Facebook Invests Billions In 'Metaverse' As Ad Revenues Plunge

Facebook Inc. said on Monday (Tuesday, Oct. 26, 2021, in Manila) it will start publishing the financial results of its augmented and virtual reality labs as a separate unit, where it is investing billions in its ambitions to build the "metaverse" and as it reported that its main advertising business faces "significant uncertainty."

Photo Insert: Facebook CEO Mark Zuckerberg

Facebook, which reported third-quarter profit up 17%, warned that Apple Inc.'s new privacy changes would weigh on its digital business in the current quarter.

The social media company reported quarterly revenue below market expectations, which Chief Operating Officer Sheryl Sandberg told analysts was due to the iOS changes, Elizabeth Culliford and Nivedita Balu reported for Reuters.

David Wehner, Facebook's chief financial officer, said the company expected its investment in its hardware division, Facebook Reality Labs, to reduce overall operating profit in 2021 by approximately $10 billion.

The financial commitment to this hardware-focused unit which will work on Facebook's "metaverse" ambitions, comes as the company is swamped by coverage of documents leaked by former Facebook employee and whistleblower Frances Haugen which she said showed the company chose profit over user safety.

CEO Mark Zuckerberg started Monday's analyst call by issuing a defense against criticisms stemming from the documents, which he said painted a "false picture of our company."

The CEO has said Facebook in the coming years will be seen not as a social media firm but as a company focused on the metaverse. The buzzy term refers broadly to a shared virtual environment that can be accessed by people using different devices.

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