meta platform CEO Mark Zuckerberg told CNBC’s Jim Cramer on Wednesday that the Metaverse could be a bigger part of the social-network operator’s business in the latter half of the decade.
“We expect basically about a billion people in the metaverse doing hundreds of dollars in commerce, each buying digital goods, digital content, different things to express themselves, whether it’s for their avatar. Be it clothes or different digital goods for their virtual home. Or things to decorate their virtual conference rooms, utilities to be able to be more productive in virtual and augmented reality and in the metaverse as a whole,” They said.
Investors have halved the company’s market capitalization this year growth has slowed And the number of its daily active users has declined sequentially for the first time between the past two quarters. Zuckerberg increasingly sees the company as the next generation of content, a virtual world where people can buy and sell digital clothing and other items for avatars that can communicate with each other. Earlier this month the company’s ticker symbol changed from FB, a relic of its history as a pure social media provider.
But the company’s investment in augmented reality and virtual reality dates back to 2014, when it paid $2 billion for headset maker Oculus VR. Headset is in shipment failed to outnumber Shipment of PC or Smartphone. Zuckerberg expressed optimism about the performance of his current-generation Meta Quest 2, which starts at $299.
“Quest 2 has been a hit,” Zuckerberg told the “Mad Money” host.
“I’m really happy with how it’s gone. It’s exceeded my expectations. But I still feel it takes something to reach the scale of many hundreds of millions or even billions of people in the metaverse.” It’ll take time, just because things take a while to get there. So that’s the North Star. I think we’ll get there. But, you know. The other services we run today are already on a somewhat larger scale. Huh.”
Zuckerberg said experiences in the Metaverse can be more impactful than text, photos or videos, which are widespread on Meta’s Facebook and Instagram, and so will be a big topic for Meta over the next decade.
Zuckerberg met Kramer in the Metaverse. The Facebook co-founder said such experiences can foster a feeling of being together, even when people are physically on the other side of the country. He said it is possible to make eye contact, which is not guaranteed on a video call, and use spatial audio that allows for quiet side conversation.
The technology “basically combines it to provide a real sense of presence,” he said.
Meta will have to release a plethora of hardware, software, and experiences to bring it to customers over the next several years.
“We’re at this point in, you know, a company that can make some big long-term research investments, and that’s a big focus,” he said.
The economy around the metaverse is expected to be massive, he said.
The Meta Platforms had 3.64 billion monthly active people in its family of applications first quarter, up 6% year over year. WhatsApp reached 2 billion users in 2020, and this is also an area where Zuckerberg sees potential for growth.
“You know, over time our playbook is building out services, try to serve as many people as possible – you know, get our services to a billion, two billion, three billion people, and then We basically measure monetization after that,” Zuckerberg said. “And we’ve done that with Facebook and Instagram. WhatsApp is really going to be the next chapter, with business messaging and commerce being a big thing.”
In addition to its Metaverse spending, Meta is investing heavily in the development of artificial intelligence, which could boost advertising — the source of about 97% of revenue — and the company’s existing applications, Zuckerberg said.
“We’re basically shifting most of the content you see across Facebook and Instagram from following your friends or graphs, now you know, over time, more and more of that content only comes from AI recommendations. It is,” Zuckerberg said. “And as AI recommendations get better, you get access to not only the content of the people you follow, but the entire universe of content that is out there.”
It’s a concept that China’s ByteDance-owned TikTok inspired itself One billion monthly active users, Meta sought to respond to rapid growth with the introduction of Instagram’s Reel Feature in 2020. Reels make up a fifth of the time people spend on Instagram, Zuckerberg told analysts on Meta’s first-quarter earnings call in April. Now he hopes that AI enhancements will make Reel more attractive to Instagram’s users.
“Our AI system can choose based on what it knows about you and what you’re going to be personally interested in and what you want to see,” he said. “So as we get better at that, you know, our engineers are improving the models every week. We do some checks and you know, the relevance goes up a few percent. And then we repeat and the next week Let’s do that. And, you know, that’s a big part of what I’ve always focused on running this company, is gaining momentum very quickly, so we can improve that quickly.”
— CNBC’s Jonathan Vanian contributed to this report.