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Facebook’s move to the metaverse is ‘an optical illusion,’ analyst says – Yahoo Finance

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Jefferies Sr. Analyst Brent Thill joins Yahoo Finance Live to discuss Meta COO Sheryl Sandberg stepping down, the road ahead for Meta, and the outlook for the metaverse.
BRIAN SOZZI: All right. Meta is the hottest ticker on the Yahoo Finance platform. Our news of Sheryl Sandberg stepping down as CEO. Let’s dive into what this departure means to Meta’s outlook. Jefferies Analyst’s Brent Thill joins us now. Brent, good to see you as always. So lots of different paths you could take here and perhaps one way to maybe look at if you’re an investor in here, this company is now going to shift major focus and resources to the metaverse. Well, the problem is the metaverse is not making any money and it’s really hard to define. How do you take it?
BRENT THILL: Yeah, look, the Sheryl news is obviously a blow given her commitment. But I think they have a clear leader who stepped in, has been there, and run multiple aspects of the business. So we don’t feel uncomfortable about that. But definitely a blow to the story in the interim. I think from the metaverse perspective, I don’t believe that’s the case. I think there’s an optical illusion that everyone’s created that they’re going after the metaverse when the reality is, the next call it next 3, plus years are going to be all ad driven. There’s no real new substitute revenue stream that’s going to come in.
So if you think about other stories, we talked about the analogy of Microsoft when they were the operating system company and they had to build Azure, which was their Cloud Infrastructure platform where the applications, companies go through pit stops. And we think this isn’t a pit stop that they do need to look for another revenue engine, they need to diversify the story. But make no mistake, the majority of the revenue is going to come from advertising for a long, long, long time. And they happen to have the best targeting engine on the planet to find our interest, and go after us.
And that’s why there’s so many advertisers that want to be on the platform. Because they have, number one, the biggest reach on the Planet of the number of users. And number two, they have the most sophisticated targeting engine. All you have to do is pull up Instagram and type in a few things, and you’ll instantly find how good it is. And so that’s going to drive the story in the interim, yes, they’re putting money in the next generation of the internet, yes, they’re putting money into Oculus and can they make money on this, we’ll see.
But I think that this concern and fear that they’re going to blow all this cash because they’re going after the metaverse is completely overdone in my opinion. Because at the end of the day, it’s still an ad driven model. And we do think they’re looking for a diversification engine. And they need to do more. And good for them to make the change, to get the company on the right course to find that. But I don’t think that they’re out of energy or speed or excitement from the advertising community.
Yeah, you’ve had some blows from the Apple privacy chains, yes, you’ve seen some macro headwinds on advertisers, and we’re concerned about the overall advertising market with the snap negative pre what the Google Comp, the Facebook Comp, which are all difficult coming out of the pandemic. So we’re going through that. And I think that’s the biggest issue facing the global advertising industry, it’s really just the macro slowdown not to move to the metaverse.
Hey, Brent, if I could take a step back for just a hot second here. Considering the time period that Sheryl Sandberg was at Facebook, and for the era that they were this advertising behemoth, the operations that for many of the cases being looked at as the adult in the room, if you will, that she had to make sure that this company was growing up and growing up quickly, when you think about her era her time, how will she be remembered, considering everything from the growth of their revenue all the way to some of the Cambridge Analytica data scandals?
And even to, let’s be quite frank, the representation that she brought in the form of a woman at the head of a major Silicon Valley company, and where the broader industry still needs to make strides?
BRENT THILL: I mean, there’s no question she had a massive impact. I mean, you know I think ultimately, every company and every individual along the way, is going to have some down takes. And some of the things you mentioned were clearly not a direct reflection of her at a time. But I think ultimately, she’s going to be remembered as someone that made a huge impact, and clearly for female executives helped led the way. And I think ultimately you’re seeing this now a lot of the tech companies are still massively underrepresented in their top ranks with females. And obviously, the tech industry is trying to change that.
