Annus Horribilis by Mark Zuckerberg – TheStreet
The year 2022 was to be that of Mark Zuckerberg.
The 38-year-old billionaire appeared to have put the Cambridge Analytica scandal behind him, which had tarnished Facebook’s reputation. The social network had allowed the consulting firm, which had partnered with Donald Trump’s campaign team before the 2016 presidential election, to collect private data from tens of millions of its users which allowed it to profile the voters.
The king of social networks was ready to write a new chapter and launch Facebook into a new economy still little known to the general public: the metaverse.
Relying on the power of his empire, Zuckerberg was convinced that he and Facebook alone could bring this young industry, focused mainly on the virtual world, to the masses. For skeptics and detractors, the billionaire has changed the name of his company to Meta Platforms (META) . He thus held his next big thing.
From Triumph… to Fall
The stars were all the more aligned as the crypto hype grew. Crypto is one of the key elements of the metaverse. And to top it all off, Facebook had managed to enter the very exclusive club of companies valued at more than 1,000 billion dollars on September 7, 2021.
Now, just over three months from the end of the year, Zuckerberg’s dreams seem to have turned into a nightmare. Meta shares have fallen 58.2% to $336.35 since January. The company’s market value fell by $585 billion. Meta isn’t even in the Top 10 most valuable companies in the world anymore.
As for Zuckerberg, his fortune has largely melted away. He is no longer one of the lords of Silicon Valley. He was worth $52.6 billion as of September 23, according to Bloomberg Billionaires Index. Zuckerberg thus leaves the ranks of the Top 20 richest people in the world.
He is now just the 22nd richest person in the world, almost a sacrilege for one who was still worth more than $125 billion in January. His fortune has shrunk by nearly $73 billion since January. This is the largest individual drop among the top 500 billionaires on the planet this year.
As for the Metaverse, the jury is still out on whether it will truly become the new big thing. Nearly $16 billion has been invested in it, but for now it remains a sinkhole for losses.
Reality Labs, the division that hosts Metaverse’s blueprints, posted an operating loss of $2.81 billion in the second quarter. In the first half, losses amounted to $5.8 billion. In 2021, Reality Labs posted a loss of $10.2 billion.
Can Zuckerberg change things?
But the billionaire continues to ask for patience.
“I’m even more confident now that the development of these platforms will unlock hundreds of billions of dollars, if not trillions of dollars over time,” Zuckerberg told analysts on the second-quarter earnings call in April. last July. “Because it’s obviously a very expensive undertaking over the next few years. But as the metaverse becomes more prominent in every part of how we live, from our social platforms and entertainment to work, to education and commerce, I am convinced that we are going to be happy to play the part in building [it].”
Zuckerberg is set to unveil the next generation of the Oculus Quest (now called Meta Quest) virtual reality headset on October 11. He and Meta are betting big on this helmet, which is the only thing in the metaverse that seems to work for the company.
The Meta slide, however, rekindles criticism and doubts about Zuckerberg.
“I don’t think Facebook is going to do well while it’s here,” said Bill George, a leadership professor at Harvard Business School and former CEO of medical technology company Medtronic. (MTD) , told CNBC. “He’s probably one of the reasons so many people are turning away from the business. He’s really lost his way.”
The horizon looks bleak for Meta: competition has intensified in advertising with TikTok, which is stealing market share from it.
Apple (AAPL) seems to have given the final blow to the company by giving iPhone users control over which apps are allowed to track their movements on the internet and social media. Basically, it becomes very difficult for Meta to serve targeted ads to its billions of users.
Finally, the crypto industry is in trouble.
The question therefore becomes: where to turn?