September 30, 2022

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No technology company has ever invested so much in a project

Mark Zuckerberg is excited about metawares. On Yesterday’s Facebook Link Conference He was like a child with a new toy. A toy, by the way, is very expensive. If it is a frog, it will add headaches to a company that has suffered from chronic migraines for many years. And it Newborn meta Is investing heavily in the development of this digital universe, The cost of representing a technology company’s risky race in a single project to date.

Facebook As stated in your 2020 financial results That Has invested $ 18.5 billion in research and development (R&D). That year, Facebook made up the bulk of them for its virtual reality (VR) and augmented reality (AR) segment, known as reality labs.

Not all of these global figures are striking. Large technology companies are accustomed to investing heavily in R&D for endless projects. Without further ado, By 2020, Amazon will have set aside nearly $ 43,000 million for this In research related to artificial intelligence, The Mechanical learning And artificial vision, for the same purpose Alphabet spent about $ 27,500 million, mainly according to artificial intelligence and new software and devices Nasdaq Info.

It is worth noting that this is a percentage that reflects the cost, compared to the income of these companies. According to Amazon, which paid the most money on R&D in 2020, the item accounted for only 11% of its net sales, while in Alphabet, which ranked second on the list in terms of costs, that percentage was slightly higher at 15%. In your income. For Facebook, the fifth largest investor in research and development by 2020, The percentage was already 21% of its turnover that year.

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If you look at the percentage of revenue that large tech companies allocate to R&D, Facebook already tops the list in 2020, ahead of Amazon, Google, Huawei (14%) or Microsoft (13%). Now comes the curves. In presenting the results for the third quarter of 2021Zuckerberg has promised to cut their operating profits by about $ 10 billion this year as investment in Facebook Realty Labs increases. Meta’s research and development investment will reach $ 28.5 billion In 2021.

That amount will be based on Facebook’s annual balance sheet for 2020 It invests about 30% of its income in R&D, Especially in its metaverse program by Facebook Reality Labs. However, if the quarterly turnover figures provided by Zuckerberg’s company throughout 2021 are maintained over the last three months of the year, that percentage will actually be 25% from this year. They earn more than ever before.

More investment in a single project

Facebook is finally allocating 25% or 30% of its revenue to R&D this year, the truth is that any of these percentages Very bulky Especially when we take into account that a good portion of that money will only be used for the development of metawares compared to what other big tech companies invest in.

Technology companies are accustomed to spending large sums of money researching new products and services, often losing money, but they rarely lay multiple eggs in one basket. They all greatly diversify their projects, however they fall into the same field as artificial intelligence. Zuckerberg, on the other hand He plays almost everything on the same card While it looks like a slip, it is still on the face of the tech board.

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Market valuations, of course, call for confidence: According to Bloomberg, This new internet frontier business It could move $ 800,000 million a year by 2024. But that is all, the predictions may go unfulfilled.

Zuckerberg, however There seems to be blind faith in those estimates And in internal market research, Facebook should have done more about the economic potential of metawares.

Money to burn?

According to 2020 data, that confidence is, of course, very easy to have with nearly $ 30 billion in benefits behind your back. There is money to burn on FacebookIf the race does not go as they expected, they have the ability to maneuver their ships and take them to other good waters.

At least if everything continues as before, it is not clear. Facebook is growing a lot, a lot in 2021 according to what its quarterly results show, but its fall season has turned very dark Internal document leak According to the Wall Street Journal, social networking has a very low response to news about human trafficking, organ trafficking, pornography, drugs, violence and hate.

The Facebook files They represent a very serious reputation crisis for Facebook, which could lead to the loss of advertisers and translate into significant financial penalties Judicial review Retrieved by Cambridge Analytica case. If all of this affects the company’s basement, and so many risks go wrong in the metawares, a Severe economic blows To the technology company.

Facebook, or rather Meta, is at a crucial moment in its history. Occupied by slander, she embarks on a precious adventure of discovering a new world. For now, let’s see if its treasuries can support the company and, above all, maintain it if profits fall. If metawares did not turn out to be the pottery Zuckerberg predicted.

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