Look, I think ultimately the individual that’s coming in to replace her has incredible experience running the company’s international growth products, a number of initiatives. So they didn’t just pluck someone off the street that just came out of college. I mean, you have an individual. Now that’s been in the company well over a decade and run multiple initiatives, including building the entire international business out for them. So I think if you look at the issues separate, there’s no question 8 below. And she has had a massive impact. And there will be a massive hole left by her departure.
But ultimately, I do think that this is one individual and they’ve got the talented bench, and they proved that they’ve got individuals that have been there for a long, long time that know the company, know multiple aspects of the business and can step in and lead. So I don’t I don’t believe that this is going to be a massive issue. I think you’re seeing that in the stock the stock has not negatively reacted in a big way that many would think given her departure. But look, she put in an incredible amount of time, incredible experience and had a massive impact on the company.
So I think we’ll see what ends up in terms of the next chapter. I’m sure she’ll go on to do phenomenal things. But I don’t believe, again, having covered tech for two decades, the quick reaction is when someone like this, of this caliber leaves that something’s massively wrong. I don’t necessarily– I’m not drawing drawing that. I’m drawing the line of, hey, this looks more like Adobe Microsoft, other great tech companies that merely take a pit stop and are changing the tires and washing the windshield, they’re going to get back on the road.
How long it takes to get them back on the road is again, the macro is coming in. The first thing that companies cut in a downturn is the macro, is advertising.
BRENT THILL: Brian, you brought up a good point on terms of female leadership, now out of all the tech companies you cover, is there someone or a group of leaders that might take that leadership baton away from Sheryl Sandberg that they could step up here and drive a lot of the key messages that she has been driving?
BRIAN SOZZI: Absolutely. So there’s two software CEOs and software named Amy. Amy Hood and Amy Weaver. Amy Hood at Microsoft. I’ve worked with Amy Hood for well over a decade, and I have incredible respect. She is, in my opinion, the single most important female exec out there right now in tech. And I’d say obviously, close number two would be Amy Weaver at salesforce.com. Not a traditional CFO, but came through the legal community. And again, everyone inside salesforce.com knows that when Amy snaps, her fingers she can hurt cats from Minnesota New Jersey and Florida into a room in California in two seconds.
She commands incredible respect and is an incredible leader. So I’d say right now those are the two that come to mind. There are others, and apologize for leaving the others out. But I’d say those are the two that really come to mind the top of my list.
Just quickly, pivoting back to Meta as we know that the ticker symbol is going to change soon, how quickly does the revenue model also change now that you have some of the executive, not just shake up but more so the executive change over here and the reprioritisation of where that revenue is being driven that is clearly in line here at Facebook?
BRIAN SOZZI: It’s a glacial change. As I said earlier, the advertising model is going to be here for a long time. So if anyone’s looking for a massive inflection or the metaverse, and all these creatures roaming in this new world, and in goggles, and whatever else you want to call it. It’s going to take forever. So it’s really an ad driven model. And I think what they’re trying to do, again, is what Microsoft, Adobe, other great tech companies did, was find another revenue engine beyond just the core. Oracle did this way back when. They were a database company and then they moved into applications.
Microsoft was the operating system company, and then went into Cloud Infrastructure with Azure. They went into gaming. They went into other areas to diversify. So it took those companies years, if not decades, to build some of these new businesses. Adobe with the Experience Cloud. They were the Creative Cloud, then they acquired their way into the Experience Cloud, which is one of the three main clouds they have. So again, the analogy is it’s going to take a long time.
They can do it. We believe that. Again, they have the user base. Yes, TikTok is a threat for the younger audience, and my kids are not on Facebook, they’re on TikTok. Yes, Snap is a threat. There are other gaming stories where you may end up going to the metaverse in other ways through other platforms than Facebook going forward. So there’s clearly a lot of risks ahead. But again, I think when you think about the company and what they’ve done even with reels, they were way behind in what was happening with TikTok. And I think there’s signs that they’re starting to catch up and show more progress in a product like reels.
So never count them out. And ultimately, I think, again, this is going to take a long time to figure out the revenue source from the metaverse. Yeah, they’re plowing billions of dollars into it. But I think it’s the right call because they need to make the move and try to diversify. And so that’s the risk. This diversification move may not pay off. I think it will, but it’s going to take time to actually show that. And the market doesn’t like uncertainty. And so a lot of investors are sitting out saying, well, I’ll wait to see the signs of the metaverse.
