Why is Mark Zuckerberg so bullish on Metaverse? 🥽
Positioning the company for long term vs short term, a lesson.
Welcome to the 91st edition of the GrowthX Newsletter. Every Tuesday & Thursday I write a piece on startups & business growth. Today’s piece is going to 94,400+ operators & leaders from startups like Google, Stripe, Swiggy, Razorpay, CRED & more
Meta shares have fallen by 70%. The total investment in metaverse stands at $15 billion. Here's why Mark is so bullish on Metaverse ⬇️
Quick context 🗓
If you haven't heard yet, Meta shares plunge 24% yesterday to the lowest price since 2016. It's currently hovering at $97 per share. It all triggered when Meta released its second straight quarterly decline in revenue. Plus, Meta’s Reality Labs division, which houses its VR headsets, lost over $9 billion in the first three quarters.
What is going on in the public markets? 🤔
The holy grail of why everyone is going bearish on Meta is it's spending on metaverse, rising competition from Tik-tok & Musk's statement that he doesn't care about critics. The caused the share price to nosedive.
But, here's why sceptics are wrong about metaverse ⬇️
Meta's core business is - " advertising " 💸
But, how many times is a user going to open FB/IG/Tik-tok in a day? How much time are they going to spend watching videos / ads? There is a limit to this frequency of usage. That puts a limit on how much advertising could make over a long term with what Meta has.
But, what if you change the rules of the game? 🧠
What if you no more have to solve for user frequency? What if the user never exits your ecosystem of products? What happens then? Simple - you define the money making (monetisation) game.
And, that's what Meta is chasing with metaverse 🗺
The ecosystem play (wink-wink Apple) will allow Meta to go from being just a social media heavy company to a truly ecosystem company where advertising will be a part of the overall revenues. Imagine in-metaverse purchases, added advertising options & a line of new metaverse-apps is where the next wave of revenue growth exists.
So, that brings us to the most important question 🥲
Why are markets penalising the long term move? Simple- markets are emotional to their true sense. I won't be surprised if the stock price goes even further down. But, it will be most valued stock for long term investors.
Am I sure this would happen? yes. Have I put my money on Meta stock? absolutely!
That was the Meta story ✨
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