Doubting Zuck: Analysts Says Zuckerberg Doesn’t Believe Facebook Is ‘Actually a Business Anymore’

Financial analysts believe that Facebook (now known as Meta) CEO Mark Zuckerberg has changed the name of his company because “he doesn’t think his core business that he built 15 years ago is actually a business anymore.”

“I think Mark Zuckerberg is telling us he doesn’t think he has a core business,” Needham Senior Analyst Laura Martin told Yahoo Finance.

“He is moving to Reels because it competes with TikTok,” Martin added. “He is moving to the metaverse, and he’s changed the name of this company, which tells me he doesn’t think his core business that he built 15 years ago is actually a business anymore.”

While Facebook’s metaverse struggles with persistent bugs, a lack of users, and a general disinterest among its own employees, the Chinese-owned app TikTok is now the favorite social media platform among Generation Z, according to research conducted by Piper Sandler.

“The macro environment continues to deteriorate,” Martin said. “We think many ad-driven companies will miss their fourth-quarter earnings. And in Meta’s case, not only is just the macro environment deteriorating, but they’re losing a lot of user time to TikTok. And that continues to happen.”

AB Bernstein Senior Analyst Mark Shmulik touched upon Facebook’s performance in the stock market, stating, “I think the stock is back to questions around, really, core fundamentals.”

“Folks can understand that that’s [the metaverse] like a more long-term initiative,” Shmulik added. “I imagine investors would love it if they were spending a lot less on it.”

Facebook spent $10 billion in 2021 to build its metaverse, with Zuckerberg telling shareholders in 2022 that the company will continue spending heavily to build out the metaverse and will bleed money for three to five years, Yahoo Finance reports.

“If you take a look at the motivations behind it, we’ve gone through these changes in the past from desktop to mobile,” Shmulik noted. “SO they [Meta] understand that at some point, there’s going to be another computing platform change. They don’t want to be stuck in the application layer.”

But according to internal internal documents, Facebook’s “Horizon Worlds” metaverse, which allows users to interact in virtual worlds with an avatar, is falling far short of performance expectations. Data shows most users of the metaverse don’t return after the first month, and the userbase has been in continuous decline since the spring.

Moreover, a recent Coindesk article outlined the apparent slow downfall of Mark Zuckerberg’s digital metaverse concept. Despite widespread criticism of the metaverse from the tech world, the CEO remains completely obsessed with his virtual world.

You can follow Alana Mastrangelo on Facebook and Twitter at @ARmastrangelo, and on Instagram.