But again, I don’t think you need to look at that. I mean, can you look at the advertising business? And that that’s the single biggest driver.
BRIAN SOZZI: Brent, before we let you go, I caught a good note from you where you were crunching the numbers on the dating stock, so Match, Bumble, are companies like that recession proof?
BRENT THILL: There’s no recession in love. You need shelter, food, and love. And I think in times like this, you kind of realize like the consumer’s been going so hot and heavy with buying second homes, and you look at what’s going on. At the core, you need the community around you. You need friends, and your family, and you need love. And I think that we’ve said this, that our headquarters in New York there’s a restaurant across the street. There’s a Margarita called the Mother of Dragons that’s $30 for one Margarita. The cost of a dating app is 15 to $30 a month.
So I look at that and I’m like, OK, it’s incredible the value that daters get for what they pay. And again, I’m a 20-year-old married guy with three kids, so I’m not I’m not using this apps full disclosure. But I talk to my friends that are single and other colleagues that are single that use it, and I think there’s incredible value in what these companies have. I think they have incredible pricing power. I think they will be more recession-proof. Because you go back to the core, are you going to take the expensive trip to Asia or are you going to spend 15 to 20 bucks to ensure the basics things that you need when things are tough?
So no one’s immune attack. That’s for sure from the macro heads, the storms that are coming in on the macro side. But I think that Bumble with their female first app and they can diversify to this incredible $30 trillion of spend for females. And that’s a really big opportunity, and I really believe in what Whitney the CEO is doing, and her vision long term. It’s not happening short-term, but they can unlock this female spending power.
And then look at Match. Global brand from 18 years old to over 50 for the old fogies, can date. They have an app for every lifestyle. They have an app for every geographic region. In Japan, in Europe, the US. They’re incredibly well diversified. And a new leader coming in at match from Zynga, so we’ll see what he can do. But we like both stories and we think again, they’re more recession-proof than others. But again, no one’s immune. But we like both those names right here.
BRIAN SOZZI: Well, Brent, we here at Yahoo Finance, we love you, we love your analysis. Sending you a digital hug through the metaverse right now. Jefferies Analyst, Brent Thill. Always good to see you.
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Lamina1 Presents Inaugural “Open Metaverse Conference” Connecting the Worlds of Blockchain and the Metaverse for a Next-Gen Internet – Business Wire

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Featuring a keynote from co-founder and futurist Neal Stephenson, the first-of-its-kind event aims to empower creators and coders to build the Open Metaverse together
LOS ANGELES–(BUSINESS WIRE)–Lamina1, a Layer 1 blockchain optimized for the Open Metaverse, today announced its role as founding sponsor of the Open Metaverse Conference, a first-of-its-kind industry event bringing together the worlds of the Metaverse and Web3 to build a more open and immersive Internet. The two-day conference will take place from February 8-9, 2023 in Los Angeles, California, and will gather experts and builders spanning Metaverse experiences, Web3, and entertainment.

Co-founded by Neal Stephenson, renowned futurist and science fiction author who originally coined the term “Metaverse,” and cryptocurrency pioneer Peter Vessenes, founder of the first VC-backed Bitcoin company, Lamina1 will provide the infrastructure to empower rapid expansion of the Open Metaverse. As the founding sponsor of the Open Metaverse Conference, Lamina1 will provide a forum for critical conversations around identity, privacy and interoperability, while exploring how audience engagement, creative storytelling, and the technicalities of blockchain can work hand-in-hand to make the vision of the Open Metaverse a reality.
