Great to see the beginning of the end of Meta / Facebook with their first revenue miss.
Hopefully their metaverse play is a costly fatal distraction that will ultimately lead them to lose more money while lots of people run away from using their platform.
The fact they are ruining their own product [0] to compete with TikTok shows that they have completely run out of ideas.
They are still a very powerful part of interpersonal communication - friends and family.
The only way forward is for them to kick out Mark, stop the insanity that is Metaverse, focus on their core and play nice with the platforms and regulators.
> The only way forward is for them to kick out Mark
It might be hard to convince him to give himself the boot, especially while the company continues to make gobs of money. Maybe we'll see a compromise where the company starts paying a dividend and Zuck shovels the rest of the cash into his passion project.
From a less cynical point of view, they have basically bet the farm on "Metaverse." They can no longer buy out competitors (the FTC will block them), and they need a new monopoly to keep printing money. If they can make even a moderate success out of the metaverse project, they can get out of the hole. If they can make a massive success of the project, they will easily be the new Apple. However, I'm not sure that a recession is the time for a mega-cap company to start spending a lot on a new uncertain project.
> If they can make a massive success of the project, they will easily be the new Apple.
In what way? If Facebook wanted to replace the iPhone with some "metaverse" device they would need to be able to build a device way more advanced than their current offerings at a price point equal to or less than the iPhone. That means they would need to make up for thousands of person years of engineering, manufacturing, and operations expertise that Apple currently has.
You're basically saying "If Facebook could build a copy of Apple from scratch and make some compelling products, they could be the next Apple". Samsung is an industrial behemoth and just keeps up with Apple.
Not only is that unlikely it doesn't even sound possible.
Bingo! I'm always astonished by the amount of cluelessness displayed by HN crowd -- supposedly at the cutting edge of things. Like all other platforms, about 5% of the posters at HN provide extremely valuable content. The rest just parrot current popular pitchfork (anti-capitalism, anti-corporate, anti-advertisments -- stuff that I can get from TikTok in a more entertaining format).
It's not an anti-capitalism stance to call Metaverse idea for what it is - trying to sell an elephant. Capitalism is not about going all in on the craziest ideas ever.
What is their bet anyway? What users' need are they trying to address or create?
Is this a new and better video game platform? Even if they are successful, VG are still very niche, especially compared to their social network user base.
Is this a new way to consume content? Sounds a bit fussy to me to have an extra device or two just so you cannot turn away when they run ads. People still are not that eager to put on 3D glasses to watch a movie.
Are they betting that in the nearest future the reality is going to suck so bad that people would want to escape it? That's just bleak.
What else? Realistic porn? Virtual learning? That's peanuts.
Is this going to be augmented reality instead? Some kind of wearable device? We already played with google glass, did not catch on. Plus regulation in many countries already caught up, so you cannot just wear video recording device whenever for example.
Who are the end users? Who has hours of time to consume uninterruptedly whatever content they can provide in their Metaverse? Certainly not the people who has money to spend.
In the end it's an adversarial design to capture all users' attention for prolonged periods of time, the pay off for the user has to be astronomical.
I'm not on board with VR, but I think that the sales pitch is very clear and you are missing it.
It is Roblox. It is a collaborative building environment where the content that people create and share for one another is the interactive world rather than text, photos, or videos, done through VR rather than traditional computing.
This is the first time I am hearing about Roblox, looks video games adjacent to me. Meta would not be able to convert their billions of users to a similar platform.
They have to convince users to give up the time they spend now elsewhere on this experience. I suppose it has to be insanely addictive and rewarding, and also it has to have no barriers of entry.
I am just not seeing it in the Metaverse. I mean people gave up the horizontal video format in order to easier consume media, and Meta is trying to convince everybody that people would wear or implant (?!) a devices to have better fidelity video experience? The entertainment value is just not in the resolution and collaborative content creation is already possible without Metaverse and is niche.
At this point I consider the Metaverse idea just smoke and mirrors to convince investors that they have the next best thing with 30% year to year revenue growth. I don't think Meta would go anywhere soon, they're just hitting the ceiling of easy money they were making and now it's getting harder to have such margins.
> What users' need are they trying to address or create?
They're essentially trying to _create_ a new need in the minds of consumers, I think.
The trouble for them is, this rarely works. This is quite different to, say, the iPhone; when the iPhone showed up, the market was already inclined to think "it would be nice if there was a good phone that could do more stuff than my Nokia"; it wasn't specifically demanding an iPhone, but an iPhone was a good solution for what it was demanding. It's not clear that anyone is demanding a 'metaverse'.
I'm reading HN because of the top 5%ile original thought leaders and ideas that I still get out from them.
The FB discussion isn't about anti-capitalism. It is the general theme of HN.
Like most HNers you are lacking imagination in what VR will do. Just like everyone who poo-poo'ed what is possible from Computers, Internet, Mobile Phones.
Yeah before iPhones, we already played with Palm Pilots and Microsoft CE hand held devices.
End users are all of humanity (minus some stubborn Luddites. But you never invest / build strategy around luddites)
If VR helps you master skills better, help firms to be more productive, that in itself is a good enough use case for everyone to use VR
The fact that VR systems can provide experiences closer to reality means the applications are boundless.
> Like most HNers you are lacking imagination in what VR will do. Just like everyone who poo-poo'ed what is possible from Computers, Internet, Mobile Phones.
You seem to make a lot of these sweeping statements. They're full of stupid assumptions and generalities. It's a boring shtick and I'm not really seeing you back it up with your dizzying intellect.
Besides being casually insulting to a huge group of people you don't know, it's also a profoundly stupid assertion.
There's no subset of people on HN that at any point poo-pooed computers, the Internet, or mobile phones. A significant population here have been involved in building those things. You're trying to assert that because someone isn't fawning over wide eyed promises of some technology they're some sort of backwards Luddite.
History is littered with technologies that did not revolutionize the world. There's little guarantee VR isn't going to end up in that heap. It's had a lot of promise for decades. It's got fundamental technological, ergonomic, and physiological problems to overcome before it's going to be attractive to anyone but enthusiasts. Even then there's no guarantee that it will take off in a significant way. Even if VR takes off there's no guarantee and little indication that Facebook's vision of VR will take off.
I've observed users of Usenet, Slashdot, HN -- a self selected group of smart people.
I was there when engineers of the 80s/90s poo, poo'ed commercial success of the internet.
I was there when engineers of the 90s poo, poo'ed iPhones (it's just a drive with a phone jack that can make calls)
I was there when engineers of the 00s poo, poo'ed Twitter, Instagram
Yes, I have sufficient data to safely conclude that smart people close their mind pretty early in their life (A curse of intelligence). There is in fact plenty of research around this. That's why you end with Grammar Nazi's, Language Nazi's, Social Media Nazis.
Very few escape the curse of intelligence (why would they? They pretty much get a cushy job and can lead a comfortable life with their blinders on).
> I was there when engineers of the 80s/90s poo, poo'ed commercial success of the internet.
> I was there when engineers of the 90s poo, poo'ed iPhones (it's just a drive with a phone jack that can make calls)
>I was there when engineers of the 00s poo, poo'ed Twitter, Instagram
A good portion of HN was also part of all those conversations, I know I was. Suggesting the zeitgeist of any of those fora was poopooing new technologies is ridiculous. The fact those fora were enabled by those technologies should tell you that your position is absurd.
You've created a strawman out of a fantasy cohort of technology enthusiasts ignorantly poopooing technologies. Because you can easily beat up your strawman you seem to have convinced yourself of your own superiority.
Maybe you should take your passive voice casual insults to some other forum. Go wow them with your Brobdingnagian intellect. Your valuable insights will be sorely missed but you're wasting your time here.
