Facebook owner Meta will lift the veil from his metaverse business By Reuters

Author: Elizabeth Culliford

(Reuters) – Since October, Facebook (NASDAQ 🙂 has renamed the company, articulated an Internet view where people can connect via virtual reality avatars or teleported to see places like Ancient Rome, and has helped spark the madness of metaverse investments.

The company, now Meta Platforms Inc., is announcing the results for the fourth quarter on Wednesday, as investors will have a new window on the financial impact of CEO Mark Zuckerberg’s current passion.

Meta aims to break the results of its augmented reality and virtual reality hardware unit for the first time.

The company is hiring engineers and buying multiple virtual reality game studios to build towards metabersion, which is a broad futuristic idea of ​​virtual areas that can be accessed through different devices, and Zuckerberg is betting that it will be the successor to the mobile Internet.

Analysts said they would be eager to see indicators of the profitability of the Reality Labs division, how long the drag on advertising may be, and evidence of the strength of VR headset sales.

“It’s going to be awesome for me as an analyst, not having to surgically drill through Facebook’s earnings … and just see a lens in Reality Labs,” VR analyst Stephanie Llamas told VoxPop.

Meta said it expects non-advertising revenue to drop year-on-year in the fourth quarter as it compares it to the “strong launch” of its VR Quest 2 headphones in the holiday season of last year’s holiday season.

The company has not released sales numbers for Quest headphones, but a reminder to remember the foam-face covers of the July 2 Quest said it affected about 4 million units in the United States. As a sign of strong headphone sales last holiday season, its Oculus app took first place for free iPhone apps in the U.S. App Store on Christmas Day.

‘SIGNIFICANT CERTIFICATE’

However, investors will be wondering how Meta’s main digital advertising business is doing after the technology giant said it had “a great deal of uncertainty” in the fourth quarter of October.

Alphabet (NASDAQ 🙂 Inc., the world’s second-largest digital advertising platform after Google, warned that Apple Inc. (NASDAQ:) could suffer from the ongoing success of privacy changes, which has made it difficult to target brands. and measure their ads on Meta’s social media Facebook and Instagram services. Analysts said Meta had set a low limit for future gains, but doubts remained about these consequences and the problems associated with the COVID-19 pandemic.

“The change in Apple’s follow-up clearly had a negative impact on Facebook in the September quarter,” ISI analyst Mark Mahaney told Evercore ISI. “The question is, were they able to alleviate that risk further … or was it greater?”

Research analyst Pedro Palandrani of Global X said the meta-verse was a “long-term story,” but in the short term investors would look at how to navigate Meta Apple’s policies, as well as e-commerce updates and ways to make money with messages or features. his short video offering, Reels.

Meta, which reported revenue of about $ 86 billion by 2020, has yet to explain in detail how it will make money in the metaverse. In November, he outlined the options the brands could offer, from immersion shops to paid mixed-reality events. The company has invited a group of ad directors to discuss its brand change and metabersion plans at a virtual roundtable next month.

The stock is projected to generate $ 33.38 billion in revenue, Wall Street estimates, up 18.9% year-on-year, and quarterly earnings are expected to be $ 3.84 per share, a slight decline. The company said it expects total spending in 2021 to be $ 70 billion to $ 71 billion and full-year spending in 2022 to be $ 91 billion to $ 97 billion.