From CNET: Facebook parent Meta said Wednesday that the augmented and virtual reality business at the heart of its metaverse ambitions generated $877 million in revenue, but disappointing fourth-quarter earnings underscored how much the company relies on its social media businesses.
The details mark the first time the company has broken out the performance of its AR and VR unit, which is known as Reality Labs. The unprofitable unit -- it lost $3.3 billion in the quarter -- oversees the Oculus headset that will help anchor the company's push into the metaverse.
Last year, Facebook rebranded itself as Meta, a change that fueled hype around the online spaces where people will be able to work and socialize as digital avatars. However, Meta remains reliant on digital advertising on the Facebook social network and its photo service Instagram even as it barrels toward the metaverse.
"While we expect Meta to ramp up testing ads and commerce within its metaverse offerings this year, those efforts will be highly experimental and not likely to drive much revenue in the near term," said Debra Aho Williamson, a principal analyst at Insider Intelligence, which was formerly eMarketer.
In the fourth quarter, Meta posted revenue of $33.7 billion, above analyst expectations of $33.4 billion. But it earned $3.67 per share, falling short of the $3.84 per share projected by analysts surveyed by Thomson Reuters. The company also reported a slide in daily active users, suggesting it may be reaching saturation.
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