Meta (FB) may be too early on investing so much to build the metaverse, says early Facebook investor Reid Hoffman.
"Metaverse is one of the [technologies] where it's inevitable it happens, but when and how is a very big question," the LinkedIn founder and "The Startup of You" author said on a new episode of Yahoo Finance Presents (video above), later adding: "I don't see the signs yet that tell me that the metaverse is going to happen."
Hoffman explained that "the signs I look for are: Which application really starts taking off? … I think entertainment is the first thing that you're going to really see. And obviously, the proponents of the metaverse will say: 'No, no… the pandemic has accelerated into it. We're doing, you know, video interviews in it. We're doing, you know, work in it. We're doing our shopping in it, we're doing our dating, and we're doing all this stuff.' And I think that's still a fair ways away."
After shocking investors in early February by outlining $90-$95 billion in expense spending this year as the social media giant builds out Zuckerberg's futuristic metaverse, the company is pulling back on that target amid slowing top line growth.
The new goal, which reflects more of an effort to protect profit margins, is now $87-$92 billion.
"These investments are going to be important for our success and growth over time," Zuckerberg told Wall Street analysts on a recent earnings call. "I continue to believe that we should see them through. But with our current business growth levels, we are now planning to slow the pace of some of our investments."
The pullback on spending comes after a mixed quarter for Meta, one where it rebounded from a terrible fourth quarter but was still not showing the same growth rates as in the past.
Meta's stock is down 41.6% so far in 2022 amid the larger rout in risk assets.
Hoffman said that he has confidence in Facebook getting its investment spending right given its track record.
"Facebook is an extremely capable company," Hoffman said. "They have done a lot of smart investing and building of things."
That said, the tech investor then expanded on his initial question: "If you're building the technology because you think the scale go to market with is three-to-five years from now, you have to be building really hard right now. … if it's not five years from now, maybe seven, then it's technology that you should be building four years from now."
Asked if Facebook was early on building so rapidly for the metaverse today, Hoffman replied: "They might be. That's the primary question."
Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.
Read the latest financial and business news from Yahoo Finance
Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, and YouTube
Related Quotes
Thank you for your service, Charlotte.
A Disney park guest was upset with Epcot security after being asked to buy a new shirt because the one she'd worn to the park was against the dress code.
U.S. Labor Secretary Marty Walsh says it's time for his new billionaire acquaintance Elon Musk to give him another phone call as the Tesla CEO eyes mass layoffs at the EV maker.
The service marked the first time that the Cambridges and Sussexes have been seen together as a foursome since Commonwealth Day in March 2020
She was surrounded by the paps with her beau.
Walt Disney parkgoers are seeing lots of changes to the most magical place on Earth lately. It's launched a few big projects since reopening after covid closures, including a new "Guardians of the Galaxy" ride and the infamously expensive "Star Wars" hotel Galactic Starcruiser. You may also have heard Disney's announcement in 2020 about transforming the classic ride Splash Mountain into something new.
An expert witness in the defamation trial against Amber Heard by her ex-husband Johnny Depp is speaking out about the backlash he received as a result of testifying.
With the release of Jurassic World: Dominion around the corner, a new clip has surfaced teasing the…
Ex-‘GMB’ presenter has repeatedly been accused of being ‘obsessed’ with the duchess of Sussex
Gigi Hadid and Frankies Bikinis are back with the second drop of their swimwear collaboration…
The third and most recent episode of the newest Disney Star Wars show, Obi-Wan Kenobi, featured a pretty big and wild appearance by a classic character. That moment probably distracted a lot of folks from a less big, but also cool reference to the Respawn-developed video game, Star Wars Jedi: Fallen Order.
"Do not, under any circumstances, get into a conversation with the guy sitting on your right."View Entire Post ›
It’s official: Queen Elizabeth has finally met Prince Harry and Meghan Markle ’s 1-year-old daughter, Lilibet, according to…
The royal women were unexpectedly twinning at a service for the Queen
A source confirms to ET that Queen Elizabeth II finally met Prince Harry and Meghan Markle’s little girl, Lilibet, at Trooping the Colour on Thursday. This is the first time the queen has seen Meghan and Harry with both their kids, since the Duke and Duchess of Sussex stepped down from their royal duties in 2020 and moved to California. Amid Queen Elizabeth’s Platinum Jubilee festivities, ET has learned that HRH will skip two events in her honor; but will attend great granddaughter Lilibet’s first birthday celebration.
In an excerpt from her new memoir Rough Draft, published by Vanity Fair, the broadcaster recalled being told by a news director at one of her first jobs that her “boobs looked too big” for TV.
Prince Charles was feeling the love towards Kate Middleton today! The 73-year-old royal showed a moment of affection towards his daughter-in-law by blowing her a kiss as he walked into Queen Elizabeth's national service of thanksgiving on Friday at St. Paul's Cathedral in honor of his mother's Platinum Jubilee. The Prince of Wales and his wife Camilla, Duchess of Cornwall, sat next to Kate and her husband, Charles' son, Prince William during the service.
Social media posts, no matter how old, can have devastating effects, like having your college admission or job offer pulled. Here's how to erase them.
Elliot Page opened up about the time he was forced to wear a dress at the Juno red carpet premiere…
The Duchess of Cornwall, the Duchess of Cambridge, Princess Charlotte, Prince George and Prince Louis arrive for the Trooping the Colour ceremony at Horse Guards Parade in central London. Credit: PA

source