Early this month, I attended the meeting of Turkish IT NGOs. It is a group that gets together every month for more than a decade to maintain “solidarity in the IT sector” In the last meeting, someone in the group approached me and said, “shall we talk about the Metaverse, though I have no idea what it is.” That is the case. Its attractive name makes you feel as if you will lose something if you do not take part.
I said: Metaverse = LifeBuoy
Metaverse has been pretty popular ever since Mark Zuckerberg launched it last October. Every day, at least 1 out of 10 press releases refers to Metaverse relevantly or not.
However, the idea of a virtual world is not new. “Second Life” in the 2000s was that kind of application. The idea is even older. The term came from famous science-fiction writer Neal Stephenson’s 1992 book Snow Crash where Stephenson defines Metaverse as a virtual world inhabited by avatars of real people.
It’s also been featured in movies. The first (1982) and second (2010) Tron movies deal with the idea of getting into the game (computer) and living there. I put the video below. The latest 2021 movie Ready Player One is also alike.
Facebook took this idea and introduced it as a new idea to the market because its position is critical.
So Why is the Metaverse a Lifebuoy?
Last week, the quarterly outlooks of companies were announced in the USA. Shares of Facebook’s owner Meta fell short with its quarterly outlook as its stocks plummeted 26 percent at once. The company lost more than 232 billion US dollars of market value.
It is noted that this is a world record loss, the biggest loss of market value of a company in the world. Moreover, the decline has continued since then, and today its market cap stands at 590 billion Dollars. On September 7, 2021, Facebook’s market cap peaked at 1,078 Trillion Dollars.
But why did Facebook’s market cap and shares drop, and how does that relate to Metaverse?
Why Google And Facebook Don’t Want To Show Which Data They’re Looking At
This title was precisely the title of an article I wrote a year ago. The article describes Facebook and Google’s efforts to prevent ATT (application tracking transparency), which Apple will deploy in the new version of the iPhone’s operating system. Arguing in a true way that iPhone users should have control over the applications installed on the phone, Apple activated this system called ATT in April 2021 with iOS 14.5. Thanks to this application, users can see which application was accessing what type of data. For example, some applications have access to data from mobile banking applications, even though they do not have the right to do so.
That’s what both Facebook and Google are trying to hide from their users. Thus, before the introduction of ATT, Facebook repeatedly put forward the idea that ATT would hinder the marketing of SMEs (did not say that the advertisers would advertise less, that is, it would make less money). This is a common excuse. They placed advertisements in the biggest newspapers in the USA that the income of SMEs would decrease continued lobbying. It came to the point that they launched a website where counter-opinions were published, calling it the voice of SMEs, etc.
Google, on the other hand, has moved to do the same through developers, telling them, “You’ll make less money from Apple (ATT) (in other words, you’ll be given fewer ads on iOS)” . (However, Google will go in a different track related to user privacy, this is another story which announced last week)
Facebook Can’t Earn Money If it Can’t Get Data from Users
We, users, were trying to understand what this ATT does. Because we recklessly scatter our data here and there. The ads Google and Facebook served to us based on our data from our mobile phones. Google and Facebook can also sell fewer ads if we provide fewer data. That’s the whole point.
Facebook’s record loss of market value already shows how valuable our data is. That means personal data is worth lots of billions of dollars.
After ATT launched in April, Facebook realized somewhere in the middle of the year that its revenues were affected as expected. Bloomberg covered the issue with the headline “Facebook users said no to tracking, advertisers are panicking”.
Direct response (DR) advertisers (buyers with filters) have seen performance drops in their Facebook ad campaigns due to the impact of ATT on targeting, measurement and attribution. Advertisers using Facebook for brand promotion, on the other hand, were affected less or not at all because they did not use personal data.
Need For a Lifebuoy
In addition, in the light of various scandals and emerging information, it was reported that the number of daily Facebook users fell for the first time in the company’s 18-year history. In the last five years, especially young people have avoided Facebook. In this declining trend, Facebook has no word in mobile phone ads. App Store (iOS) and Google Play (Android) manage ads (more precisely, apps). This is why there is a need for a Lifebuoy.
Facebook’s ad drop is only valid for iPhones. Android (Google) is still targeting, but the problem is; iOS users spend more money.
But it has been a win for Google, which has its advertising platform. Some, if not all, of the ads that escaped from iOS due to ATT came to Google Play. In a way, Google took what Facebook lost. So much so that a 33 percent jump is mentioned in Google.
That’s what Metaverse means for Facebook: it has to create its platform. You can see everyone is ready to get a space on the platform. So pretty obviously, Facebook plans to get back its lost advertising revenues thanks to Metaverse.
For Whom the Bell Tolls? For Facebook?
Users, especially young, began to avoid Facebook. Data leak scandals were exploding, movies like Social Dilemma showing how data can be misused, whistleblowers like Frances Haugen describing internal abuses, most notably the US Senate inquiries sparked by the Cambridge Analytica disgrace.
Zuckerberg needed to get himself and Facebook out of this mess. First, he hid Facebook’s name and took him in the back of a newly created company called Meta. Then the Metaverse emerged.
So even though it’s been stated that Metaverse has been in development since 2018, it seems like it was only recently that Zuckerberg heard the bells. He’s already quickly describing the amount of money he’ll spend on the project and the number of staff he’ll hire, so Metaverse will probably be taken more seriously.
Is Facebook’s Metaverse Achievable?
Metaverse is a project that does not only belong to Facebook. But generally, people do not yet understand what it is. Like technological idioms that I sometimes think are put in too obscure, this one gives off the air of something mysterious. But the summary; this is an ad selling-monetization platform.
A platform for whom? Those on the platform will try to reach them by catching Facebook’s current customer potential and the young audience expected to attract new ones. In return, the advertising or platform fees they will pay will make Facebook rich. Maybe it will increase the market value, which has fallen by half today, again.
Is this achievable? It’s possible. But I consider Second Life or FarmVille madness. When I called a Farmville friend in those days, I heard the sentence “later please.. I need to water my vegetables, I’ll call you soon”. That was like a pandemic. But what happened next? These platforms were abandoned with the speed that everyone was adopting. Games or platforms are going to rise and then be out of date. Then being left, Facebook’s loss of members after 18 years shows. Is it just a fad in the Metaverse?
In the meantime, let me note again that the data of people who enter Metaverse excitedly will be sucked well. You know, the data that Facebook is uncomfortable with “showing how much it is used by Apple”. I am reminding this again.