The Open Metaverse Conference will feature keynotes from renowned technologists and storytellers who are pioneering visions for the next era of the Internet. Attendees will hear from Lamina1 co-founders Neal Stephenson and Peter Vessenes, as well as Philip Rosedale, founder of virtual world Second Life (Linden Lab) and co-founder of virtual platform High Fidelity, John Gaeta, Oscar-winning VFX pioneer (The Matrix) and CCO of character persona company Inworld AI, Cathy Hackl, Metaverse and Web3 strategist and founder of design consultancy Journey, and other industry crossover leaders to be announced. Keynote sessions will be complemented by diverse speakers and side events spanning games, art, entertainment, and commerce. To connect these key areas of culture with the technology that enables them, the Open Metaverse Conference will also facilitate technological deep dives for attendees from leaders in Web3, immersive computing, and technology standards groups. Presenting partners include the Metaverse Standards Forum, the Open Metaverse Interoperability Group, and the Open Metaverse Alliance for Web3 (OMA3), all organizations fostering interoperability.
“We are at a moment in time when developers, creatives, and producers can finally design the seamless and persistent experiences we’ve dreamed about,” said Jamil Moledina, Vice President of Games Partnerships and Media at Lamina1. “The Open Metaverse Conference will serve as the big tent for everyone who’s thinking about creating never-before-possible experiences that allow creators and consumers to enter unique virtual worlds on a level playing field.”
“OMA3 is pleased to collaborate with Lamina1 and the Open Metaverse Conference in promoting interoperability,” said Robby Yung, CEO of Animoca Brands. “OMA3 looks forward to developing talk tracks to encourage the creation of a more open and immersive internet.”
The conference will encourage interdisciplinary dialogue through debates, pitch sessions, roundtable discussions, and networking opportunities to help drive new ideas and connections.
“We felt a real sense of urgency to facilitate discussion with our colleagues and creators across the spectrum,” said Rebecca Barkin, President of Lamina1. “We know that the Open Metaverse will be built collaboratively and with a set of shared values, and we’re happy to provide this forum to address the needs of the community and to solve big problems together.”
For more information on the Open Metaverse Conference, visit www.openmetaverseconf.com.
About Open Metaverse Conference 
The Open Metaverse Conference (OMC) is an industry-first event presented by Lamina1 focused on bringing together the Metaverse and blockchain technology. The conference gathers key stakeholders spanning developers, creatives, producers, product owners, and executives to ask and address big questions around the development of a truly Open Metaverse that leverages open-source, collaborative principles and blockchain decentralization.
About Lamina1 
Lamina1 is a Layer1 blockchain optimized for the Open Metaverse. The brainchild of legendary futurist Neal Stephenson (who first conceptualized the term “Metaverse” in his 1992 best-selling novel Snow Crash) and Peter Vessenes, a foundational leader in the crypto space from the early days of Bitcoin – Lamina1 is on a mission to deliver the blockchain technology, interoperating tools, and decentralized services that will establish it as the preferred destination for creators building a more immersive Internet. It is the first provably carbon-negative blockchain in the world.
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Wachsman
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Facebook Founder, Zuckerberg Drops Out Of 10 Richest Men After Losing Half Of Fortunes – SaharaReporters.com

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According to Forbes, the Facebook founder has lost more than half his fortune—a staggering $76.8 billion—since September 2021, dropping him from No. 3 on The Forbes 400 list of the U.S.’ wealthiest people to No. 11. Worth $57.7 billion on this year’s list.
 
Meta chief executive officer, Mark Zuckerberg has lost his spot in the list as one of the 10 richest people in America.
According to Forbes, the Facebook founder has lost more than half his fortune—a staggering $76.8 billion—since September 2021, dropping him from No. 3 on The Forbes 400 list of the U.S.’ wealthiest people to No. 11. Worth $57.7 billion on this year’s list.
Zuck trails Walmart heir Jim Walton, former New York City mayor Michael Bloomberg and other tech moguls such as ex-Microsoft CEO Steve Ballmer and Google founders Sergey Brin and Larry Page. No one in America has lost as much money over the past year as Zuckerberg.
He has the cratering stock price of Meta (formerly Facebook) to thank for his exit from the top 10. Shares have plunged 57% since last year’s Forbes 400, which used stock prices from September 3, 2021. Tech stocks are generally in a slump with the market downturn, but Meta’s fall outpaces both the Nasdaq (-9.8%) and the S&P 500 (-13.5%), as well as Microsoft’s 14% decline, Google-parent Alphabet‘s 25% drop and Amazon’s 27% dive.
