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Facebook CEO Mark Zuckerberg. Photo by Bloomberg.
The Briefing
Facebook

Why Facebook Has to Make the Metaverse Investment

Photo: Facebook CEO Mark Zuckerberg. Photo by Bloomberg.

Facebook wants the world to know just how much money it is investing in the metaverse, the futuristic immersive world that CEO Mark Zuckerberg hopes will draw in a billion people at some point in the next few years. Superficially, the investment numbers are impressive—Facebook said today that its spending on the Reality Labs unit which is handling the metaverse effort will depress the company’s operating profit by $10 billion this year. Then again, that number is a little less impressive when you remember that Facebook spent $13.4 billion in the third quarter buying back its own stock!

In other words, Facebook has so much cash that if it didn’t make the metaverse investment, the question would be what it’s doing with its cash. Costs and expenses rose 32% so far this year but revenue has grown 46%. As a result, the company, even after the increase in costs and extra capex spending, generated $26 billion in cash in the first nine months. Next year could be a different story, true. The company has projected that costs will soar as high as $97 billion, up as much as 38% from 2021, as the metaverse investment continues to grow.

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