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Zuckerberg says WhatsApp business chat will drive sales sooner than metaverse

Meta Platforms Inc Chief Executive Mark Zuckerberg told employees on Thursday that WhatsApp and Messenger would drive the company’s next wave of sales growth, as he sought to assuage concerns about Meta’s finances after its first mass layoffs.

November 18, 2022
By Paresh Dave and Katie Paul
18 November 2022

By Paresh Dave and Katie Paul

Nov 17 (Reuters) – Meta Platforms Inc Chief
Executive Mark Zuckerberg told employees on Thursday that
WhatsApp and Messenger would drive the company’s next wave of
sales growth, as he sought to assuage concerns about Meta’s
finances after its first mass layoffs.

Zuckerberg, addressing pointed questions at a company-wide
meeting a week after Meta said it would lay off 11,000 workers,
described the pair of messaging apps as being “very early in
monetizing” compared to its advertising juggernauts Facebook and
Instagram, according to remarks heard by Reuters.

“We talk a lot about the very long-term opportunities like
the metaverse, but the reality is that business messaging is
probably going to be the next major pillar of our business as we
work to monetize WhatsApp and Messenger more,” he said.

Meta enables some consumers to speak and transact with
merchants through the chat apps, including a new feature
announced Thursday in Brazil.

The company did not immediately respond to a request for
comment on Thursday’s internal forum.

Zuckerberg’s comments there reflect a shift in tone and
emphasis after focusing heavily on extended reality hardware and
software investments since announcing a long-term ambition to
build out an immersive metaverse last year.

Investors have questioned the wisdom of that decision as
Meta’s core advertising business has struggled this year, more
than halving its stock price.

In his remarks to employees, Zuckerberg played down how much
the company was spending in Reality Labs, the unit responsible
for its metaverse investments.

People were Meta’s biggest expense, followed by capital
expenditure, the vast majority of which went to infrastructure
to support its suite of social media apps, he said. About 20% of
Meta’s budget was going to Reality Labs.

Within Reality Labs, the unit was spending over half of its
budget on augmented reality (AR), with smart glasses products
continuing to emerge “over the next few years” and some “truly
great” AR glasses later in the decade, Zuckerberg said.

“This is in some ways is the most challenging work … but I
also think it’s the most valuable potential part of the work
over time,” he said.

About 40% of Reality Labs’ budget went toward virtual
reality, while about 10% was spent on futuristic social
platforms such as the virtual world it calls Horizon.

Chief Technology Officer Andrew Bosworth, who runs Reality
Labs, said AR glasses need to be more useful than mobile phones
to appeal to potential customers and meet a higher bar for
attractiveness.

Bosworth said he was wary of developing “industrial
applications” for the devices, describing that as “niche,” and
wanted to stay focused on building for a broad audience.
(Reporting by Katie Paul and Paresh Dave; Editing by Peter
Henderson and Kenneth Maxwell)

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