Last Friday, I attended the meeting of Turkish IT NGOs. This is a group that meets once a month on average and has been maintaining “togetherness in the IT sector” for more than 10 years. Someone in the group said, “Shall we talk to the metaverse, though I don’t understand what it is.” It is. With its attractive name, it makes you feel as if you will lose something if you do not take part.
At the meeting, I said: Metaverse = LifeBuoy
Metaverse has been pretty popular ever since Mark Zuckerberg introduced it in October last year. Every day, at least 1 out of 10 press releases, and even 2 or 3 depending on the day, have a relevant or unrelated Metaverse part.
Although the idea of the virtual world is not new. Second Life in the 2000s was that kind of application. Even the older. Metaverse is named by Neal Stephenson, who uses the definition of “multiverse” in his 1992 book Snow Crash. He writes in his book that “the Internet will evolve into a virtual reality-based form” and states that “people will use their avatars to explore the online world.
It’s also been featured in movies. The first (1982) and second Tron (2010) movies, deal with the idea of getting into the game (computer)and living there. I put the video below. The latest 2021 movie Ready Player One is also alike.
Facebook took this idea and introduced it as a new idea to the market. Because the situation is critical.
So Why is the Metaverse Lifeline?
Last week, the balance sheets were announced in the USA. Of these balance sheets, the one belonging to Facebook was very interesting. Because as soon as it was announced, the company’s market value, which once was close to $1 trillion, suddenly fell by $232 billion.
It is noted that this is a world record loss. The biggest loss of market value of a company in the world. The decline has continued since then, and today its market cap stands at $590 billion. Whereas, on September 7, 2021, Facebook’s market cap had been peaked at $1,078 Trillion.
As you can see from the 1-month chart, the company’s shares were $323 on February 2 and fell 27% to $237.76 the day after the balance sheet was announced. It fell a little more after that. According to data on Friday, February 11th, a total price of $219.55 has emerged, down 34% from last month’s average.
But why did Facebook’s market cap and shares drop, and how does that relate to Metaverse?
Why Google And Facebook Don’t Want To Show Which Data They’re Looking At
This title was exactly the title of an article I wrote a year ago[1]. The article describes, Facebook and Google’s efforts to prevent ATT (application tracking transparency), which Apple will deploy in the new version of the iPhone’s operating system.
Apple is saying that iPhone users should have control over the applications installed on the phone, activated this system called ATT in April 2021 with iOS 14.5. Thanks to this application, users became able to see which application was accessing what type of data. For example, there are some applications that we see also look at the mobile bank application, although they do not have the right.
That’s what both Facebook and Google are trying to avoid to show to their users. Thus, before the introduction of ATT, Facebook repeatedly put forward the idea that ATT would hinder the marketing of SMEs (in fact, did not say that the advertisers would advertise less, that is, it would make less money). This is an excuse they come up with whenever felt stressed. He placed advertisements in the biggest newspapers in the USA that the income of SMEs would decrease. The lobbying continued its work at all levels. So much so that he opened a website where counter-opinions were published, calling it the voice of SMEs, etc. [2][3].
Google, on the other hand, has moved to do the same through developers, telling them “You’ll make less money from Apple (ATT) (in other words, you’ll be given fewer ads on iOS)”[4].
Here, we, the users, who need to talk, tried to understand what this ATT does. Because we recklessly scatter our data here and there. The ads Google and Facebook refer to here are ads served to us based on our data from our mobile phones. If we provide fewer data, Google and Facebook can also sell fewer ads. That’s the whole point…
Facebook’s record loss of market value already shows how valuable our data is. That means Personal Data is that lots of billions of dollars valuable.
Before continuing, let’s remind; Let us remind you again that we should give importance to which of our data is used and by whom. Especially when it comes to using our data, we have to be careful if there are raging applications that are unknown what they are doing and that lead to manipulation. Last year, we insistently emphasized this in the Whatsapp fait accompli.
