Facebook’s metaverse-tinted glasses

Facebook shares are down more than 4 per cent today after it lowered expectations for the rest of the year and beyond. It said the pace of revenue growth would “decelerate significantly on a sequential basis as we lap periods of increasingly strong growth” that had been underpinned by the pandemic recovery.

Like Alphabet, Apple and Microsoft the day before, its second-quarter results had breezed past expectations, with revenues up 56 per cent to $29.1bn and profits doubling to $10.4bn. The digital ads that drive its business saw strong demand from brands but it warned changes to Apple’s privacy policies could have a “greater impact” going forward.

Active users are up 7 per cent year-on-year at 2.9bn and it is video that is currently doing most to retain them, accounting for almost half of all time spent on Facebook now. For the future, there is the transmogrification of Facebook into messaging superapps that combine greater privacy with access to all kinds of services and social commerce.

Hang on. That was Mark Zuckerberg’s vision of the future back in 2019. On Wednesday, he came up with a different one. The future for Facebook is a platform called the metaverse. “We believe that this is going to be the successor to the mobile Internet,” he told analysts, promising to bang on about it a lot more in the coming months.

He began talking about it in an internal address to employees last month and expanded upon his ideas in an interview with The Verge last week. On Monday, the social network announced it was forming a Metaverse product group.

The metaverse, a concept first put forward in Snow Crash, the 1992 sci-fi novel by Neal Stephenson, involves creating an immersive web experience for users through augmented (AR) or virtual reality (VR) technology.

Zuckerberg said on Wednesday the defining quality would be “presence”, the feeling that you were really there with another person or in another place. “You’re basically going to be able to do everything that you can on the internet today, as well as some things that don’t make sense on the internet today like dancing,” he said.

For that to happen, Facebook has to make big advances in hardware, such as with its still bulky VR headsets and forthcoming AR glasses. It will also have to spend billions on content and apps, work out standards and protocols and get rivals such as Apple, Google and Microsoft to co-operate. It will also be taking on the more experienced games industry.

In addition, there is the small matter of making this appealing enough to users for them to accept a radical change in how they interact with technology. The 3D metaverse sounds a lot more exciting than 2D messaging apps, but it’s likely to remain science fiction for some years yet.

The Internet of (Five) Things

1. Didi jumps, SoftBank dumps
Shares in Didi Chuxing jumped by almost half in pre-market trading following a report that the embattled ride-hailing app was considering going private just weeks after its $4.4bn US stock market launch drew the wrath of Chinese regulators. SoftBank is selling a large chunk of its stake in Uber as it wrestles with heavy losses from its big bet on Didi. Regulators in Beijing have held a call with executives from global investors, Wall Street banks and Chinese financial groups to try to ease concerns about a broad crackdown. The FT View is that viewing success as a threat to be contained could cost China dearly.

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2. Robinhood’s ropey debut, Amazon roll-ups
Robinhood shares were down 12 per cent halfway through their first trading day, revealing lacklustre investor demand for the IPO of the app that brought fee-free trading to millions of Americans. In his Inside Business column, Richard Waters assesses the chances of Big Tech maintaining its earnings outperformance. Amazon reports after the bell and Dave Lee has been looking at how, in the past 18 months, at least 69 start-ups have raised some $7bn to begin buying up successful Amazon sellers, in the hope of building a collection of top brands.

3. Spotify Discovery dissed by majors
Spotify’s “Discovery Mode”, intended to prioritise an artist’s songs on select music feeds in exchange for reduced royalties, has not gone down well with the major labels, reports Anna Nicolaou. Privately, some executives grumble that Spotify is creating a new version of “payola”, the controversial practice in which record labels pay radio DJs to promote songs.

4. Samsung profits from chip shortage
Samsung Electronics said it was bullish on prospects for its chip business in the second half, but warned of growing supply chain risks due to a Covid resurgence. It reported a 73 per cent year-on-year jump in second quarter net profit to Won9.6tn ($8.4bn) as strong demand for electronics prolonged a global chip shortage.

5. Euro telcos more upbeat, Virgin’s fibre push
The European telecoms sector has provided a more optimistic outlook for the year after Nokia, Cellnex and Telefónica upgraded expectations on the back of robust results, reports Nic Fildes. In the UK, BT shares were down as customers spent less at its global services division. Virgin Media O2 will expand its fibre network to more than 14m homes and businesses over the next seven years to take on BT and smaller alternative networks.

Forwarded from Sifted — the European start-up week

Founders of $1bn “unicorn” tech companies are springing up at a quicker rate than ever in Europe — but where are they all coming from? Using data from Dealroom, Sifted looked into which universities count the most European unicorn founders among their alumni. The leaders were the University of Cambridge, Insead and Technical University Munich, but there were some surprise entries in there as well.

Elsewhere, investment in European start-ups from the Middle East has more than tripled so far this year, according to new data. In 2020, €1.6bn was invested in European tech companies from the Middle East region, compared to €5.3bn already over the past six months. Sifted also looked at the breakout European fintechs of 2021, how supercomputing will help Europe revive the Concorde dream and the top perks that start-ups are offering their employees.

Tech tools — Samsung’s 49in gaming monitor

As Facebook talks about immersive experiences, Samsung is providing one, with this 49in curved gaming monitor available for pre-order from today. The Odyssey Neo G9 features the first Quantum Mini LED display, with the LEDs a fortieth of the height of conventional ones and the tech making dark areas darker and bright areas brighter — a peak brightness of 2,000 nits and a static contrast ratio of 1,000,000:1 are cited. The screen has a 32:9 aspect ratio that offers Dual Quad High-Definition 5,120×1,440 resolution, a rapid 240Hz refresh rate and 1ms response time. The G9’s coolness factor is increased by a customisable lighting system for it, although Engadget swoons at the $2,500 price tag.