No, I'll stay here. I've always made the best investment when I bet against usenet, slashdot and HN 'popular' opinions.
One day HN will be irrelevant, as the true value creators will move on to something else. As a superior prognosticator, I'll know when and I'll leave ship.
Psh, hacker news is chock-full of clueless nincompoops. The original post saying “au Revoir” to facebook, lol. They actually think that facebook will be gone.
The word "if" is going to throw a disc with all the heavy lifting it is doing in that statement.
If Facebook can solve all these huge technical hurdles they need to do so in an affordable device. Then they need to develop the operations capacity to actually build and support them. Then they need to make a compelling experience that normal users would actually want.
Facebook does not have a history of executing on those things. They also don't look like they're making any moves to be able to execute on those things.
The best numbers I can find for the Quest 2 are five million sold last year with 4 million recalled. The current XBox is estimated to have sold around 13 million units. Even if the Quest's sales have kept pace this year so has the XBox. So your claim sounds suspect.
You'll also note 5 million is a twentieth of Apple's iPhone sales. So even if Facebook solves all of their other problems they have to ramp up production 2000% to "replace" Apple.
That is a heavy fucking lift from where they are right now. When the iPhone was released it did what dumb phones did and then some. It's killer apps were the media playback and the Internet. Facebook has yet to demonstrate a killer app for their VR.
It seems like they need about 5-10 big fundamental improvements in technology to make the headsets work well enough for consumers. In the next 5-10 years, it's very possible that this bet will pay off.
>> If Facebook wanted to replace the iPhone with some "metaverse" device they would need to be able to build a device way more advanced than their current offerings at a price point equal to or less than the iPhone.
Once upon a time Apple was a much smaller company. They strategized to one day have something they called a "dynabook". Their first attempt, the Newton was not good at all and much too expensive.
Yeah as much as I hope they go the way of the dodo I think they're far too big to die soon. MySpace wasn't anywhere close to their size when it died. That being said it doesn't mean we can't hope and pray for such things. ;-)
It’s not the snarkiness. It can be snarky if it also adds to the conversation. There wasn’t really anything people could say in repose to your comment that was relevant to the topic.
Don't be, for the last decade or so money has been extremely cheap.
For anyone focused on fundamentals many of these companies don't make sense and it all seems eerily similar to the dotcom logic (anyone old enough will remember claims of "new economy" and "things are different"), but for anyone interested in growing their money, spending more than you make while money is essentially free makes a lot of sense.
The thing many people still don't understand is that the era of cheap/free money is coming to an end and there is going to be a lot of reality coming to surprise companies that aren't actually able to become profitable in an era without free money.
This doesn't just impact companies that currently don't make a profit, but those that make their profits from other companies that don't make a profit. How much AWS is paid for by startups that don't make a profit? How much of meta's ad revenue is ad-spend from companies that don't make a profit?
Revenue only down 1%. Their operating income went down because they hired 20,000 people. They can fire them whenever they want and be right back where they were profit wise. Their content is still free to them unlike Netflix after all.
Comparing to 2021 can be misleading because the Covid year was a strange anomaly for digital businesses. That kind of profits may be a long way off for most of them.
Meta's operating income (i.e. profit before taxes and interest basically) for this past quarter was $8.3 billion. That's roughly the same as Exxon did in its Q1. "Au revoir" seems premature when they're still raking in that much cash.
TikTok is the most used app. It has more users than Facebook, WhatsApp, or Instagram. It doesn't have as many users as the sum of the user totals of the three big Meta apps, but WhatsApp users aren't really monetizable, and there is a lot of overlap between FB users and Insta users now.
The present state doesn't matter much though? At least, doesn't matter much over the trend. There were also many times more BlackBerries in the world than iPhones in 2009, but the trendline was pretty clear to anyone who was watching, and material reality has caught up to that trend as expected, with BlackBerry being firmly dead and buried.
FB's products are trending downwards and TikTok is trending upwards. FB has pulled out the stops to stop the slide but has yet to find success doing so.
If FB doesn't arrest the slide from relevance it's only a matter of time until TikTok catches it in absolute terms. The salient question isn't whether or not FB is bigger right now (the answer is unequivocally yes) but whether or not they can halt/reverse the decline of their product.
The only thing that matters to see their trajectory is their performance with respect to their industry peers.
So assuming they're just an online entertainment company, Netflix is higher, Twitter is about the same, Disney is probably on the up, Activision and EA have similar downward trends, so I don't know, might still be too noisy to tell.
Personally if I were a betting man I'd be shorting them hard. People are quickly souring on the entire social media industry. There's no reason it had to stay around
Netflix has much bigger problems than Facebook. Meta only has one real competitor right now, and they can easily coexist since they’re both free. Netflix is actively being canibalized by the rest of the media market because it turns out that making tv and movies isn’t a zero marginal cost business and is largely a zero sum game.
Whatsapp is really deeply embedded in business in Latin America and it's deeply concerning to me. It was already reading your conversations. At best, it's going to start serving ads soon.
Businesses literally don't have phone numbers that can text or email addresses, but do have WhatsApp. If there was no WhatsApp, the main form of text communication that they use would be gone.
EU is pushing for interoperability of messengers apps, so there is a potential of disruption in this area. I am not saying that Whatsapp is toast, I just assume if interoperability is implemented, some companies would be highly motivated to bite into Meta's user base, right when Meta would have to think about some unsexy Whatsapp monetization.
Them not getting together to just fix this issue universally is stupid. Apple is naturally secretive (and profit from status-quo) and non cooperative and google is just a bunch unplanned running around.
Like I said before, the premature death of Meta Platforms constantly screamed here and even orchestrated and parroted by the mainstream media, has been greatly exaggerated.
Still profitable in a market downturn even with rising inflation fears causing everyone else in big tech to slightly miss expectations. DAUs, MAUs up again and they will be here for another 10+ years like it or not.
This one will be interesting. On the one hand, still hugely profitable. An operating margin of 29% is insane. On the other hand, people expect growth and no revenue growth and a large drop in income is definitely not what investors want to see.
The interesting thing is they were operating at more than 40% profit margins for years now. A drop to 29% margins [1] is actually pretty significant and puts it in line with profit margins at most other larger tech firms, and not at the top of the market anymore.
[1] Looks like this is pre-tax? I'm calculating 25% post-tax margins.
Given how the market is reacting, or non-reacting, then yeah this is business as usual for Meta. But hating on Meta is just free karma on HN so why not? You don't come to these threads to deal with the truth, you just voice your feelings or farm karma.
the game is you're supposed to beat analysts figures at the very least. easier when you have headroom or extra trick up your sleeves. I vaguely remember there was a time when facebook was so hot they were able to cook up a nice round figure for revenue or something prior or for IPO. pure flexing.
Not quite. They want to satisfy shareholders. Beating competitors is second-order because the shareholders will be happy (read: get more money) when that happens.
There's a difference between the market expecting a great quarter and FB missing by a little, and the market expecting a bad quarter and FB doing even worse.
The market tracks the future, not the present. Underperforming, even marginally, against expectations implies that the trend for the next quarter is going to be down as well.
I don’t think this is yet the beginning of the end - the company has proven to be resilient in the past (Google+, mobile). But yeah declining MAU from last quarter and overall numbers not too great. Now war-time Zuck will come.
Yes, Facebook has weathered past storms by adapting to changes, but anyone using Google+ failure to draw parallels with TikTok, is making a superficial comparison at best.
For one, Google+ never matured in terms of user engagement or DAU that interacted with its social feed. It's not Facebook's "war story" but a story of Google's own failure.
I kind of think FB is uniquely positioned to make the metaverse thing work, if it possibly can. I just think it’s unlikely we’ll ever see it catch on, no matter who is pushing it.
