Are we seeing the fall of the first giant of the BigTech era live? To think that Meta, the old Facebook, could fall after being the company that has almost set up a model of making money in the digital ecosystem, and that along the way has been the demon of that same era with its scandals, sounds interesting to say the least. But giants, even with feet of clay, have trees even bigger than themselves to cling to.
Meta, yes, it has been a few months in which he does not stop giving reasons to speculate with his collapse. A little over a year ago, she presented her name change and her total commitment to the metaverse. An industrial change, a flight forward to see how competitors and the market itself -with Apple’s privacy policy changes at the forefront- that made their old oasis gradually dry up.
Since then, its shares have fallen 70%, it has recently announced the dismissal of 11,000 employees, 13% of the workforceand this week the rumor was also spreading, later denied by the company, that Mark Zuckerberg could leave his position as CEO.
Zuckerberg’s departure, still remote, would in any case mean a change of era. Zuck is the only CEO-founder of big tech still in office. And, furthermore, he does so with unusual power because he owns more than 58% of the shares with the right to vote in his own way with different formulas, and has provided himself with mechanisms in the decision-making bodies that make him untouchable.
Until now, Facebook had had a very clear manual for moments of crisis that was divided into two verbs: copy or buy.. Copy as you copied some approaches to the operation of Twitter back in 2014, and buy as you did with Instagram or WhatsApp.
WhatsApp is precisely the bet that Zuckerberg now seems to want to give more weight to prevent the disaster from continuing. After seeing how the metaverse is still a bottomless pit to swallow money, the green chat, with its more than 2,000 million barely monetized users, takes on another dimension.
But the underlying question is: Are we seeing the beginning of the twilight of the old Facebook for real or not?
WhatsApp, I choose you
The wide range of monetization options that Zuckerberg has built based on checkbooks is important, but it has a downside: they are all based on online advertising. That is why the metaverse —and the sale of spaces to brands within it, and hardware to users— and WhatsApp, with a possible subscription or much more essential payment methods, for example, for companies.
“We talk a lot about very long-term opportunities like the metaverse, but the reality is that business messaging will probably be the next big pillar of our business as we work to further monetize WhatsApp and Messenger”
Zuckerberg on the possibilities of WhatsApp
Meta’s crisis, however, comes not only because of its own conditioning factors. The current context of recession is inescapable and has had a strong impact on the entire tech sector.
Tech companies have laid off 33,000 workers since October, including big brands like Amazon, Microsoft, Coinbase, Twitter, Stripe, Salesforce and Meta itself. Likewise, there have been changes in management as a result of economic nervousness, among which the departure of Bob Chapek in favor of Bob Iger at Disney stands out.
That is why perhaps if there is a moment that lends itself to talking about the end of Zuckerberg it is this.
Meta’s head of communication, Andy Stone, came out to deny the rumour, his public response from Stone has now put the idea on the table for all to consider.
Due to the number of shares he owns, as we said, Zuckerberg cannot be expelled, he would have to resign. However, the idea of a Meta led by a different leader with a new strategic vision would likely drastically change the profile of the company.
What would change in Meta with a new CEO? And who would it be?
If a new leader were to take over Meta, the most obvious change, likely at the behest of the board of directors, would be to cut spending on all things metaverse. Zuckerberg has budgeted about $10 billion a year for the company’s Reality Labs unit, all to get ahead of what he sees as a fundamental change in the way users interact with the Internet.
If the VR unit were to survive the new direction, it would likely focus exclusively on its strong point: gaming. The Quest Pro, the heirs to the Oculus, priced at $1,500it could also be sacrificed in favor of a more affordable, although less powerful option.
Already into this what if businessWho would run Meta after Zuckerberg? Since its founder has held the reins of the company, it’s not entirely clear who might be best suited to succeed him.
Sheryl Sandberg has always been the woman behind Zuckerberg for the past several years as its chief of operations, but left her position in August. Would she come back? She knows the business and has long experience, and as we’ve seen Iger at Disney, the door is always open for safe values. Her appointment would also put a woman in charge of a large technology company for the first time, a milestone that would not hurt at all despite the fact that Sandberg also has her detractors.
Chris Cox is another of the great names in the history of Facebook. His head of product since 2005, Chris Cox left Meta in 2019 over what were said to be differences with Zuckerberg over the direction of the company. He returned in 2020 to return to serve in his previous role. If Zuckerberg were to go ahead, Cox could be seen by many as the most logical choice to succeed him.
The Winklevoss twins are a riskier option and almost a moral, but they have also sounded these days and that the actions that Meta have that these two old rockers from Silicon Valley now take over the company would almost have something of destiny written: Tyler and Cameron Winklevoss played important roles in the founding story of Facebook, and when Zuckerberg toyed with the idea of creating his own cryptocurrency, they held meetings again.
So is it the end of Zuckerberg?
As we have said, the rumor has come to the fore and has not been endorsed much, so it is not possible to give it more weight than the fact that it is the first time that the possibility is discussed. Which is not little.
Despite his lack of morals, Zuckerberg has proven for many years to be the leader a company needs to keep its shareholders happy., so it is not so easy to think about his fall. The current context, which itself is a context switch, is nonetheless dangerous.
Zuckerberg bets on the metaverse with a clear plan: trying to get ahead and capture from the name what, in his thinking, he believes will be the next great technological wave.
This concept of technological wave has its history. Coined by economist Joseph Schumpeter in 1942, the “creative destruction” theory suggests that business cycles work under long waves of innovation. Specifically, when markets are disrupted, key industry groups have huge effects and changes in the economy.
For example: the railway industry. In the early 19th century, railways completely changed urban demographics and commerce. Similarly, the Internet has disrupted entire industries, from the media to retail.
All this bet made us think that the path to Meta is clear. But that this critical moment is intersecting with a global crisis, perhaps it is something that not even the greatest of giants can overcome.