Facebook is now Meta, but analysts note the company's real-world problems will follow it into the metaverse.
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Facebook Inc. is looking to its future as Meta Platforms Inc., but the rebrand will not carry much meaning until more details are known about the metaverse, and it also will not make the company's ongoing publicity problems go away, experts and analysts say.
Speaking at the Connect Conference showcasing the company's latest developments in virtual and augmented reality, CEO Mark Zuckerberg announced the new company name and its vision for the metaverse. The company will start trading under the ticker MVRS beginning Dec. 1 as a parent company for Facebook's suite of apps, including WhatsApp Inc. and Instagram, LLC as well as its virtual reality division, Facebook Technologies LLC.
The news comes as the company faces continued controversy amid revelations from a series of leaked documents titled "The Facebook Papers," which have highlighted Facebook's struggles in tackling misinformation, mental health, hate speech and user retainment, among other issues.
The launch of a new identity for the company is designed to be a distraction from other problems Facebook faces internally and in Congress, Rob Frankel, a branding expert, told S&P Global Market Intelligence.
 The logo of Facebook's new parent brand: Meta Platforms Inc. |
Meta or meh ...
Frankel compared the rebranding to legacy corporations Arthur Andersen and British Petroleum — now known as Accenture PLC and BP PLC — that continue carrying their damaged namesake with them.
"What you got from Zuckerberg today was a head fake," Frankel said. "They're under the subtext that Facebook has peaked, it's on its way out, and they need to switch it to something else to keep its share price up."
He cited reporting from "The Facebook Papers" about the platform's struggles in maintaining a younger user base, alongside its popularity among older users as arguments that the company's future is waning.
Into the metaverse
The rebrand is reminiscent of Google LLC's rebrand to Alphabet Inc. in the mid-2010s, but the name change is almost irrelevant at this point in time, CFRA Research analyst Angelo Zino said in an interview.
"How they invest money into that [metaverse] concept is what's really going to allow them to be successful or not," Zino said. Greater use of virtual and augmented reality across the broader tech space will aid in Facebook's vision, but the use of such technologies has not yet been fully normalized, the analyst added.
The name change is, at best, a strong way for the company to show the public where its ambitions lie, Third Bridge global sector lead for technology, media and telecommunications Scott Kessler said.
"Meta doesn't change much in terms of their orientation, structure or priorities," Kessler said.
Zuckerberg outlined the metaverse's vision during the Connect Conference, demonstrating how users will be able to shop, play games and interact with others in a fully virtual world. Contemporary screens "can't deliver that deep feeling of presence" the metaverse hopes to achieve, he said. The conference was also used to demonstrate how VR will play a role in bringing metaverse functionality to life.
Extended timeline
It is difficult to know what the metaverse will become when even Zuckerberg acknowledges that the service is at least five to 10 years away from becoming mainstream, said Seth Shafer, a research analyst with Kagan, a media research group within S&P Global Market Intelligence. Profitability is equally far off.
"The real challenge may lie more in actually building a compelling metaverse that billions of consumers want to engage with and not so much in maintaining reputational trust or integrity," Shafer added.
Zuckerberg, during the company's third-quarter earnings call, said it would take time before the metaverse becomes a significant profit driver. "Later in this decade is when we would sort of expect this to be more of a real business story." Facebook announced earlier this month that it will be hiring some 10,000 people in Europe over the next decade to help build metaverse infrastructure.
All told, anything good or bad can happen in the next decade, especially as Meta continues fighting regulatory and publicity hurdles. Frankel is not optimistic, pointing to its current internal struggles.
"By trying to make its problems less important, Zuckerberg can hopefully shift attention away from that and into Meta as a company," he said.