They have the capital and people. I keep asking people I know if anybody is excited about their metaverse, and only a marketing person told me she was. Their reputation from past behavior is going to make it difficult for people to adopt. I see a big flop, but I have been wrong before.
They have the cash to make the hardware, the capital-intensive side, work. On the actual product experience I'm unconvinced. But all Meta needs to do is be competitive in the space not win it. If they're in the top-3, that's still a huge revenue generator.
Their share price would just update to reflect their position. The market isn't going to punish a company for declining, just price a company based on current position and future prospects. It is the nature of companies to grow, stagnate, decline, and fail.
Right now Meta has product offerings (Horizon Worlds), they have an app store, and they make their own hardware. I find their product offering to be bad, but their app store and hardware are fine. Valve has made plenty of money over the years by owning just an app store alone. I think Meta is still a world leader owning the store and the hardware even if their product offering is middling. Being able to innovate on the hardware end gives them great leverage on what features applications use, the ability to influence AAA studios and indie devs alike. This will eventually stop if VR hardware becomes commoditized, but that's not happening any time soon if it ever does. And if Meta does win the product battle then there's even more value to profit from.
And not being a world leader won't tank their stock or somehow erase the company. There's still real earnings/value to be had in VR and they're early in the space. As long as the space as a whole is successful and Meta stays a part of it, they'll continue to receive revenue which will continue to drive stock growth. They might not forever stay a behemoth, but they're not going anywhere any time soon.
I don't think anyone can create the metaverse. The technology that needs to be built is a brain-computer interface, but humanity is currently incapable of anything even close to that. No amount of money or political power can make it happen, at least not in the next 50 years.
I’m sure the libertarian paradise on Mars will allow Meta & Neurolink to perform the necessary human subject experimentation to solve the brain computer interface. It’s amazing the progress you can make if you don’t have to care about consequences
No I doubt it. Why does everyone forget about the “game” portion of the metaverse? You can’t just build it and expect people to join if the underlying game isnt fun. If it’s just some digital hangout spot then that’s boring sorry - been done before and most people don’t care about virtual chat rooms.
I don’t think FB knows how to make games. They know how to make social media platforms and web technologies but making games is it’s own skillset.
FB/META is still one of the leading organizations when it comes to AI/ML research. They are also sitting on incredible infrastructure that they can open up, just as Amazon did with AWS. I really hope Zuckerberg hires someone to tackle more realistic growth opportunities while he plays around with VRs. I think META should roll out cloud, ecommerce, and payment products.
An AWS B2B play seems like a bad fit for facebooks culture. On the other hand I agree going deeper into ecommerce and payments (without the crypto baggage), it seems like a no brainer.
I don't think that Metaverse can be implemented by anyone in the industry at the moment.
People consume content either in small chunks or on the background. Sure, teenagers and gamers are different, but the investment one has to make to build Metaverse cannot pay off with just this subset of users.
The first thing to know about Facebook is that they view the social media landscape in two dimensions: format and audience size. Format here means text -> audio -> video. So if you look at the match up between audience of 1:1,000,000 and text you'll find Twitter, for example.
This has served FB quite well but what happens after video, if anything? Well, the company believes the next two steps are VR then AR. In this context, the Oculus acquisition makes more sense.
Meta is ultimately (IMHO) suffering from a problem similar to what Microsoft had in 2000: it didn't know where to go and lacked leadership and direction. With MS and Netscape, MS really believed they were doing normal MS things until the governmen tintervened and they didn't really know what to do.
There have been three big initiatives from the top at FB that IMHO didn't and still don't make sense:
1. In respons eto the misinformation aroundd and subsequent to the 2016 election, FB decided to try and police truth with "fact checking". This is a huge mistake. Nobody is going to be happy. There will always be a line where people disagree. Even in clear cases of false information, as we've seen you're going to still upset a lot of people. This was always a losing strategy;
2. They decided to merge WhatsApp, FB Messenger and IG Direct to try and "win" the US messaging market against iMessage. Years before this there was no concerted effort to merge FB, IG and WA accounts. When asked, Mark said they were differnt ecosystems with different permissions. It didn't make sense to try and unify them. Well that fell by the wayside and angered users in the process; and
3. The Metaverse. Much like VR in general, I don't htink is ever going to be mainstream. It doesn't solve any problem. AR might if we can ever get AR glasses to work but that's a pretty big if. For now, people love their phones. They don't love VR headsets and (again, IMHO) they never will.
So now Meta stock has lost half its value. The best performers will be looking at the door. An effort to weed out low performers is going to make things incredibly toxic. It won't weed out bottom performers. It'll weed out those who are the worst at politics because that's what employee calibration is.
None of this is address the real problem: leadership. There is no top-level direction (that makes sense). Who you should be looking to lose is 50% of the people from directors right up to Mark's level. ICs and "leaf" managers don't decide company strategy. Direct this at those who do.
Re: #2, they also decided to merge Facebook with Oculus login, and I still refuse to buy an Oculus for that reason alone. I'm tired of my data being cross analyzed and seeing creepy ads follow me around the internet. Last thing I want to do is plug into some Facebook metaverse where even my eyeball movements are analyzed and processed.
As a kid I thought I would love VR. And even as solid as the modern experiences have gotten, spending more than 15 minutes in a headset is nauseating, and there's so much ceremony to get set up and you pretty much are expected to stand while playing. I'd rather veg out on the couch with a PS4 controller, I guess?
> As a kid I thought I would love VR. And even as solid as the modern experiences have gotten, spending more than 15 minutes in a headset is nauseating, and there's so much ceremony to get set up and you pretty much are expected to stand while playing. I'd rather veg out on the couch with a PS4 controller, I guess?
Yeah VR tech needs to become much more seamless before it impacts the market. But we can see that as headsets get better, a larger market segment is willing to take part. Every upgrade in experience and ergonomics opens up another tier of user.
re: The merging of facebook with oculus login -- next month you'll be able to create a standalone "meta" account, which are basically the equivalent of the old oculus accounts. You don't have to link them with a facebook account or any other existing account (but you will have the option).
Personally I can't blame you at all for such a belief given how poor of a steward of user data the company has been in the past.
All I can say is that it won't happen on my watch, and that the company gives product teams the tools and training to protect against such abuse before it happens, and incentivizes the raising of any privacy issues for many reasons including the FTC consent order that Zuckerberg has submitted to.
Thanks for your work to disentangle the two systems. I don't envy the work involved, but certainly appreciate what you're doing.
I'm one of the users frustrated when accounts were forcibly merged, but thankful Meta listened to user feedback and will revert it moving forward. No particular reason, but like many others, I prefer to have a separate identity for each service, instead of commingling all of them together.
No, a Meta account is the equivalent of a Facebook account, not the equivalent of an Oculus account. Oculus was a VR company, not an advertising/data tracking company and their account system reflected that.
> So now Meta stock has lost half its value. The best performers will be looking at the door. An effort to weed out low performers is going to make things incredibly toxic. It won't weed out bottom performers. It'll weed out those who are the worst at politics because that's what employee calibration is.
Just FYI this is not a uniquely Meta problem or even a Big Tech problem. This is going to hit almost every tech company. Stocks are down across the board, and Meta stock losing half its value is just business as usual in this economy. Best performers will look at the door to... end up at another company shedding its stock value for the same. Layoffs and cuts always create lots of FUD and while they're generally based around performance, politics is omnipresent and will always result in unjustified winners and unneeded losers.
5 year periods don't affect employee compensation packages. Most people in tech last at a company for 2 years. Most cliffs are at the 4 year mark. META has dumped harder than most of the other Big Tech companies over the last year, but it's also the newest and has more growth priced in than the others who have been around for longer.
