it a reality and 30B/20B/10B not?

To be clear, I don't think any amount of money will make it work, I don't believe in the vision. My point is only that Zucc is not the hapless dolt the article sort of makes him out to be.

Levy is suggesting Meta break into FB “OG” and Metaverse. It sounds a little like an amputation where a limb has developed gangrene. I’m still not sure the patient will survive. And not even sure which is the patient and which the limb.

Zuckerberg could help meta by retiring.

It would be interesting to know why Mark didn't choose this option because Alphabet had already structured their company exaclty like this, separating Google from Other Bets, and so there was a clear precedent from a peer. Did Mark ever explain why he thought this was the wrong path for the company?

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