A year after its rebrand, Meta forges new bonds to shift its VR strategy beyond the social advertising era

By Marty Swant

When Microsoft surprised the tech world during the 1997 Macworld expo by partnering with the then-flailing Apple, it spurred the start of a major turnaround. Now, 25 years later, Microsoft is a key part of Meta’s big metaverse bet as the struggling social network looks to find enterprise clients to replace slowing revenue growth from advertising.

On Tuesday, Microsoft CEO Satya Nadella joined Meta CEO Mark Zuckerberg on stage for part of the annual Meta Connect conference, where Meta unveiled its pricey new virtual reality headset — the $1,500 Quest Pro — and debuted other product announcements geared toward AR/VR and the metaverse.

Meta’s metaverse bet

Since acquiring Oculus in 2014 for $2 billion, Facebook has increasingly touted its vision for VR as a new social network, but also as a way to play games, exercise and watch a range of other content. However, Nadella’s guest appearance — in addition to other newly announced partnerships with enterprise giants such as Accenture, Adobe and Autodesk — are all interpreted as signals for how Meta hopes to reinvent itself to rely on more than social advertising.

Microsoft plans to make Microsoft Teams and Windows 365 available in Meta headsets and also provide cloud support from Microsoft Intune and Azure. Autodesk is adding ways for architects and designers to review 3D models. Adobe is working on tools for creators to design in 3D and also has plans for Adobe Acrobat users to collaborate on PDFs. Accenture is developing new techniques to help engage with customers and employees in VR.

“[Meta’s] partnership with Microsoft was particularly notable because it signaled a tangible step towards an interoperable metaverse,” said Gartner analyst Mike Proulx. “This can only happen by more companies openly working together. But make no mistake, Meta has baggage to shed and it’ll take lots more actions like this to earn some of their lost trust back.”

It’s now been nearly a year since the company formerly known as Facebook rebranded to become Meta. Last October, the change was seen as not just a nod to its new focus on the metaverse, but also as an attempt to redirect attention away from ongoing concerns about data privacy and content moderation. Since then, the company’s stock price has been cut in half while advertising revenue has eroded from a combination of Apple’s privacy changes and ongoing economic uncertainty. Earlier this year, the company said Apple’s privacy changes could cost it $10 billion in 2022. (That’s the same amount it lost last year from metaverse-related spending.)

Can Meta grow revenue from its VR ambitions fast enough to offset the slowing ad revenue from Facebook and Instagram? That’s the “billion-dollar question,” according to Anshel Sag, an analyst at Moor Insights & Strategy, who also pointed out that Meta is trying to get ahead of whatever headset Apple could soon announce.

“Meta’s increased investments in VR, AR and the metaverse come at the worst time for the company financially,” Sag said. “But I believe that the company knows that it may take some …read more

Source:: Digiday