If we look at YTD:
- MSFT: -19.68%
- GOOG: -21.67%
- AMZN: -29.02%
- AAPL: -13.93%
- META: -49.91%
You're losing money on your compensation package anyway. If your base salary is high enough at META (given cash on hand), then it can offset losses at most of these other companies. That said, META is probably most poised to suffer from a brain drain because of its relative stock performance. I still don't think it's going to lead to any sort of talent crisis (unless this triggers an exodus of senior talent holding the company's infra going or some other cultural factor.)
Job hopping slowed during the pandemic, and recession concerns, differences in WFH policies between companies, etc may extend avg tenure >2y.
Also, good options are drying up.
People left Apple, MS, Amazon Google to go to Meta + Netflix + unicorns (and subsequently moved between this second category).
Netflix and Coinbase seem terrible options right now. Shopify too.
Lyft, Uber? Can the runway hold?
Snap, Twitter? Even worst than Meta.
Airbnb? Instacart? Maybe, dunno.
Stripe is probably the last great choice.
Big tech is kinda the only game right now, and leaving Meta for another big co is unlikely to lead to higher comp even with stock variance. Esp. if Google tries to downlevel you as they often do.
I'd be surprised if there's any significant exodus of top Meta talent.
Never worked at Facebook. Interesting post. Thanks for for sharing your opinion. Here's mine:
Whatsapp. I still don't understand this purchase. Whatsapp is great but paying $21B for something something you have no idea how to monitize?
Metaverse. I like VR and appriciate the efforts from Facebook to really innovate here and potentially change the world. But the all Metaverse story is so cringy. I once watched an all hands with Zuck about the Metaverse and couldn't believe my eyes. I think starting small with one or two verticals would be a better approach (e.g., fitness and work meetings).
Acquisitions. Big tech relies on acquisitions and it's became much harder. Big problem for Meta that was pretty aggressive with acquisitions (e.g., Whatsapp).
Stock and talent. Yes the stock tanked and employees are "losing" money. But Meta is one of the highest paying companies so I don't see a mass exodus happening .
> The Metaverse. Much like VR in general, I don't think is ever going to be mainstream. It doesn't solve any problem.
VR will eventually reach the point where meeting someone in person will feel virtually the same as meeting someone in VR.
The problem VR solves is that there's a vast amount of resources currently being spent on transit (i.e. work & social commuting), housing (e.g. offices & hangout spaces), and ancillary products simply to meet face-to-face with other humans.
When VR reaches the tipping point where people really don't care if they're meeting IRL or via VR because it feels the same, all those resources can be saved or re-directed.
If you're traveling to meet face to face with other humans, you're probably going to be spending quite a while doing it, and often with clients. Doing this in VR would be extremely exhausting, and how would you convince the client to even do it?
I'd rather spend a day traveling to meet someone face to face for a few hours, than spend a few hours in VR.
I think the misinformation thing is a much bigger problem than you’re making it out to be. Facebook was already in traditional medias sights because they along with google have hoovered up all their revenue. Giving the media and the government an excuse to harp on them is a big problem.
The real question is how many of those people are getting off the social networks, which are highly monetized, in exchange for people who are joining WhatsApp, which is nearly un-monetized.
If Facebook and Instagram are losing the eyeballs of rich young people, and instead the DAUs are Indians and Latin Americans (as far as I know, these are the demographics on WhatsApp) with a lot less disposable income, those ad dollars are going to run away fast.
It looks like that shift has begun to happen, with the reductions in ad prices and the increase in sales expenses for less revenue.
I think you're taking this too much at face value. Facebook is no longer cool, sure. But Meta platforms have basically peaked, they aren't adding significant numbers of users, and they're going to struggle to monetize those users due to a number of headwinds - decreased ad spend due to the economic environment, the changes made on iOS, a change app-mix to less monetizable apps (it's harder to monetize Whatsapp vs Instagram), and the fact that they're flat to down in the markets that actually have money (US, Canada, Europe).
Meanwhile, their costs are through the roof, they're spending billions on a market segment that may not exist and the executive leadership at the company isn't focused on the core business.
Meta just running their social media business would be a good dividend stock. They probably are transitioning away from growth to a mature company and can take a lot of profits off the table. But "Meta we're going to chase another home run" is both not a growth but also a bad mature stock...
The problem with Meta is they can’t innovate. Facebook, now Meta, have achieved all of their growth through acquisitions. Instagram, WhatsApp, Oculus, and Giphy.
The days of Meta making huge acquisitions are over. The world governments aren’t going to allow it. So now Meta will actually have to innovate to compete.
And what are they up to? Copying features from TikTok. Losing $2.5 billion per quarter on VR while making little to no progress.
WhatsApp is the biggest moat, but it’s also the hardest to monetize, and Meta has given no evidence that they can fend off a challenger without acquiring their way out.
Good luck to anyone holding Meta stock. They won’t be able to buy their way out of this, not this time.
Well that's probably mostly because the corporate tax rate in the united states is lower than many HN commenters taxes, rather than specific Meta policies.
(USA corporate tax rate is 21%, while someone earning $200k in California would pay an effective rate of 33% including Federal, FICA & State taxes).
Besides - the effective paid 17% compares favourably with their competitors and others in the space.
> Is there a reason corporations even pay taxes, versus just taxing individuals once they get money distributed to them from the corporation?
Yes - because without corporation tax the revenues might get funneled out of the country and taxed elsewhere in tax avoidance schemes (both at the 'corporate' level in foreign-owned businesses, and at the individual level with the ability for the rich to setup shell corps to avoid income tax).
Do you think we have already seen peak Facebook? Obviously we can't judge from one bad(?) quarter, but from Meta's desperate attempts to copy Tiktok, I think its a slow decline from here.
It's popular to hate on Meta/Facebook but those acquisitions were very prescient and evidently pure dumb luck, either. The same Zuckerberg is still a directional force now as he was then, so it seems it isn't cut and dry that the company will only trend down from here.
The bet on VR seems dubious to me, but I'm getting old and boring. I don't know what anyone likes.
It hasn't. Despite having a new fancy framework and some new rewrites, the website is almost exactly the same as 6-7 years ago. I can't name one single meaningful feature added.
iPhone has been losing market share and never had a killer app.
And given the Quest2 has a been a commercial success perhaps like the iPhone there is no one game changing single app but a range of apps and features.
This is likely the peak for facebook, the website.
But it may not be a peak for facebook, the company - it is time for a new product.
Facebook successfully digested any vital competition in the social media market, the big question is whether they (still) have the innovation gene in their DNA.
Alternatively, they could keep acquiring any new emerging social apps like BeReal, especially targeting the youngest people, so the platform can keep the attractive demographics forever.
When did they last do innovation? As far as I can tell the site is hardly different from when the Wall / News Feed was invented in... what, 2005? Since then they've made a few minor extensions of the site, a few major acquisitions of competitors, and that's it.
not sure if you’re just referring to the network itself, but Meta has done a ton of innovation.
React, PyTorch, Jest, RocksDB, etc etc.
As an app though, no clue. Haven’t had a Facebook account for 6-7 years. Feel like people just have such a poor view of social media now that they are on a downward spiral. Lots of smart people there though, hopefully we can move away from social media and focus on social welfare.
> ...whether they (still) have the innovation gene in their DNA.
I attribute many (most?) of Facebook's prior successful pivots to having better intel on emerging products and segments. By using stuff like a VPN product (Onavo?) to surveil their users.
How's Facebook going to get that kind of intel now?
What's informing Zuck's pivot into VR? Hunches? Reading back issues of Wired and Mondo 2000?
