Immersed in artificial worlds:
Facebook still has big plans for the long term with its daughter Oculus' virtual reality glasses
Photo: STEPHEN LAM / REUTERS
When Facebook's in-house conference "Connect 2021" starts today, Thursday, it should be about nothing less than the future.
Presumably Facebook boss
Mark Zuckerberg
(37) would like to talk only about the future, about augmented and virtual reality, about his "Metaverse" vision.
Via a long-term new Facebook that wants to link the real and the digital world in a virtual environment.
However, the past and a number of problems that could make the planned restart of the world's largest network considerably more difficult stand in the way of the future, which is still unclearly outlined.
A platform that apparently makes people sick and divides
On the one hand there are the serious allegations of the whistleblower
Frances Haugen
, who worked on the Facebook integrity team until May of this year.
She had leaked tens of thousands of internal documents, which - with the beginning of media processing and accompanied by its own appearances - paints the image of an unscrupulous corporation,
who is well aware of the damage caused by his platforms and his algorithms, but does nothing or too little about it out of greed for profit;
who knows that his Instagram network, which specializes in picture and video sharing, is damaging to the mental health of young people;
which promotes polarization in politically unstable countries through a lack of containment of misinformation, hate postings and conspiracy theories.
There have been allegations of this kind in the past, but not in this level of detail.
Zuckerberg tried to discredit the employee who described the allegations as "simply not true".
Observers assume that further revelations will follow from these papers and could pose a threat to the Facebook, Instagram and Whatsapp empire.
In any case, calls for strict regulation of the company by politicians are getting louder and louder.
A US agency is obviously rushing ahead: According to a report in the "Wall Street Journal", the Federal Trade Commission (FTC), which is responsible for competition and consumer protection, has already started investigations against Facebook.
It is still unclear what conclusions the US Securities and Exchange Commission will draw from the allegations and whether it may initiate its own investigations.
If it becomes apparent that the allegations are correct and that the practices criticized could have helped to justify Facebook's financial success, the likelihood that the SEC will also open the case increases, quoted the Financial Times as quoting Joseph Grundfest, a law professor at Stanford and former SEC commissioner.
The fines could be expensive - and put Facebook's future projects on the back burner.
The loss of youth
But that's not Facebook's only problem.
In the meantime, the network is struggling with declining user numbers from a core target group.
Young people are increasingly turning their backs on Facebook and perceive the network as "uncool".
The decline of 18 to 29 year old users is increasing and could develop into a veritable exodus in the next few years with a decline of up to 45 percent, according to an internal document from which the "Financial Times" reports.
Young adults would perceive Facebook content as "boring, misleading and negative".
As a network, Facebook is viewed as "out of date" and the time spent there as "unproductive".
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Zuckerberg has targeted these and even younger people, who are drawn to the Chinese competitor and video service Tiktok in large numbers, and in the meantime even considered developing an "Instagram for Kids" under 13 - despite the knowledge of how Instagram harms the psyche of young people can.
This week, Zuckerberg announced that it would invest billions in the fight for the young audience in order to optimize the company's own apps, especially for younger users.
In other words: In the future, even more short videos could be possible on Facebook and Instagram.
Apple becomes a risk to Facebook's revenues
Facebook has to finance the billions in investments mainly from advertising revenues, with well over 90 percent still the largest source of income. The proceeds are still gushing, but recently remained slightly below expectations. And there is a headwind from the new data protection requirements for Apple's iPhone. This makes it harder to personalize ads and makes it harder to measure the success of the ad. A business model that is essentially based on advertising income could be severely disrupted, Snap boss
Evan Spiegel
(31) revealed these days and thus sent the share steeply down.
Last but not least, the image of Facebook, which has been battered by the latest negative headlines, could at least cast doubt on large advertisers. "Customers are already wondering whether Facebook is a reliable and trustworthy business partner in the long term," the "Handelsblatt" quotes Eric Schmitt, Research Director at the Gartner consultancy. In any case, the "social trust" in Facebook has "hit rock bottom".
Perhaps that is why Zuckerberg will use "Connect 2021" on Thursday to again promote more trust in the company.
With a new name alone, as rumor has it, the Facebook boss will find it difficult to convincingly convey the restart of the world's largest social network among investors, customers and users.
The billion-dollar venture called "Metaverse"
Zuckerberg has high hopes for a project that he has been developing for a long time: His company is to become the provider of a so-called "Metaverse".
At its core, this is a digital parallel world.
People should be able to come together there in virtual rooms, such as classrooms or public places - or, with the help of augmented reality technology, be able to superimpose a virtual level on the rooms in which they can interact.
In this virtual world there should be shops in which customers can spend money on virtual products - such as sneakers that their avatar uses in the "Metaverse".
The human-controlled avatars should be able to go to concerts together in this digital universe or try on and buy digital clothes in virtual stores.
To make this possible, different technologies have to work together.
The charm for Facebook is there: Similar to Apple, Facebook would act as a provider of the platforms in the future and, for example, demand money from companies for their virtual representations and business.
In essence, Facebook is trying to act as a kind of app store of the "Metaverse" - and is targeting the audience that it has lost on its previous platforms: the younger users.
Ten billion dollar investment in virtual worlds
Facebook is investing a lot of money in order to soon provide the right hardware and software for its digital vision.
A hint: On Monday, the company announced that its spending on subsidiary Facebook Reality Labs will push profits by around $ 10 billion this year.
The social network giant has already been on a shopping spree in recent years: For example, Facebook has bought the data glasses company Oculus, whose augmented reality glasses are considered industry leaders. But also a company called PlayGiga, which specializes in cloud-based games. Now Zuckerberg wants to hire 10,000 new employees in Europe over the next five years to work on Metaverse projects.
All of this is somewhat reminiscent of a long-forgotten virtual world that was hyped a good ten years ago but soon disappeared from view: the video game "Second Life". Recently there have been more successful virtual worlds such as the game platforms "Minecraft" or "Fortnite". Graphically opulent - and thus immersive - these worlds are only conditional. And they were not originally intended as a parallel world with shops and squares.
That is probably different with Facebook's foray into the digital parallel universe.
"If they are in the metaverse every day, they will need digital clothing, tools and experiences," Zuckerberg said in an interview with analysts earlier this week, according to a report in the Wall Street Journal.
Investments in these worlds will not generate any profit "in the near future," Zuckerberg admitted.
But: "In principle, we believe that the Metaverse will be the successor to the mobile Internet".
Which hurdles Facebook has to overcome in the Metaverse
According to many analysts, Facebook reacted far too late to the smartphone revolution. Zuckerberg wants to avoid missing out on such a technological opportunity again by all means. However, there are still many unanswered questions about the great Metaverse Monopoly. For example, data transfer speeds are still considered to be too slow for an immersive experience among analysts. Virtual currencies still have to be further developed in order to actually be suitable as a reliable means of payment for digital goods.
And then there is also the question of who should monitor compliance with rules of conduct in such worlds.
Because bullying attacks, hate speech forums and theft of virtual currencies are also conceivable in the Metaverse.
In this regard, Facebook does not have a flawless track record on its previous platforms; the network giant has a hard time identifying, monitoring and quickly intervening.
It remains to be seen whether large numbers of users also trust that their virtual activities and data are well secured on Facebook.
But at least: Facebook would then be less dependent on advertising - more on a kind of digital toll for companies.