Facebook Can’t Earn Money If Can’t Get Data of Users
After ATT went live in April, it happens what has been expected. Facebook realized somewhere in the middle of the year that its revenues were affected. This situation was also conveyed to the press with the headline “PANIC”[5].
As we said in the paragraph above, Facebook’s situation became clear when the year-end results were announced. Moreover, it was observed that the decrease in advertising revenues will continue in 2022. Although it generated higher revenue in 2021 than the previous year, it failed to meet expectations and the company has reported that its revenues will be affected by at least $10 billion this year.
Direct response (DR) advertisers (buyers with filters) have seen performance drops in their Facebook ad campaigns due to the impact of ATT on targeting, measurement and attribution. Advertisers using Facebook for brand promotion, on the other hand, were less affected or not at all because they did not use personal data and pumped the brand to the general public.
In addition, in the light of various scandals and emerging information, it was reported that the number of daily Facebook users fell for the first time in the company’s 18-year history. In the last 5 years, especially young people have been avoiding Facebook[6].
This Is Why Metaverse Is A Life Buoy Idea
Here is the picture that started to go into this bad decline, Facebook has no right to say in mobile phone ads. App Store (iOS) and Google Play (Android) manage ads (more precisely, apps).
Facebook’s ad drop is only valid for iPhones. Android (Google) is still targeting, but the problem is; iOS users spend more money. For example, iPhone users spent 41.5 billion dollars, 64% of the 64.9 billion dollars spent in the first half of 2021, while Android users spent 36%, that is, 23.4 billion dollars[7].
On the contrary, it has been a win for Google, its advertising platform. Some, if not all, of the ads that escaped from iOS due to ATT, came to Google Play. In a way, Google took what Facebook lost. So much so that a 33% jump is mentioned in Google.
That’s what Metaverse means for Facebook. So it will create its platform. You can see, everyone is ready to get a space on the platform from now on. So pretty obviously that Facebook plans to get back its lost advertising revenues thanks to Metaverse.
For Whom Do the Bell Toll? for Facebook?
Let’s borrow the title of Ernest Hemingway’s novel and use it for Facebook.
Users — especially young — began to avoid Facebook. Data leak scandals exploding, movies like Social Dilemma showing how data can be misused, articles, ex-employees like Frances Haugen describing internal abuses, most importantly the US Senate inquiries sparked by the Cambridge Analytica disgrace…… blah blah blah blah.
Zuckerberg needed to get himself and Facebook out of this mess. First, he hid Facebook’s name and took him in the back of a newly created company called Meta. Then the Metaverse emerged.
So how was Metaverse conceived?
How Did the Metaverse Begin?
Jason Rubin, the manager of Oculus, the “Augmented Reality” company that Facebook bought for $2 billion in 2014, sent an e-mail to Board member Marc Andreessen in June 2018 with the subject of “The Metaverse” and said that Oculus’ rise up, consumers’ consumers[8]. He wrote that the way to break his indifference to these virtual glasses is to create an environment called Metaverse. Indeed, users were so uninterested in these virtual glasses/headphones that Google closed its virtual platform, DayDream, in those days.
So Metaverse was probably a lifebuoy for Oculus, not Facebook, until this year.
Rubin, who is currently the vice president of Metaverse content, wrote that if action is taken immediately in 2018, the project will be completed within 4 years. Now Metaverse assumed will be completed by 10+ thousand engineers in 5-10 years from now on [9].
So even though it’s been stated that Metaverse has been in development since then, it seems like it was only recently that Zuckerberg heard the bells. He’s already quickly describing the amount of money he’ll spend on the project and the number of staff he’ll hire, so Metaverse will probably be taken more seriously.
So everyone needed a new marketing tool/story. Even before the Metaverse was even fully understood, everyone began to take up space on the platform and to buy plots of land from the environment.
But I think the place where it was taken most seriously was Turkey. The table below shows the countries that buy the most land. As you can see, Turkey is by far the leader. This reminds me of the sentence I read during the dot.com crisis in 2000;
“Why did the dot-com market explode? Because almost everyone over the age of 30 invested money in roughly outlined projects made by those under the age of 30 saying ‘don’t miss a thing'”.