Investors are spooked by a privacy policy update from Apple last year that made it harder for tech companies to track users across apps, impacting Meta’s ad sales. Meta reported its first-ever quarterly revenue decline in July–a 1% drop, to $28.8 billion.
“Facebook makes most of its money from advertising, and now it just doesn’t have that data anymore,” says Mark Zgutowicz, an analyst at research and investment banking firm Benchmark.
“All those data signals went away, which basically means that advertisers are having trouble telling whether a campaign was successful or not.”
Compounding the problem for Meta, TikTok is luring away advertisers, along with lucrative Gen Z and millennial users. In February, Meta announced its first-ever quarterly loss of daily active users. A recent internal report showed that Meta’s TikTok clone, Instagram Reels, is struggling to compete, according to Wall Street Journal report.
Under normal circumstances, a slight dip in revenue might be manageable, but Meta is also investing heavily in virtual reality and the metaverse, which is dragging down operating profit. In 2021, the company’s metaverse division, Meta Reality Labs, lost $10 billion. While the metaverse is all Zuckerberg wants to talk about, investors are less enthusiastic so far. “It’s a long tail investment and, for now, it’s kind of a cash suck,” Zgutowicz says.
Zuckerberg first became a billionaire in 2008, just four years after founding Facebook. At 23, he was the youngest self-made billionaire at the time, debuting at No. 321 on The Forbes 400, worth $1.5 billion. By 2011, Zuckerberg’s net worth had increased nearly 12 fold to $17.5 billion.
This year isn’t the first time Zuckerberg’s net worth has taken a dive. After Facebook’s famously disappointing IPO in 2012, Zuckerberg fell from No. 14 to No. 36 on The Forbes 400. But it didn’t last long. The following year, Zuckerberg bounced back and, up until now, his fortune has continued to climb. Despite the litany of controversies and scandals plaguing the company, Facebook’s ad machine had reliably churned out enough money to impress investors, sending Zuckerberg’s net worth soaring to $134.5 billion last year, his highest net worth ever.
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Disney CEO Bob Chapek plotting a metaverse for Disney+ that will recreate their parks online – Daily Mail

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By Alex Oliveira For Dailymail.Com
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Disney is plotting a metaverse that would let people experience the most magical place on earth without ever setting foot in the theme park.
CEO Bob Chapek said the media giant’s metaverse would exist on its streaming platform, Disney+, and allow ‘the 90 percent of people that will never ever be able to get to a Disney park,’ to experience it in virtual reality.
‘We call it next-gen storytelling’ Chapek said in an interview with Deadline, noting that he didn’t like use the phrase metaverse ‘because it has a lot of hair on it.’
But regardless of whatever Chapek prefers to call the planned platform, many have responded by calling the move out of touch with Disney’s fanbase, and argued that if the parks stopped hiking prices more people would be able to visit.  
The move comes as Chapek – who took the helm at Disney in 2020 – struggles to make a name for himself in the shadow of his innovative predecessor, Bob Iger, and keep afloat amid controversies ranging from the park’s rising prices, to Disney’s stance on Florida’s Don’t Say Gay bill. 
Just last week, Chapek broke a months-long silence on an apology he issued in an attempt to quell Disney staff who were outraged by his failure to speak out against the controversial bill last spring, saying he chose to remain mum on the matter because he didn’t want to get Disney caught in a ‘political subterfuge.’ 
Disney CEO Bob Chapek said the media giant’s metaverse would exist on its streaming platform, Disney+, and allow people to experience park rides in virtual reality
Disney’s metaverse move comes as Chapek – who took the helm at Disney in 2020 – struggles to make a name for himself in the shadow of his innovative predecessor, Bob Iger
Chapek characterized the Disney metaverse as a way to experience the theme parks for the multitudes of people who are unable to actually make the trip in person.
‘We wish every person would have the opportunity to come to our parks, but we realize that’s not a reality for some people,’ he told Deadline, ‘we have before us an opportunity to turn what was a movie-service platform to an experiential platform and give them the ability to ride Haunted Mansion from a virtual standpoint.’
