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Facebook’s core business model appears to be in decline. They don’t have a very diversified revenue stream despite trying various side businesses. This is the m

• fleddr 5y ago
  "Facebook’s core business model appears to be in decline" How so? Revenue is up and there's more users. What decline are you referring to? People have expressed Facebook being passe or not cool for a decade now. They keep growing anyway.
• mjfl 5y ago
  > Facebook is betting the farm on the metaverse stuff and it's an odd bet.
  • JCM9 5y ago
    There’s a whole bunch of geriatric millennials out there remembering what happened to second life. With the pandemic letting up the last thing people are going to want to do is live in some virtual world. Fresh air is the new black.
    • quickthrowman 5y ago
      How could anyone ever forget flying penises pelting Anshe Chung in the face during a CNN-sponsored Second Life ‘town hall’? Anyone expecting something different from the ‘metaverse’ is living in a fantasy world. Porn companies and sex workers will make money in VR environments, whether mainstream companies can remains to be seen.
    • spookthesunset 5y ago
      Yup. All I see is second life v2. (Third Life?)
  • dymk 5y ago
    I've been using a roommate's Quest 2 for a few days. A few years ago I was using an OG Oculus. The Quest 2 is so much staggeringly better in every way. So much so that I can see a future where people are spending hours in VR games rather than hours playing games on a monitor. Yes, there are issues to work out with the headbands, weight, general FPS and battery life, but I finally _get_ it. The amount of badassery you feel as you shoot headcrabs and combine in Half Life: Alyx is hard to describe in words. Maybe that's not Metaverse persay (is that like, VR chat or something?), but it is the equipment that Facebook is selling, and they've got their own set of games that're pretty fun too.
    • jmknoll 5y ago
      I’m with you on this. I received a Quest as a Christmas gift and basically went from 0 to 100 on VR and the Metaverse. It finally makes sense to me. Like you say, there are some issues with the tech, but they’ll be resolved in time, and it’s clear that this is the future of gaming at least, and maybe much of social media/virtual interaction.
      • YXNjaGVyZWdlbgo 5y ago
        The problem is that the problems are mostly the same problems we had since 2012. I am not sure if we can really address them without new breakthrough technologies.
      • magicjosh 5y ago
        Wow what are your favorite apps? And a bit more leading question, what apps have you used in the last week?
        • dymk 5y ago
          In no particular order (well, except for Alyx, which is the gold standard)... - Half Life: Alyx - Lucky's Tale - Beat Saber - Thumper
        • Arainach 5y ago
          Not OP, but I also picked up a Quest 2 and was impressed after finding all previous VR experiences I'd tried gimmicky and not holding my attention for long. Lately I've been sinking time into: Half-Life Alyx I Expect You To Die (and its sequel) The Climb (and eventually its sequel, I assume) Creed
  • xkfm 5y ago
    I think it'll play out in five to seven years. I'm also in the group that bought a Quest 2 over the holidays and am really, really, really impressed. It's very close to being more than a novel experience. Immersed works well, but because of the res of the headset, you can't actually see any more text than you would on your monitors in real life, the monitors are just bigger. For games, FPSes and driving games seem to be "solved", but almost every other genre still needs work. Basically, if a game genre is normally played first person, it'll work well in VR already. Movies, TV, manga/comics are there too. I'm at the point now where I don't plan on buying another monitor unless I absolutely have to. I should note that I only play multiplayer experiences with PCVR because I'm afraid of getting banned for whatever reason and having my headset bricked. That's one area I'm worried about, but it's not related to the hardware/technology.
  • JKCalhoun 5y ago
    I'm all in if they get behind the power glove.
• rossdavidh 5y ago
  Exactly, and unlike, say, Google or Apple, I don't think Facebook has really ever had more than one big payoff idea. If that core business model/idea has seen most of its growth, and may even decline, then there is really not much reason to expect it to find any other way to keep growing. They are big, they are profitable, but they are not going to be growing fast in the future, and one could argue should be valued (in terms of earnings/share) more like a utility or a consumer commodity manufacturer, than a technology firm.
  • Miraste 5y ago
    > unlike, say, Google or Apple, I don't think Facebook has really ever had more than one big payoff idea. Interestingly, by revenue Apple is more of a one-trick pony than Facebook. iPhone sales are fully half their revenue, and almost all of their software income is totally dependent on iPhones as well. Meanwhile at Meta, Instagram revenue is roughly equal to Facebook revenue.
    • NovemberWhiskey 5y ago
      The social media website/phone app company gets half its revenue from one of its social media website/phone apps? Feel the diversification!
    • oblio 5y ago
      And Google is 90% ads. OP wanted to use "cool" companies as examples but the actually diversified giants are Microsoft and Amazon.
      • sniperjzp 5y ago
        It’s 81% to be precise according to it’s Q4 earnings.
      • colinmhayes 5y ago
        Saying Google is "just" ads seems a bit disingenuous. Google controls the entire stack for ads, from the all important search, to Google network and YouTube, all the way to operating systems and the browser. That last part is important because Facebook got absolutely fucked by apples privacy changes on iOS. Google has diversified, but more importantly they're not reliant on another company's users.
