Facebook is changing its name. From now on, the American Internet company will operate under the name “Meta”. The name change is part of a fundamental reorientation of the company.
Rumours of an imminent change to Facebook’s name have been circulating for some time. It’s now official: Facebook will become Meta. From now on, Facebook shares will trade under the ticker “MVRS”, which stands for Metaverse. According to Facebook founder Mark Zuckerberg, this is nothing less than the future of the internet.
A move not unlike Google’s transformation into Alphabet.
Mr Zuckerberg explains that the reason for the name change is that the Facebook name is “iconic” but no longer fully describes what the Facebook group stands for. In recent years, Facebook had acquired fast-growing social media platforms such as Instagram and WhatsApp. Although the Facebook network still represents the largest part of the company, with 3.5 billion users worldwide, it ultimately represents only one aspect of what Facebook is today.
As part of this name change, Facebook is also restructuring the company. From now on, the umbrella company Meta will be in charge. Facebook, Instagram and WhatsApp, meanwhile, will become subsidiaries of the company. This move is very reminiscent of the restructuring of the former Google Group, which was reorganised in 2015 into an umbrella company, Alphabet, and numerous subsidiaries – including Google.
Metavers as the future of the internet
At the same time, Mr Zuckerberg also wants to use the new name to draw attention to his vision of the future of the internet. The term ‘metaverse’ comes from the cyberpunk novel Snow Crash by Neal Stevenson. It’s a mixture of the internet and virtual reality. According to Mr Zuckerberg, this is exactly what the next stage of the internet should look like.
To be more precise, Facebook or Meta is striving to interweave aspects of virtual reality (VR) and augmented reality (AR) in the future. For example, virtual meetings could in future no longer take place on screens, but in the middle of a semi-virtual world in which each participant has the impression that everyone else is sitting at the table. However, the possibilities offered by the fusion of the internet and VR/AR go far beyond this.
The fact that Zuckerberg’s idea of the metaverse has been around for more than just a short time is proven by the 2014 acquisition of Oculus Rift, the developer of the virtual reality headset of the same name, which allows users to immerse themselves in virtual reality. The Oculus Rift, for example, allows users to experience 3D video games up close. In the future, a slimmer version that can be worn in everyday life could also allow the virtual elements of the internet to enter directly into the reality of its users.
Meta is prepared to put a lot of money into developing the Metaverse. The company recently announced that it would be creating 10,000 new jobs in Europe alone to cope with the development of this new virtual world.
The social media company faces criticism
This name change comes in the midst of a difficult period for Facebook. In recent months, criticism of the company’s business practices has intensified. In particular, Facebook’s management of its users’ data has been the bone of contention.
Consumer protection groups have long been critical of the fact that Facebook exploits its users’ private information on a massive scale and turns it into money. The Cambridge Analytica scandal showed that the company does not hesitate to sell sensitive information to interested parties who want to use it for political purposes.
Facebook’s existing business with Oculus Rift has also been affected by the company’s dubious handling of user data. In September 2020, Facebook had to stop selling Oculus Rift glasses in Germany until further notice. The reason for this was the compulsive linking of the glasses to their users’ respective Facebook accounts, as well as the transmission of all data to all other parts of the group. In doing so, however, Facebook may have breached the European General Data Protection Regulation.
Facebook shares react cautiously
On the stock market, the news of the group’s name change and reorganisation was greeted with some caution. The share price (ISIN: US30303M1027) is currently up by just under one percentage point. However, over the last five days, the stock has also lost 7.71% of its value.
Facebook’s name change to Meta is still largely cosmetic. It will probably be years before Zuckerberg’s Metaverse dream becomes a reality. In a recent interview with US tech portal The Verge, Zuckerberg revealed that the Metaverse certainly can’t be built by just one company in the future. That’s why, in the coming years, the emphasis should be on cooperation with other companies and developers.
If the Meta Group succeeds in realising its vision of the metaverse, the potential for action in this decade should be extraordinary. But that also presupposes that the antitrust authorities do not put obstacles in Meta’s way beforehand.