It doesn't. Lot's of tech companies over-hired, over-invested both in 1999 and 2021. Can companies be conservative? Yes, but people were also predicting a tech crash in 2010, 2011, 2012....
Meta doesn't use SREs. There is a position called Production Engineer[1] which has the same skills and does almost the same work as a SWE, but has different focus - scalability, reliability, security, automation. The ballpark ratio is 10 SWE to 1 PE.
PE and SWE are't even remotely close in the pecking order at Meta. Also, the interview loops were slightly different for PE based on whether the candidate came from a SWE background or a systems background.
I'm a former Meta PE who reinterviewed internally as a SWE and then left because I was told that I'd have to move countries to finalize the conversion (because my location was a non-SWE site).
Yes. I was told this the almost as soon as I started as a PE, by colleagues. 2+ years later, having worked in both PE and SWE teams, I noticed first hand that PEs were consistently looked down upon by both SWEs and SWE managers.
Conversely, I was applying to Meta and have made it to the final stage. The interview was held with the head PE in the country. Both him and all preceding interviews clearly signaled PEs are 'the ones who do both' here, and their scarcity has made them quite valuable in the branch (according to them). It is also reflected by their salary here, which is 15% higher for interns and 50% higher as a FTE.
I suspect a few reasons, some of which are shared by all of the tech companies that over-hired:
- Prestige. There are a lot of companies (especially VC funded startups) that have massively over-hired because a large headcount of high-end engineers is a signal to the market (and importantly, VCs) as to your seriousness.
- Talent denial to competitors. If you don't want anyone to catch up in a space (say, VR) you can get a long way by simply hiring the entire talent pool dry. This is however an incredibly expensive strategy that presumes you have a gargantuan amount of cashflow. I suspect this was a large part of FB's strategy, but they are no longer in a financial position to sustain it. Google has done this to a large extent for AI, and do not appear to be letting up.
- Just like code, forming new teams is easier than refactoring old teams. In big companies every part of the product feels essential (until the crisis moment, where every cut is on the table and a more sober accounting occurs), and so the default inclination in good times is to keep every team but add more teams/headcount in order to take on additional work. In bad times one is much more inclined to exchange one initiative for another, rather than simply accumulating initiatives.
I think another part of it is actually related to how you retain people, the more people you have the more they want to feel they can advance which is made easier by giving more and more people chances to build teams and from there to expand it to ever more specific niches
Agreed. I think there a few key observations I've developed working in BigTech for many years now, that I don't think are necessarily obvious from the outside:
- You retain engineers by giving them money/stock, and by giving them a well-defined system towards advancing within the company. Typically in BigTech advancement into the senior ranks is defined largely by ability to lead major efforts that require significantly-sized teams to build out. You need a steady pipeline of junior engineers in order to keep more senior engineers on the advancement track. Orgs that stop growing have their engineers' career advancements slow/freeze and will eventually suffer attrition for it. If your org isn't growing, it's shrinking.
- You retain management by giving them more reports. Power and influence within the company is largely correlated with the number of people you manage. This is both for stupid signaling reasons, but also for real practical reasons - the more resources a manager has the more they are able to take on initiatives that move their org (and themselves) forward.
Everything from management to IC is aligned around continuously growing orgs. It takes a massive external shock to undo this dynamic.
Sounds very unsubstainable. The amount of new staff is just insane. It has to be chaos on the inside and tens of thousands walking around without anything to do.
It sounds like that would be the case but imagine every two pizza team has one or two new junior person and occasionally a senior person: you can actually absorb that at the team level in a reasonably pragmatic way. Not to say it's not inefficient or unnecessary; I just mean each team is creating its own work essentially in their narrow niche and feels it can absorb more engineering bandwidth into that niche... whether this is efficient in a macro sense is a separate question
Ehh, you'd be surprised! I suspect very few engineers are "walking around without anything to do".
I think modeling the median tech employee as someone who wants to sit around and do nothing is inaccurate - most want to do something productive or fulfilling. Left to their own devices the average engineer in the average tech corporation will trend towards doing something.
The real trick is whether or not that thing is of high value to the company.
You can think about work almost as a gas - it expands to fill the container it's in. Which is to say, if you hire more people, those people will come up with work to occupy themselves. And I don't mean this in a "people are stupid and they will work on stupid menial shit" way - they will actually (in the median) try to come up with something they think is meaningful and important!
The problem is that this "bottom up" approach where people at the leaf nodes of the org tree come up with their own work requires intense curation from the top, otherwise the natural tendency is for lots of teams to form to very excitedly ship a lot of stuff of dubious value to the business.
tl;dr: The problem isn't engineers sitting around idle, it's that unguided engineers tend to get very busy shipping stuff that doesn't matter, or may actually be destructive to the business.
Side note: Google is like this internally, and I suspect (having never worked at FB) that Meta is likely similar. Upper management provides very little product guidance, so figuring out what work should be done and what they should ship is decided very close to the leaf nodes of the company. This IMO goes a long way to explain why Google cancels so much stuff - many, many engineering hours are spent shipping products that do not matter, and eventually the company has to wind it down.
I've heard the talent denial to competitors reason but even for companies as big as FB and Google this seems unrealistic to me. Is hiring an expensive engineer really worth it to prevent one of many other potentially competing companies from hiring them? This makes sense for very specialized roles but for general engineering it seems like there would be more cost than benefit.
I'm guessing they publish their tax rate on the first page to counter criticisms of "big corps that pay no taxes".
It's hard to deny that a company cannot grow forever with the same product. There's literally only so many people on Earth. It's not a bad thing for growth to stop. It's a bad thing for your product to offer a sub par user experience though. I think this is where Facebook has suffered as they prioritized metrics and numbers over making a product that people love.
222 comments
[ 3.9 ms ] story [ 305 ms ] threadHopefully their metaverse play is a costly fatal distraction that will ultimately lead them to lose more money while lots of people run away from using their platform.
The fact they are ruining their own product [0] to compete with TikTok shows that they have completely run out of ideas.
There is no saving Facebook / Meta this time.
[0] https://www.washingtonpost.com/technology/2022/07/27/instagr...
"A new CEO" - gave them that much needed new life lease
Au revoir, Facebook.
The only way forward is for them to kick out Mark, stop the insanity that is Metaverse, focus on their core and play nice with the platforms and regulators.
It might be hard to convince him to give himself the boot, especially while the company continues to make gobs of money. Maybe we'll see a compromise where the company starts paying a dividend and Zuck shovels the rest of the cash into his passion project.
In any case, it will be interesting to see how the Metaverse thing will eventually perish.
In what way? If Facebook wanted to replace the iPhone with some "metaverse" device they would need to be able to build a device way more advanced than their current offerings at a price point equal to or less than the iPhone. That means they would need to make up for thousands of person years of engineering, manufacturing, and operations expertise that Apple currently has.
You're basically saying "If Facebook could build a copy of Apple from scratch and make some compelling products, they could be the next Apple". Samsung is an industrial behemoth and just keeps up with Apple.
Not only is that unlikely it doesn't even sound possible.
And if they achieve it then it will be a game changer as big as the internet or smart phone.
https://youtu.be/2zHDkdkqd1I
It's not an anti-capitalism stance to call Metaverse idea for what it is - trying to sell an elephant. Capitalism is not about going all in on the craziest ideas ever.
What is their bet anyway? What users' need are they trying to address or create?
Is this a new and better video game platform? Even if they are successful, VG are still very niche, especially compared to their social network user base.
Is this a new way to consume content? Sounds a bit fussy to me to have an extra device or two just so you cannot turn away when they run ads. People still are not that eager to put on 3D glasses to watch a movie. Are they betting that in the nearest future the reality is going to suck so bad that people would want to escape it? That's just bleak. What else? Realistic porn? Virtual learning? That's peanuts.
