Has FAANG (Facebook, Amazon, Apple, Netflix, and Google) become MAANG?
Facebook’s name change, to Meta, is causing a few issues for analysts who like a good tag to describe the group of companies dominating the digital world and a big chunk of advertising.
The social media platform’s new ticker symbol is MVRS from December 1, replacing FB. MAANG is born.
What Meta/Facebook wants is to lead in creating this new digital world, the metaverse, and then own it.
The metaverse concept, touted as the successor to the internet, gives access to virtual worlds to individuals using an avatar.
Global consultancy Forrester: “Like the internet, no one company owns the metaverse, but a standard set of protocols and currencies would create a seamless user experience — akin to the OASIS, featured in the book-turned-motion picture, Ready Player One.”
Wunderman Thompson Intelligence says it’s becoming harder to distinguish “real” life from that lived digitally.
Consumers are replicating physical daily habits in the virtual realm, signing a growing value to digital assets and giving rise to new direct-to-avatar (D2A) business models.
"We’re replicating our routines, interests and obsessions in digital worlds: from picking outfits for our avatars to wear and cars for them to drive to fostering virtual relationships and intimacy; from zoning digital land and constructing virtual homes to meeting friends at the virtual mall; and from hosting holographic meetings to pursuing the allure of a more equitable and inclusive society," says Wunderman Thompson in its latest trend report.
"As our habits evolve, we’re outgrowing the bounds of the internet as it was first created—precipitating a new era of digital platforms.
Facebook founder and CEO Mark Zuckerberg sees the metverse as a big commercial oppportunity, a new world to sell things to virtual people in a virtual world.
And it's a big play. In 2021, he expects investments in Facebook Reality Labs to be about $US10 billion,
He told analysts when releasing third quarter results: "This is a major area of investment for us and an important part of our strategy going forward.
"I view this work as critical to our mission because delivering a sense of presence -- like you're right there with another person -- that’s the holy grail of online social experiences.
"Over the next decade, these new platforms are going to start to unlock the kinds of experiences that I've wanted to build since even before I started Facebook.
"Along with those social experiences I expect a massive increase in the creator economy and amount of digital goods and commerce.
"If you're in the metaverse every day, then you'll need digital clothes, digital tools, and different experiences. Our goal is to help the metaverse reach a billion people and hundreds of billions of dollars of digital commerce this decade. Strategically, helping to shape the next platform should also reduce our dependence on delivering our services through competitors."
However, the Facebook name change probably won’t work if it is an attempt to reset Facebook from recent negative publicity, say analysts.
The Facebook Papers have dominated news about the social media platform, allegedly showing the company repeatedly and knowingly putting the company's image and profitability ahead of the public good.
Analysts say founder Zuckerberg’s public face of the change will make consumers see the company as the same beast with a new skin, no matter what it is called.
“While it’ll help alleviate confusion by distinguishing Facebook’s parent company from its founding app, a name change doesn’t suddenly erase the systemic issues plaguing the company,” says Forrester VP and Research Director Mike Proulx.
“If Meta doesn’t address its issues beyond a defensive and superficial altitude, those same issues will occupy the metaverse.”
The success of Meta’s metaverse strategy comes down to trust, he says.
Forrester found that less than half (41%) of online adults surveyed in the US say they trust Facebook (the company). In the UK it’s just 26%.
If the majority of online adults don’t trust Facebook as a social media company, why would they trust it as a metaverse company?
Forrester polled 745 adults across the US, Canada, and the UK about their attitudes on a possible Facebook parent company name change.
More than four out of five (86%) agreed that changing the company name won’t change Facebook’s reputation.
As for Facebook becoming a metaverse company, most (45% of those polled) were neutral on the matter – signaling a wait and see attitude as many consumers still don’t understand what the metaverse is.”
Brian Wieser, global president, business intelligencen at GroupM, says $US10 billion is a significant amount of money, even for Meta/Facebook, to spend on one project.
However, he points out that Facebook didn’t get to its size without help from others.
“Partnerships with owners of intellectual property, hardware manufacturers, infrastructure owners, not to mention the tacit or overt support of governments in multiple markets and willing employees are all critical as well," says Wieser.
“Critically, the form factors of interfaces – headsets and eyewear as it exists today is a real limiter for most non-gaming consumers – need to meet human expectations for the kinds of tools we want and are willing and able to use.
“More importantly, for the metaverse concept to achieve sufficient scale for most marketers to justify investing their own resources of time and money into this space, they will need to become somewhat confident that use cases and opportunities will be established beyond gaming, which dominates related spaces today (although perhaps gaming is enough for Meta to reach its goal of one billion people – with a much smaller number likely accounting for the bulk of activity in this environment – within a decade).
“A bigger issue relates to the safety of individuals and society if the platform realizes its ambitions.
“Understandably, Meta says that ‘privacy and safety need to be built into the metaverse from day 1’ but one statement in their sizzle reel promoting the vision asks us to ‘imagine a world where we are represented the way we want to be’.
“There are certainly upsides in the inclusivity that can follow from such worlds, but those worlds may allow us to indulge in fantasy to the exclusion of reality, and to limit our interactions to extremely immersive echo chambers which could negatively impact mental health or amplify the spread of mis and dis-information.
“Unfortunately, we’ve already seen the consequences of those sorts of interactions without the metaverse. Presumably most of the partners needed for success – especially including governments and privacy advocates – will likely have a thing or two to say about how the space evolves before enough capital is deployed to more fully assess the probability of success for the initiative.”
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