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Meta Shares New Insights into the Coming Metaverse Shift, and What Exactly Needs to Happen to Facilitate it

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What are the true opportunities of the metaverse and more immersive digital environments, and more specifically for marketers, how will it change the way people shop, engage with brands, and advertising approaches?

That’s the focus of a new whitepaper from Analysis Group, in partnership with Meta, which seeks to provide a realistic perspective on where things are headed with the metaverse shift – which may or may not become a tangible, valuable reality for another decade yet.

But it is, according to Meta at least, coming, and that will open up new opportunities.

First off, the whitepaper seeks to define what, exactly, the metaverse is – an important element considering the amount of profiteering businesses that have cropped up with their ‘metaverse ready’ solutions.

As per the paper:

One way to think about the metaverse is as a set of interconnected digital spaces, including immersive XR experiences that combine the digital and physical words, in which individuals can easily move between different spaces and experiences as well as interact and collaborate with other people who are not in the same physical space.”

I mean, that seems pretty straightforward, and in line with the broader definition of the metaverse experience, as we’ve been shown in various promotional mock-ups from Zuck and Co.

But the practicalities of that are also important – how will we actually get there, and crucially, how far off is the next stage of connection?

The answer on that front is that it will take time – and Analysis Group is careful to note that it might never happen:

“It is possible that, like many other previously “hyped” technological innovations, the metaverse never comes to fruition as it is currently envisioned.”

But in order to become the platform of the future, it will need mass adoption, which means broader take-up of VR headsets, the roll out of AR glasses, and other technologies.

“As with the Internet and other technologies, the form and shape of the metaverse will materialize slowly at first, and only after a critical mass of adoption is achieved, will its full potential begin to take more concrete shape.”

So it’s not here yet, and it’s not coming for some time. So you don’t need to go ‘all in’ on your metaverse strategy, and you shouldn’t feel obligated to jump on the NFT train at present.

It will take time, meaning you have time, which, as Meta’s Nick Clegg additionally notes, also means that regulators have time and space to institute new rules and frameworks for the evolving space.

As has been the case throughout the internet’s development, interoperable standards and protocols will be developed by different people and companies over time, and will often be settled by institutions like the US-based National Institute of Standards and Technology or international multi-stakeholder organizations like the Internet Engineering Task Force or the World Wide Web Consortium.

In his essay, Clegg builds on the Analysis Group whitepaper with a call for governments to work together on building a regulatory approach for the evolving space.

A metaverse that is open and interconnected is not only the right thing for users — and something that will involve both technical and policy work from industry and regulators — it is also the sort of thing that might come to distinguish the metaverse in the parts of the world that still believe in an open internet from the metaverses built in other parts of the world where a closed internet has been constructed in recent years.

Clegg notes that a ‘constellation of technologies, platforms, and products’ will be required to work together to build the metaverse space, and that will likely need some level of external oversight – because while Meta would love to own the metaverse for itself, it also knows from experience that it doesn’t want to be the one setting the rules in the new space.

Acting now, Clegg says, is key to ensure that we’re prepared for the next shift. Because again, as detailed in the AG report, we’re still developing the building blocks of the next phase.

“The way mobile technology combined existing technologies such as phones, the Internet, cameras, and mp3 players and evolved to change how we use the Internet is reminiscent of the path the metaverse appears poised to follow. Combining existing technologies such as phones, the Internet, cameras, and mp3 players into a single mobile device fundamentally altered how we connect with the Internet by overcoming limitations of geography. Existing conceptions of the metaverse have a similar flavor of combining existing technologies, such as AR/VR, videoconferencing, multi-player gaming, and digital currency, and turning them into something new.”

This is important to note, because while people are jumping on board new trends like NFTs, with a view to the future, the fact is that we don’t know what role these kinds of elements will play in the coming metaverse shift.

It’s also hard to take anything definitive from the AG report on potential value – because as it notes, it’s not in a position to speculate whether the metaverse will succeed, it’s merely mapping out its potential based on past technological advances. But with this comparison in mind, if the metaverse were to grow in the same way as mobile technology developed, it could become a $3.01 trillion industry by 2031.

Metaverse potential

There’s a lot to factor in here, and a lot that needs to go right. For example, the AG report notes that various platforms will need to work together to make the metaverse work.