Will Metaverse Succeed?
Metaverse is a project that does not only belong to Facebook. But generally, people do not yet understand what it is. Like technological idioms that I sometimes think are put in too obscure, this one gives off the air of something mysterious. But the summary; this is an ad selling-monetization platform.
For whom? Nowadays mainly it is meaning for Facebook. Those on the platform will try to reach them by catching Facebook’s current customer potential + the young audience expected to attract new ones. In return, the advertising or platform fees they will pay will make Facebook rich. Maybe it will increase the market value, which has fallen by half today, again.
Is this achievable? It’s possible. But I think of Second Life or FarmVille madness. When I called a Farmville friend who worked at Turkcell in those days, I heard the sentence “stop now I need to water my vegetables, I’ll call you soon”. That was like a pandemic. But what happened next, these platforms were abandoned with the speed that everyone was adopting. Games or platforms are going rise and then out of date.. then being abandoned, as Facebook’s loss of members after 18 years shows. Is it just a fad in the Metaverse?
Or can what is described technically or legally be achievable?
We ask this because there are so many “Crazy Tech Projects” that fail. You can see the articles written for those who started with big claims and were left silently because the goal could not be reached. The closest example is Google Glass.
We will explain in another article, even 5G is not the 5G that we were told in 2015. Not just the speed, but a threshold would have been bypassed, but could not. This threshold, that is, the number of simultaneous users and latency claimed for 5G in 2015, did not succeed. For now, those dreams are left to 6G.
Both technical and legal problems need to be resolved for Metaverse as well. Can it be resolved? We’ll see. Even Zuckerberg speaks cautiously. “Meta may need to invest billions of dollars for years until the multiverse reaches the necessary scale,” the company said at Facebook Connect, its augmented reality conference.
In the meantime, let me note again that the data of people who enter Metaverse excitedly will be sucked well. You know, the data that Facebook is uncomfortable with “showing how much it is used by Apple”. I am reminding this again.
Is Metaverse a Realm of Escape from Reality?
Finally, I would like to mention one more thing. Besides the fact that Metaverse is an “advertising” and “game” environment, is a virtual dream being created for people to provide an escape from the troubles of real life?
Because the “Outsourcing” business model, which started to dominate the world in the 1980s, took the money from the middle class and carried it to the newly created upper middle class (SMEs and entrepreneurs providing outsourcing services) but mostly to the newly created super-rich class.
You can see it from the Credit Suisse wealth triangle on the side. According to 2020 figures released in 2021, their number is 583 million upper-middle-class and 56 million super-rich, respectively. The assets they manage are $164 trillion + $192 trillion. 85% of the world’s total wealth). In other words, 12.2% of the world’s adolescent population uses 85% of the world’s wealth, while 88% owns 15% of the world’s wealth.
Then these people need to be busy with something other than why they earn little money. For example, the e-commerce carriers that we have seen on the streets recently and whose number has reached 1 million in Turkey. Is that a reason for all the magic, surreal vs. movies, games, and environments that have been imposed in recent years? These surreal environments created to overcome the resentments/resentments in life, are false (sorry, I was going to say virtually) environments being prepared for people who feel poor, ugly, unsuccessful, where they will feel good and “forget”?
You can see the trailer for the 1982 movie Tron below.
[1] Google ve Facebook, Hangi Verilerimize Baktığını Neden Göstermek İstemiyor?
[2] Facebook’s Misleading Campaign Against Apple’s Privacy Policy
[3] Small businesses deserve to be heard
[4] Preparing our partners for Apple’s iOS 14 policy updates
[5]Facebook Users Said No to Tracking. Now Advertisers are Panicking
[6] Facebook’s user numbers shrunk for the first time in its history
[8] Facebook’s Meta mission was laid out in a 2018 paper declaring ‘The Metaverse is ours to lose’
[9] Enter the metaverse: the digital future Mark Zuckerberg is steering us toward