Is this going to be augmented reality instead? Some kind of wearable device? We already played with google glass, did not catch on. Plus regulation in many countries already caught up, so you cannot just wear video recording device whenever for example.
Who are the end users? Who has hours of time to consume uninterruptedly whatever content they can provide in their Metaverse? Certainly not the people who has money to spend.
In the end it's an adversarial design to capture all users' attention for prolonged periods of time, the pay off for the user has to be astronomical.
It is Roblox. It is a collaborative building environment where the content that people create and share for one another is the interactive world rather than text, photos, or videos, done through VR rather than traditional computing.
This is the first time I am hearing about Roblox, looks video games adjacent to me. Meta would not be able to convert their billions of users to a similar platform.
They have to convince users to give up the time they spend now elsewhere on this experience. I suppose it has to be insanely addictive and rewarding, and also it has to have no barriers of entry.
I am just not seeing it in the Metaverse. I mean people gave up the horizontal video format in order to easier consume media, and Meta is trying to convince everybody that people would wear or implant (?!) a devices to have better fidelity video experience? The entertainment value is just not in the resolution and collaborative content creation is already possible without Metaverse and is niche.
At this point I consider the Metaverse idea just smoke and mirrors to convince investors that they have the next best thing with 30% year to year revenue growth. I don't think Meta would go anywhere soon, they're just hitting the ceiling of easy money they were making and now it's getting harder to have such margins.
They're essentially trying to _create_ a new need in the minds of consumers, I think.
The trouble for them is, this rarely works. This is quite different to, say, the iPhone; when the iPhone showed up, the market was already inclined to think "it would be nice if there was a good phone that could do more stuff than my Nokia"; it wasn't specifically demanding an iPhone, but an iPhone was a good solution for what it was demanding. It's not clear that anyone is demanding a 'metaverse'.
The FB discussion isn't about anti-capitalism. It is the general theme of HN.
Like most HNers you are lacking imagination in what VR will do. Just like everyone who poo-poo'ed what is possible from Computers, Internet, Mobile Phones.
Yeah before iPhones, we already played with Palm Pilots and Microsoft CE hand held devices.
End users are all of humanity (minus some stubborn Luddites. But you never invest / build strategy around luddites)
If VR helps you master skills better, help firms to be more productive, that in itself is a good enough use case for everyone to use VR
The fact that VR systems can provide experiences closer to reality means the applications are boundless.
You seem to make a lot of these sweeping statements. They're full of stupid assumptions and generalities. It's a boring shtick and I'm not really seeing you back it up with your dizzying intellect.
Besides being casually insulting to a huge group of people you don't know, it's also a profoundly stupid assertion.
There's no subset of people on HN that at any point poo-pooed computers, the Internet, or mobile phones. A significant population here have been involved in building those things. You're trying to assert that because someone isn't fawning over wide eyed promises of some technology they're some sort of backwards Luddite.
History is littered with technologies that did not revolutionize the world. There's little guarantee VR isn't going to end up in that heap. It's had a lot of promise for decades. It's got fundamental technological, ergonomic, and physiological problems to overcome before it's going to be attractive to anyone but enthusiasts. Even then there's no guarantee that it will take off in a significant way. Even if VR takes off there's no guarantee and little indication that Facebook's vision of VR will take off.
I was there when engineers of the 80s/90s poo, poo'ed commercial success of the internet.
I was there when engineers of the 90s poo, poo'ed iPhones (it's just a drive with a phone jack that can make calls)
I was there when engineers of the 00s poo, poo'ed Twitter, Instagram
Yes, I have sufficient data to safely conclude that smart people close their mind pretty early in their life (A curse of intelligence). There is in fact plenty of research around this. That's why you end with Grammar Nazi's, Language Nazi's, Social Media Nazis.
Very few escape the curse of intelligence (why would they? They pretty much get a cushy job and can lead a comfortable life with their blinders on).
> I was there when engineers of the 90s poo, poo'ed iPhones (it's just a drive with a phone jack that can make calls)
>I was there when engineers of the 00s poo, poo'ed Twitter, Instagram
A good portion of HN was also part of all those conversations, I know I was. Suggesting the zeitgeist of any of those fora was poopooing new technologies is ridiculous. The fact those fora were enabled by those technologies should tell you that your position is absurd.
You've created a strawman out of a fantasy cohort of technology enthusiasts ignorantly poopooing technologies. Because you can easily beat up your strawman you seem to have convinced yourself of your own superiority.
Maybe you should take your passive voice casual insults to some other forum. Go wow them with your Brobdingnagian intellect. Your valuable insights will be sorely missed but you're wasting your time here.
One day HN will be irrelevant, as the true value creators will move on to something else. As a superior prognosticator, I'll know when and I'll leave ship.
If Facebook can solve all these huge technical hurdles they need to do so in an affordable device. Then they need to develop the operations capacity to actually build and support them. Then they need to make a compelling experience that normal users would actually want.
Facebook does not have a history of executing on those things. They also don't look like they're making any moves to be able to execute on those things.
So clearly Meta does know to ship a popular device at scale.
You'll also note 5 million is a twentieth of Apple's iPhone sales. So even if Facebook solves all of their other problems they have to ramp up production 2000% to "replace" Apple.
That is a heavy fucking lift from where they are right now. When the iPhone was released it did what dumb phones did and then some. It's killer apps were the media playback and the Internet. Facebook has yet to demonstrate a killer app for their VR.
Once upon a time Apple was a much smaller company. They strategized to one day have something they called a "dynabook". Their first attempt, the Newton was not good at all and much too expensive.
Looks at TikTok...
Don't think dethroning the lizard king is going to be that easy.
That said I laughed out loud to this. I’m not a FB fan because of all the dark patterns.
Edit: Added “only”
Then they'll be as dead as eternal money-losing cash pit Uber.
someone whispers in my ear ... correction, I'm being told Uber is still not dead.
I know, I know, I'm as confused as you are.
Don't be, for the last decade or so money has been extremely cheap.
For anyone focused on fundamentals many of these companies don't make sense and it all seems eerily similar to the dotcom logic (anyone old enough will remember claims of "new economy" and "things are different"), but for anyone interested in growing their money, spending more than you make while money is essentially free makes a lot of sense.
The thing many people still don't understand is that the era of cheap/free money is coming to an end and there is going to be a lot of reality coming to surprise companies that aren't actually able to become profitable in an era without free money.
This doesn't just impact companies that currently don't make a profit, but those that make their profits from other companies that don't make a profit. How much AWS is paid for by startups that don't make a profit? How much of meta's ad revenue is ad-spend from companies that don't make a profit?
We'll soon be finding out.
Modern day Linux on the Desktop.
Meta's operating income (i.e. profit before taxes and interest basically) for this past quarter was $8.3 billion. That's roughly the same as Exxon did in its Q1. "Au revoir" seems premature when they're still raking in that much cash.
I love how people keep saying Facebook is dying, yet TikTok still doesn't have as many active users as Facebook, WhatsApp and Instagram.
The only application that does is YouTube.
Facebook has ~2.9 billion monthly active users.
These are stats from Q1 2022.
FB's products are trending downwards and TikTok is trending upwards. FB has pulled out the stops to stop the slide but has yet to find success doing so.
If FB doesn't arrest the slide from relevance it's only a matter of time until TikTok catches it in absolute terms. The salient question isn't whether or not FB is bigger right now (the answer is unequivocally yes) but whether or not they can halt/reverse the decline of their product.
Facebook:
https://www.statista.com/statistics/264810/number-of-monthly...
Family Apps:
https://www.statista.com/statistics/947869/facebook-product-...
