How do you see the road ahead for Meta?

There are certainly structural problems for Meta. For instance, analysts argue that the challenges for Meta may not be a lot more complex and deep-rooted. Privacy changes made by Apple could sharply impact its ad targeting and measuring leading to lower productivity. For the year 2022 alone, the revenue impact could be more than $10 billion, with a 10% impact on the profits. But the bigger disconnect is between outflows and outcomes.

Yes, we are talking about the Metaverse. Analysts are concerned that most of the fund outflows are invested in the Metaverse, which is going to be a drag on revenues and profits in the next few years. This front-ending of outflows and uncertainty of outcome is the big challenge in the new business focus of Meta. To add to this cup of woes, the high inflation is pinching corporate budgets and advertising is normally the first casualty.

It is high time Facebook things out of the box and builds a business that continuously expands. There is the need to continuously evolve. What puts Apple, Google, and Amazon at the top is the ability to consistently evolve and fine-tune their models. The social media clout of Facebook has been challenged by niche players like Instagram, Twitter, LinkedIn, and many regional plays. Dividends of social media reach are waning.

In a nutshell, if Metaverse really takes off, and that is still a big question mark; then Meta will be able to savour the fruits of its efforts. Else, Meta will have a lot of tough questions to answer to all its investors in the future for not being able to evolve the company with the future in mind.