“For example, a user is required to have an individual account to access a social media app such as Twitter or TikTok and an individual account to access a gaming console such as Xbox or PlayStation. But in the metaverse a user would be empowered to consume digital goods and services seamlessly. Time Magazine’s Andrew Chow supports this vision and writes, “Instead of having separate Facebook and Twitter accounts in which everything you post is owned by those corporations, you will be able to own your digital personhood and all of your ideas and digital belongings wherever you go.” For example, an individual could purchase a digital piece of clothing or accessory from a platform and still “wear” it when they visit another platform, as opposed to that digital good being restricted for usage within the platform from which the individual initially purchased it.”

That’s would be an amazing advance, and it is possible, but Meta’s essentially calling on regulators to establish new rules and systems now to ease this into existence. Because the platforms themselves will have little motivation to integrate in this way, unless they either have to, or the financial benefits of doing so are too much to ignore.

Meta seems to be angling its push towards the former, establishing new rules, governing all metaverse partners, in order to avoid any commercial conflicts or rule-setting by certain platforms. Meta has been highly critical of Apple’s restrictions on iOS apps, which is a similar problem it’s pointing to here – if regulations are not built into the framework of the metaverse right now, it will become increasingly difficult to enforce any rules once any system, and its accepted norms, is in place.

So essentially, the metaverse is still a long way off, and a lot needs to happen to make it the universal, interoperable, virtual reality alternative that Meta envisions.

In other words, don’t get too far ahead of yourself on the metaverse just yet, and don’t throw your money away on the latest trends. Assess each as it arrives, consider its fit for your business. But don’t believe anyone who tries to sell you on the metaverse being already here, and already ready to go for brands.

You can read the full Analysis Group whitepaper here, and Nick Clegg’s long Medium essay on the metaverse shift here.

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Meta Soars by Most in Decade, Adding $100 Billion in Value

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Meta Soars by Most in Decade, Adding $100 Billion in Value

Correction: February 2, 2023 This article has been revised to reflect the following correction: An earlier version of this article misstated how much Meta expected to spend on its deal with the virtual reality start-up Within. It is $400 million, not $400 billion. Meta’s stock surged on Thursday …

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Twitter’s Cancelling Free Access to its API, Which Will Shut Down Hundreds of Apps

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Twitter’s Cancelling Free Access to its API, Which Will Shut Down Hundreds of Apps

Well, this is certainly problematic.

Twitter has announced that, as of February 9th, it’s cutting off free access to its API, which is the access point that many, many apps, bot accounts, and other tools use to function.

That means that a heap of Twitter analytics apps, management tools, schedulers, automated updates – a range of key info and insight options will soon cease to function. Which seems like the sort of thing that, if you were Twitter, you’d want to keep on your app.

But that’s not really how Twitter 2.0 is looking to operate – in a bid to rake in as much revenue as absolutely possible, in any way that it can, Twitter will now look to charge all of these apps and tools. But most, I’d hazard a guess, will simply cease to function.

The bigger business apps already pay for full API access – your Hootsuite’s and your Sprout Social’s – so they’ll likely be unaffected. But it could stop them from offering free plans, which would have a big impact on their business models.

The announcement follows Twitter’s recent API change which cut off a heap of Twitter posting tools, in order, seemingly, to stop users accessing the platform through a third-party UI. 

Now, even more Twitter tools will go extinct, a broad spread of apps and functions that contribute to the real-time ecosystem that Twitter has become. Their loss, if that’s what happens, will have big impacts on overall Twitter activity.

On the other hand, some will see this as another element in Twitter’s crackdown on bots, which Twitter chief Elon Musk has made a personal mission to eradicate. Musk has taken some drastic measures to kill off bots, some of which are having an impact, but Musk himself has also admitted that such efforts are reducing overall platform engagement

This, too, could be a killer in this respect

It’ll also open the door to Twitter competitors, as many automated update apps will switch to other platforms. This relates to things like updates on downtime from video games, weather apps, and more. There are also tools like GIF generators and auto responders – there’s a range of tools that could now look for a new home on Mastodon, or some other Twitter replicant. 

In this respect, it seems like a flawed move, which is also largely ignorant of how the developer community has facilitated Twitter’s growth. 

