Mark Zuckerberg vows to spend billions more on the metaverse next year despite burning a whopping $4 billion on it this quarter
Facebook/Meta
- Meta said it might accelerate spending by 15% next year.
- Meta currently faces a number of headwinds, including a potential recession and a slowdown in the advertising market.
- The decision comes just days after a prominent tech investor wrote an open letter urging Mark Zuckerberg to curb spending.
Meta told investors it plans to ramp up spending next year, despite the fact that the company faces a slowdown in the advertising market and a potential economic recession.
The company's, so far, unprofitable pivot to the metaverse has been met with a growing chorus of opposition from analysts and at least one prominent investor in the company, yet Meta's third-quarter results show it's plowing ahead.
Meta's metaverse-focused Reality Labs division reported an operating loss of $3.7 billion and saw revenue fall 49% from the prior year to $285 million.
Meta forecasted that its expense guidance for 2023 would be between $96 billion to $101 billion, which is about 15% higher than what the company said it would spend in 2022.
Meta's decision to accelerate spending comes amid an advertising market slowdown. The company reported that its price-per-ad decreased by 18% since last year — and a potential recession.
Meta's increase in spending also goes against the wishes of at least one of its prominent investors.
Brad Gerstner, an investor at Altimeter Capital, wrote an open letter to the company earlier this week urging Mark Zuckerberg to cut the company's expenses.