So assuming they're just an online entertainment company, Netflix is higher, Twitter is about the same, Disney is probably on the up, Activision and EA have similar downward trends, so I don't know, might still be too noisy to tell.
Personally if I were a betting man I'd be shorting them hard. People are quickly souring on the entire social media industry. There's no reason it had to stay around
Life and work are nearly impossible here without Whatsapp.
Still profitable in a market downturn even with rising inflation fears causing everyone else in big tech to slightly miss expectations. DAUs, MAUs up again and they will be here for another 10+ years like it or not.
It's business as usual folks.
This is after all the company that is betting its future on clown shows like this: https://twitter.com/MetaQuestVR/status/1551943338038726657
It's hard to decide what is the more inept management between the Twitter crypto avatar bros and the meta "meta" verse people.
[1] Looks like this is pre-tax? I'm calculating 25% post-tax margins.
- Earnings: $2.46 per share vs. $2.59 per share expected, according to Refinitiv
- Revenue: $28.82 billion vs. $28.94 billion expected, according to Refinitiv
- Daily Active Users (DAUs): 1.97 billion vs 1.96 billion expected, according to StreetAccount
- Monthly Active Users (MAUs): 2.93 vs 2.94 billion expected, according to StreetAccount
- Average Revenue per User (ARPU): $9.82 vs. $9.83 expected, according to StreetAccount
Facebook isn't a Hedge Fund. They want to beat their competitors, not market research predictions.
Not quite. They want to satisfy shareholders. Beating competitors is second-order because the shareholders will be happy (read: get more money) when that happens.
For one, Google+ never matured in terms of user engagement or DAU that interacted with its social feed. It's not Facebook's "war story" but a story of Google's own failure.
'Crack' is the sound that is commonly associated with 'a whip'.
Yikes!
And not being a world leader won't tank their stock or somehow erase the company. There's still real earnings/value to be had in VR and they're early in the space. As long as the space as a whole is successful and Meta stays a part of it, they'll continue to receive revenue which will continue to drive stock growth. They might not forever stay a behemoth, but they're not going anywhere any time soon.
https://www.youtube.com/watch?v=x6AOwDttBsc
I don’t think FB knows how to make games. They know how to make social media platforms and web technologies but making games is it’s own skillset.
People consume content either in small chunks or on the background. Sure, teenagers and gamers are different, but the investment one has to make to build Metaverse cannot pay off with just this subset of users.
The first thing to know about Facebook is that they view the social media landscape in two dimensions: format and audience size. Format here means text -> audio -> video. So if you look at the match up between audience of 1:1,000,000 and text you'll find Twitter, for example.
This has served FB quite well but what happens after video, if anything? Well, the company believes the next two steps are VR then AR. In this context, the Oculus acquisition makes more sense.
Meta is ultimately (IMHO) suffering from a problem similar to what Microsoft had in 2000: it didn't know where to go and lacked leadership and direction. With MS and Netscape, MS really believed they were doing normal MS things until the governmen tintervened and they didn't really know what to do.
There have been three big initiatives from the top at FB that IMHO didn't and still don't make sense:
1. In respons eto the misinformation aroundd and subsequent to the 2016 election, FB decided to try and police truth with "fact checking". This is a huge mistake. Nobody is going to be happy. There will always be a line where people disagree. Even in clear cases of false information, as we've seen you're going to still upset a lot of people. This was always a losing strategy;
2. They decided to merge WhatsApp, FB Messenger and IG Direct to try and "win" the US messaging market against iMessage. Years before this there was no concerted effort to merge FB, IG and WA accounts. When asked, Mark said they were differnt ecosystems with different permissions. It didn't make sense to try and unify them. Well that fell by the wayside and angered users in the process; and
3. The Metaverse. Much like VR in general, I don't htink is ever going to be mainstream. It doesn't solve any problem. AR might if we can ever get AR glasses to work but that's a pretty big if. For now, people love their phones. They don't love VR headsets and (again, IMHO) they never will.
So now Meta stock has lost half its value. The best performers will be looking at the door. An effort to weed out low performers is going to make things incredibly toxic. It won't weed out bottom performers. It'll weed out those who are the worst at politics because that's what employee calibration is.
None of this is address the real problem: leadership. There is no top-level direction (that makes sense). Who you should be looking to lose is 50% of the people from directors right up to Mark's level. ICs and "leaf" managers don't decide company strategy. Direct this at those who do.
As a kid I thought I would love VR. And even as solid as the modern experiences have gotten, spending more than 15 minutes in a headset is nauseating, and there's so much ceremony to get set up and you pretty much are expected to stand while playing. I'd rather veg out on the couch with a PS4 controller, I guess?
Yeah VR tech needs to become much more seamless before it impacts the market. But we can see that as headsets get better, a larger market segment is willing to take part. Every upgrade in experience and ergonomics opens up another tier of user.
https://store.facebook.com/help/accounts/?intern_source=blog...
Disclaimer: I work on a team that's helping out with this effort
No company or CEO deserves less trust than Meta and Zuckerberg.
All I can say is that it won't happen on my watch, and that the company gives product teams the tools and training to protect against such abuse before it happens, and incentivizes the raising of any privacy issues for many reasons including the FTC consent order that Zuckerberg has submitted to.
I'm one of the users frustrated when accounts were forcibly merged, but thankful Meta listened to user feedback and will revert it moving forward. No particular reason, but like many others, I prefer to have a separate identity for each service, instead of commingling all of them together.
Just FYI this is not a uniquely Meta problem or even a Big Tech problem. This is going to hit almost every tech company. Stocks are down across the board, and Meta stock losing half its value is just business as usual in this economy. Best performers will look at the door to... end up at another company shedding its stock value for the same. Layoffs and cuts always create lots of FUD and while they're generally based around performance, politics is omnipresent and will always result in unjustified winners and unneeded losers.
-MSFT: up 267%
-GOOG: up 143%
-AMZN: up 131%
-AAPL: up 316%
and META? down 6%
If we look at YTD:
- MSFT: -19.68%
- GOOG: -21.67%
- AMZN: -29.02%
- AAPL: -13.93%
- META: -49.91%
You're losing money on your compensation package anyway. If your base salary is high enough at META (given cash on hand), then it can offset losses at most of these other companies. That said, META is probably most poised to suffer from a brain drain because of its relative stock performance. I still don't think it's going to lead to any sort of talent crisis (unless this triggers an exodus of senior talent holding the company's infra going or some other cultural factor.)
Job hopping slowed during the pandemic, and recession concerns, differences in WFH policies between companies, etc may extend avg tenure >2y.
Also, good options are drying up.
People left Apple, MS, Amazon Google to go to Meta + Netflix + unicorns (and subsequently moved between this second category).
Netflix and Coinbase seem terrible options right now. Shopify too.
Lyft, Uber? Can the runway hold?
Snap, Twitter? Even worst than Meta.
Airbnb? Instacart? Maybe, dunno.
Stripe is probably the last great choice.
Big tech is kinda the only game right now, and leaving Meta for another big co is unlikely to lead to higher comp even with stock variance. Esp. if Google tries to downlevel you as they often do.
I'd be surprised if there's any significant exodus of top Meta talent.
Whatsapp. I still don't understand this purchase. Whatsapp is great but paying $21B for something something you have no idea how to monitize?
Metaverse. I like VR and appriciate the efforts from Facebook to really innovate here and potentially change the world. But the all Metaverse story is so cringy. I once watched an all hands with Zuck about the Metaverse and couldn't believe my eyes. I think starting small with one or two verticals would be a better approach (e.g., fitness and work meetings).
Acquisitions. Big tech relies on acquisitions and it's became much harder. Big problem for Meta that was pretty aggressive with acquisitions (e.g., Whatsapp).