But Elon and Co. are going to do things their own way, whether outside commentators agree or not – and maybe this is actually a path to gaining new Twitter data customers, and boosting the company’s income. 

But I doubt it.

If there are any third-party Twitter apps that you use, it’ll be worth checking in to see if they’re impacted before next week.



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Meta ‘Year of Efficiency’ call from Zuckerberg was what Street needed

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Meta 'Year of Efficiency' call from Zuckerberg was what Street needed

Mark Zuckerberg, chief executive officer of Meta Platforms Inc., center, departs from federal court in San Jose, Calif., on Dec. 20, 2022.

David Paul Morris | Bloomberg | Getty Images

With one simple slogan, Meta CEO Mark Zuckerberg temporarily quelled investor discontent with his company’s multibillion-dollar investment into the futuristic metaverse.

“Our management theme for 2023 is the ‘Year of Efficiency’ and we’re focused on becoming a stronger and more nimble organization,” Zuckerberg said as part of the release of Meta’s fourth-quarter earnings report.

Following a 64% plunge in Meta’s share price in 2022, Wall Street cheered the report, sending the stock up almost 20%, extending a rally that began late last year. Based on after-hours pricing, Meta is trading at its highest since July.

Growth is not what’s getting investors excited. Meta reported better-than-expected revenue in the fourth quarter, but sales still sank 4% from a year earlier, marking the third straight quarterly decline. And the forecast range for the first quarter suggests that year-over-year revenue could increase, but it could also fall again.

Rather, Zuckerberg’s commitment to cost cuts and efficiency is a sign that increasing profitability is important to Meta, which was known as a growth machine prior to last year’s slump.

“The first 18 years I think we grew it 20%, 30% compound or a lot more every year,” Zuckerberg said on the earnings call. “And then obviously that changed very dramatically in 2022, where our revenue was negative for growth, for the first time in the company’s history.”

In looking to the future, Zuckerberg struck a realistic tone.

“We don’t anticipate that that’s going to continue,” he said, regarding the recent drop in revenue. “But I also don’t think it’s going to go back to the way it was before.”

Meta lowered its estimates for total expenses in 2023 to be in the range of $89 billion to $95 billion, down from its prior outlook of $94 billion to $100 billion. In November, the company announced it would lay off over 11,000 workers, or 13% of its staff.

Zuckerberg said Meta will be more “proactive on cutting projects that aren’t performing or may no longer be crucial” and that it will emphasize “removing layers of middle management to make decisions faster.”

Meta is also reducing spending as it builds new data centers that are intended to be more efficient while still able to power the company’s various artificial intelligence technologies. Capital expenditures are now expected to be in the range of $30 billion to $33 billion for 2023 instead of $34 billion to $37 billion.

Zuckerberg is selling investors on a story they want to hear, acknowledging that the company got bloated and needed more financial discipline. One of Zuckerberg’s top deputies, technology chief Andrew “Boz” Bosworth, wrote a personal essay just a few days ago echoing that sentiment.

Still, Meta has plenty of challenges ahead, in terms of both costs and reviving its core ad business.

Meta’s Reality Labs unit, which is responsible for developing the nascent metaverse, lost $13.7 billion in 2022. Finance chief Susan Li told analysts that the company isn’t planning for any reduction in that unit anytime soon. Zuckerberg still sees it as the company’s future.

Digital advertising, meanwhile, is suffering from a struggling economy, and Li gave no indication that companies are planning to dramatically increase their spending in 2023.

Meta has also yet to recover from Apple’s 2021 iOS privacy update that made it harder to target users with ads. Li said the company has been improving its online advertising system, but Apple’s update is “still certainly an absolute headwind to our revenue number.”

During the question and answer part of the call, Zuckerberg was asked about Meta’s progress in generative artificial intelligence, which has become the latest hot thing in Silicon Valley. His answer indicated that Meta is pursuing opportunities there, but will be cautious in how quickly it proceeds. Running these programs is expensive, and Meta needs to ensure it can develop them affordably, he said.

Zuckerberg said that while Meta is researching how best to incorporate the new technology, he wants “to be careful not to get too ahead of the development of it.”

Correction: Meta’s earnings report and CEO Mark Zuckerberg’s comments occurred after the market close on Wednesday. An earlier version misstated the day.

WATCH: Meta grows in daily active users, shares pop on revenue beat

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