He said metaverse users would have an experience beyond what regular parkgoers have, and be able to step out of the ride-cars to explore sets and interact with characters. 
‘Maybe we’ll give them the opportunity what every single person in the park wants to do, and unfortunately too many of them do it, just to get off the attraction. See how it works, see how those ghost dancers move,’ he said. 

But many responded to the news by saying if Disney would just stop raising its prices, more of those 90 percent of people who cannot visit the parks would be able to.
‘Damn Disney. Just say it direct like that,’ wrote tech critic Juan Carlos Bagnell on Twitter, ‘90% of the HUMAN POPULATION is too poor to visit our parks, but hopefully some are less-poor-enough to own VR goggles and ride our rides in a metaverse clone…’
Commenters on the Deadline interview were equally unimpressed, with one saying ‘The reason 90% of people may not be able to experience the parks is because you keep hiking the cost of GOING to the parks beyond what most people can actually afford, Bob.’
‘Costs are up at the parks. Moral appears to be down. Iger had imagination and could adapt,’ said another.

Disney park prices have skyrocketed since Chapek was fully given charge at Disney in 2022. At California parks, ticket prices jumped 6 percent to $164 for single-park passes, while the price of getting into more than one park over the course of a day rose 9 percent to $319.
At the Florida parks the price to get into the park after 2pm rose to $169, while before 2pm fans were asked to fork over $194. Those prices could also rise based on an increased demand on any day.
‘If you’re the kind of person that budgets or saves for vacations, Disney Parks aren’t for you any longer,’ wrote a fed-up customer on Reddit, ‘That’s a Premium Physical Experience, and there’s plenty of national and international wealthy families to afford going indefinitely.’
And in August, as inflation scorched the US economy, Chapek warned those prices could continue to rise.
‘It’s all up to the consumer,’ he said, according to The New York Post, ‘If consumer demand keeps up, we’ll act accordingly.’
Disney’s metaverse would allow people to experience park rides like the Haunted Mansion without ever setting foot in Disney World
Chapek noted the virtual reality experience could go beyond simply sitting in the car and experiencing the ride the way park-goers do, but would allow people to step off of the tracks and explore the ride sets up close
Chapek has hardly been the happiest CEO on Earth since he took the reins at Disney.
After beginning his tenure in February, 2020, he was thrust immediately into the chaos of navigating Disney through the perils of the pandemic, which saw the media company’s primary revenue streams – theme park revenue and movie theater tickets – vanish like a pair of glass slippers at midnight.
To help steady the ship, Iger – much to Chapek’s ire, reportedly – was kept on in a leadership position through 2021.
But as soon as Chapek was given full control in 2022 his price hikes had customers raising eyebrows about whether he was up to the same scratch as the visionary Iger.
Those doubts were doubled-down on by Disney staff after Chapek decided to remain quiet on Florida’s Don’t Say Gay bill, a law which barred schools from discussing sexuality or gender with children between kindergarten and third grade.
Many Disney employees viewed the law as homophobic and an affront to the inclusive values of Disney, and publicly voiced their outrage that Chapek did not speak out against it.
Chapek said the metaverse would also work in conjunction with real-world visits to Disney theme parks
Disney is plotting a metaverse that would let people experience the most magical place on earth without ever setting foot in the theme park
He later apologized to staff, publicly decried the bill, and announced Disney had paused all its political donations within Florida.
Last week, Chapek addressed that apology for the first time since he issued it, saying he had struggled to balance the needs and beliefs of every one of his employees and customers.
‘What we try to do is be everything to everybody,’ Chapek told The Hollywood Reporter in a recent interview, ‘That tends to be very difficult because we’re The Walt Disney Company.’
‘We certainly don’t want to get caught up in any political subterfuge, but at the same time we also realize that we want to represent a brighter tomorrow for families of all types, regardless of how they define themselves,’ he said.

Published by Associated Newspapers Ltd
Part of the Daily Mail, The Mail on Sunday & Metro Media Group

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