• paulpauper 5y ago
  They don’t have a very diversified revenue stream despite trying various side businesses. Google and Microsoft have had the same business model forever .
  • JCM9 5y ago
    That’s not necessarily a problem if the future of the cash cow looks bright. Facebook’s problem is that the cash cow is looking rather ill with nothing clear to pick up the slack. Also the business model of GOOG and MSFT is far more diversified than FB.
  • that_guy_iain 5y ago
    > Google and Microsoft have had the same business model forever . Microsoft has Xbox, Office, Azure, etc. Google has Android, Google Workplace, GCP, etc. When you diversify your income streams you add more. It doesn't mean you get rid of your breadwinner. Facebook's main model seems to becoming illegal and/or not viable via a tech perspective.
    • kergonath 5y ago
      > Google has Android, Google Workplace, GCP, etc. Alphabet is more than 80% advertising: https://searchengineland.com/google-q4-2021-earnings-379735 https://searchengineland.com/google-q4-2021-earnings-379735 . They are good at skewing how they are perceived but they are very close to being a one-business company. Not defending Facebook, but Google is not much better.
      • endisneigh 5y ago
        Their "ads" are driven from more sectors than Facebook. Whatsapp has no ads, so it's basically FB and Insta
        • kritiko 5y ago
          FB has Audience Network which extends their targeting off platform. But yes, Google’s acquisition of Doubleclick and investment in video through YouTube has allowed them to capture the publisher and buyer side of much of the open web (and use the data to cut out competition - cf. Project Bernanke)
• p1necone 5y ago
  I don't get metaverse - they seem to be throwing lots of money and people at it, and hyping it up like it's the future. But from what I've seen so far they've just built VRChat, but worse. It's been done before by other people, it's not a new thing at all (Second Life released almost 20 years ago). This isn't a project that benefits from any of Facebooks strengths - game development companies are much better positioned to make compelling social VR experiences like this. "Metaverses" in general are a cool 80s sci-fi novel concept. But they're just video game environments with better-than-typical communication features - hyping them up with piles of marketing and betting the farm on your specific one being successful seems like an incredibly poor business move.
  • jsemrau 5y ago
    You are absolutely right. Looking back at the days of Mafia Wars and Farmville. For these games social was a core aspect of their success. Now Roblox, Minecraft, and Fifa have incorporated similar features already. In 2022 it's not that hard anymore. So, what would FB's moat be? How large is the overlap between FB's current customers and new Metaverse customers?
    • potatolicious 5y ago
      Agreed - if anything FB has a harder fight than folks like Fortnite, Roblox, and Minecraft. FB is really noncommittal about what a metaverse product would even be, which can be interpreted either as secrecy... or they just don't know themselves. From the little we've seen (notable that it's 100% CGI concept reels and 0% anything concrete) it really does seem like just social spaces. One thing the game studios have figured out is that simple chat is insufficient - Roblox, Minecraft, Fortnite have all developed genuine social spaces that center around some activity. FB's metaverse concept seems to have no unifying purpose and lacks some compelling purpose that the games do. To the extent these necessary unifying activities are discussed it's usually hand-waved away as something users themselves will concoct. More generally, it seems that FB wants to be the substrate of a new social network - but it's not clear to me that that's what anyone wants? What's the role of FB as a platform when "VR socialization" can just be apps on a device - in which case FB's role is solely that of a device/OS vendor, which clearly is insufficient for their ambitions? What does FB bring to the table that Roblox, Fortnite, Minecraft, etc, would care about? If socializing in VR is going to be a thing (big if, but let's assume for a second), why would I go to FB? Why would I not directly go to any number of apps and vendors who have created focused products? I don't need a single unifying platform when I can just... install a number of different ones?
• poisonborz 5y ago
  > Facebook’s core business model appears to be in decline. If you mean the data mining and trading, I wouldn't believe that for a second. Sure, it can't go on so openly and monopolised like before, but there is a huge industry built on it already, each new digital service opening up opportunities for a bit of side income. Facebook was an easy target to aim at - but there's your webshop, food delivery service, electricity supplier in the line.
• chaostheory 5y ago
  > Facebook is betting the farm on the metaverse stuff but without meaningful financial results that’s not going to placate market concerns over what looks like a downhill future for the core businesses. Unless Zuck can pull a Bezos with convincing investors, Meta's stock will be in trouble for a few years until their metaverse division starts becoming profitable; which will be at least a decade if they're focused on growth.
• paxys 5y ago
  Disagree about them "betting the farm" on metaverse. They may be throwing some advertising dollars behind it, but it is clear that the bulk of their efforts are still focused on their core apps (Facebook, Instagram, WhatsApp) and the competition with TikTok. I doubt the product and engineering teams are as invested in metaverse as Zuck wants the world to believe.
• foolfoolz 5y ago
  because the killer feature of facebook is staying in touch and meeting people. the path to monetization and revenue burned those features and overloaded them with spam and shit no one wanted. it got to the point where people stopped using facebook to meet and stay in touch with people a similar pattern is happening on instagram although to a lesser degree the metaverse bet is a good one to try and make something new where the value requires you to be on the fb platform. we will see if it works. i personally don’t see it going anywhere