Stock and talent. Yes the stock tanked and employees are "losing" money. But Meta is one of the highest paying companies so I don't see a mass exodus happening .
VR will eventually reach the point where meeting someone in person will feel virtually the same as meeting someone in VR.
The problem VR solves is that there's a vast amount of resources currently being spent on transit (i.e. work & social commuting), housing (e.g. offices & hangout spaces), and ancillary products simply to meet face-to-face with other humans.
When VR reaches the tipping point where people really don't care if they're meeting IRL or via VR because it feels the same, all those resources can be saved or re-directed.
I'd rather spend a day traveling to meet someone face to face for a few hours, than spend a few hours in VR.
Half the adults on this planet use a Meta product DAILY, and they added some 3% to it in an incredibly difficult environment.
The only interesting thing in the results are the lower ad prices.
If Facebook and Instagram are losing the eyeballs of rich young people, and instead the DAUs are Indians and Latin Americans (as far as I know, these are the demographics on WhatsApp) with a lot less disposable income, those ad dollars are going to run away fast.
It looks like that shift has begun to happen, with the reductions in ad prices and the increase in sales expenses for less revenue.
Meanwhile, their costs are through the roof, they're spending billions on a market segment that may not exist and the executive leadership at the company isn't focused on the core business.
Meta just running their social media business would be a good dividend stock. They probably are transitioning away from growth to a mature company and can take a lot of profits off the table. But "Meta we're going to chase another home run" is both not a growth but also a bad mature stock...
The days of Meta making huge acquisitions are over. The world governments aren’t going to allow it. So now Meta will actually have to innovate to compete.
And what are they up to? Copying features from TikTok. Losing $2.5 billion per quarter on VR while making little to no progress.
WhatsApp is the biggest moat, but it’s also the hardest to monetize, and Meta has given no evidence that they can fend off a challenger without acquiring their way out.
Good luck to anyone holding Meta stock. They won’t be able to buy their way out of this, not this time.
(USA corporate tax rate is 21%, while someone earning $200k in California would pay an effective rate of 33% including Federal, FICA & State taxes).
Besides - the effective paid 17% compares favourably with their competitors and others in the space.
Except that you still owe taxes when your corporation gives the money to you (the individual).
Yes - because without corporation tax the revenues might get funneled out of the country and taxed elsewhere in tax avoidance schemes (both at the 'corporate' level in foreign-owned businesses, and at the individual level with the ability for the rich to setup shell corps to avoid income tax).
So it is diversified in that sense.
The bet on VR seems dubious to me, but I'm getting old and boring. I don't know what anyone likes.
And given the Quest2 has a been a commercial success perhaps like the iPhone there is no one game changing single app but a range of apps and features.
But it may not be a peak for facebook, the company - it is time for a new product.
Facebook successfully digested any vital competition in the social media market, the big question is whether they (still) have the innovation gene in their DNA.
Alternatively, they could keep acquiring any new emerging social apps like BeReal, especially targeting the youngest people, so the platform can keep the attractive demographics forever.
As an app though, no clue. Haven’t had a Facebook account for 6-7 years. Feel like people just have such a poor view of social media now that they are on a downward spiral. Lots of smart people there though, hopefully we can move away from social media and focus on social welfare.
I attribute many (most?) of Facebook's prior successful pivots to having better intel on emerging products and segments. By using stuff like a VPN product (Onavo?) to surveil their users.
How's Facebook going to get that kind of intel now?
What's informing Zuck's pivot into VR? Hunches? Reading back issues of Wired and Mondo 2000?
Like ... why? They hired 20 000 employees net in a year? And Zuckerberg now somehow says that they need to tighten the belt?
2017 20,658 43% yoy
2018 30,275 47%
2019 39,651 31%
2020 52,534 32%
2021 63,404 21%
There are about 65000 CS students getting a diploma each year in the US. I wonder how many of FB employees are SWEs.
Is there a break down somewhere of how many are SWE vs SRE vs support?
[1] - https://engineering.fb.com/category/production-engineering/
I'm a former Meta PE who reinterviewed internally as a SWE and then left because I was told that I'd have to move countries to finalize the conversion (because my location was a non-SWE site).
- Prestige. There are a lot of companies (especially VC funded startups) that have massively over-hired because a large headcount of high-end engineers is a signal to the market (and importantly, VCs) as to your seriousness.
- Talent denial to competitors. If you don't want anyone to catch up in a space (say, VR) you can get a long way by simply hiring the entire talent pool dry. This is however an incredibly expensive strategy that presumes you have a gargantuan amount of cashflow. I suspect this was a large part of FB's strategy, but they are no longer in a financial position to sustain it. Google has done this to a large extent for AI, and do not appear to be letting up.
- Just like code, forming new teams is easier than refactoring old teams. In big companies every part of the product feels essential (until the crisis moment, where every cut is on the table and a more sober accounting occurs), and so the default inclination in good times is to keep every team but add more teams/headcount in order to take on additional work. In bad times one is much more inclined to exchange one initiative for another, rather than simply accumulating initiatives.
- You retain engineers by giving them money/stock, and by giving them a well-defined system towards advancing within the company. Typically in BigTech advancement into the senior ranks is defined largely by ability to lead major efforts that require significantly-sized teams to build out. You need a steady pipeline of junior engineers in order to keep more senior engineers on the advancement track. Orgs that stop growing have their engineers' career advancements slow/freeze and will eventually suffer attrition for it. If your org isn't growing, it's shrinking.
- You retain management by giving them more reports. Power and influence within the company is largely correlated with the number of people you manage. This is both for stupid signaling reasons, but also for real practical reasons - the more resources a manager has the more they are able to take on initiatives that move their org (and themselves) forward.
Everything from management to IC is aligned around continuously growing orgs. It takes a massive external shock to undo this dynamic.
Also FB has been hireing way more than I thought for a long time:
mhio posted further down:
2017 20,658 43% yoy
2018 30,275 47%
2019 39,651 31%
2020 52,534 32%
2021 63,404 21%
2022 83,553 32%
Between 2016 and 2018 a 4 person team would go 4->6->9. Assuming even distribution of new hires.
Any team bigger than 4 would probably need a split.
I just don't see how any organization can grow this quick without cracking big time.
I think modeling the median tech employee as someone who wants to sit around and do nothing is inaccurate - most want to do something productive or fulfilling. Left to their own devices the average engineer in the average tech corporation will trend towards doing something.
The real trick is whether or not that thing is of high value to the company.
You can think about work almost as a gas - it expands to fill the container it's in. Which is to say, if you hire more people, those people will come up with work to occupy themselves. And I don't mean this in a "people are stupid and they will work on stupid menial shit" way - they will actually (in the median) try to come up with something they think is meaningful and important!
The problem is that this "bottom up" approach where people at the leaf nodes of the org tree come up with their own work requires intense curation from the top, otherwise the natural tendency is for lots of teams to form to very excitedly ship a lot of stuff of dubious value to the business.
tl;dr: The problem isn't engineers sitting around idle, it's that unguided engineers tend to get very busy shipping stuff that doesn't matter, or may actually be destructive to the business.
Side note: Google is like this internally, and I suspect (having never worked at FB) that Meta is likely similar. Upper management provides very little product guidance, so figuring out what work should be done and what they should ship is decided very close to the leaf nodes of the company. This IMO goes a long way to explain why Google cancels so much stuff - many, many engineering hours are spent shipping products that do not matter, and eventually the company has to wind it down.
It's hard to deny that a company cannot grow forever with the same product. There's literally only so many people on Earth. It's not a bad thing for growth to stop. It's a bad thing for your product to offer a sub par user experience though. I think this is where Facebook has suffered as they prioritized metrics and numbers over making a product that people love.