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The 2024 wildfire season has begun, and it's shaping up to follow last year's unprecedented destruction in kind, with thousands of square kilometres already consumed.
Newly renamed Meta is investing heavily in its futuristic "metaverse" project, but for now, relies on advertising revenue for nearly all its income. So when it posted sharply higher costs but gave a weak revenue forecast late Wednesday, investors got spooked -- and knocked almost US$200 billion off the valuation of the company formerly known as Facebook.
Meta's shares fell 22.9 per cent to $249.05 in after-hours trading. If the drop holds until the market opens Thursday, the company's overall value, known as its market capitalization, is on track to drop by a figure greater than the size of the entire Greek economy, based on data from the World Bank.
The metaverse is sort of the internet brought to life, or at least rendered in 3D. Meta CEO Mark Zuckerberg has described it as a "virtual environment" in which you can immerse yourself instead of just staring at a screen. Theoretically, the metaverse would be a place where people can meet, work and play using virtual reality headsets, augmented reality glasses, smartphone apps or other devices.
But building it is not likely to be cheap.
Meta invested more than $10 billion in its Reality Labs segment -- which includes its virtual reality headsets and augmented reality technology -- in 2021, contributing to the quarter's profit decline. It expanded its workforce by 23 per cent, ending the year with 71,970 employees, mostly in technical roles.
The company also said revenue in the current quarter is likely to come in below market expectations, due in part to growing competition from TikTok and other rival platforms vying for people's attention. Sheryl Sandberg, Meta's chief operating officer, said in a conference call with analysts that global supply chain issues, labour shortages and earlier-than-usual holiday spending by advertisers put pressure on the company's advertising sales.
Another problem: Recent privacy changes by Apple make it harder for companies like Meta to track people for advertising purposes, which also puts pressure on the company's revenue. For months now, Meta has been warning investors that its revenue can't continue to grow at the breakneck pace they are accustomed to.
"It is time for a reality check on Meta's position for the metaverse," said Raj Shah, an analyst at the digital consulting firm Publicis Sapient. "The metaverse is a long way from being profitable or filling the gap in ad revenue after Apple's policy change."
People's changing online behaviour is also limiting Meta's money-making abilities. More people are watching video, such as Instagram's Reels (a TikTok clone), and this makes less money than more established features.
The Menlo Park, California, based company said it earned $10.29 billion, or $3.67 per share, in the final three months of 2021. That's down 8 per cent from $11.22 billion, or $3.88 per share, in the same period a year earlier. Revenue rose to 20 per cent to $33.67 billion.
Analysts, on average, were expecting earnings of $3.85 per share on revenue of $33.36 billion, according to a poll by FactSet.
Meta Platforms Inc. took on its new name last fall to emphasize Zuckerberg's new focus on the metaverse. Since then, the company has been shifting resources and hiring engineers -- including from competitors like Apple and Google -- who can help realize his vision.
Zuckerberg is betting that the metaverse will be the next generation of the internet because he thinks it's going to be a big part of the digital economy. He expects people to start seeing Meta as a "metaverse company" in the coming years, rather than a social media company.
For now, though, the metaverse exists only as an amorphous idea envisioned -- and named -- by the science fiction author Neal Stephenson three decades ago. It's not yet clear if it'll be the next iteration of human-computer interaction the way Zuckerberg sees it, or just another playground for techies and gamers.
This could be spooking investors, who tend to prefer immediate, or at least quick, results on investments.
"There's a lot of uncertainty about Meta's investments in the metaverse and if or when they will have a positive impact on the company's bottom line," said Debra Aho Williamson, an analyst with Insider Intelligence.
"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," she added.
Meta said it expects revenue between $27 billion and $29 billion for the current quarter, below the $30.2 billion analysts are forecasting.
The 2024 wildfire season has begun, and it's shaping up to follow last year's unprecedented destruction in kind, with thousands of square kilometres already consumed.
Veteran TSN broadcaster Darren 'Dutch' Dutchyshen, one of Canada’s best-known sports journalists, has died. He was 57. His family says 'he passed as he was surrounded by his closest loved ones.'
A ‘lifetime of abuse’ led Dallas Ly to snap and repeatedly stab his mother inside their Leslieville apartment in 2022 but he never intended to kill her, his defence lawyers argued during at his murder trial in Toronto on Thursday.
A burgeoning track star says his dream of going to the Olympics is being derailed by a deportation order after Immigration officials rejected his family’s claim for asylum
A father has been charged with second-degree murder in the stabbing death of his 34-year-old daughter in southern Quebec.
A medical examiner says a Massachusetts teen who participated in a spicy tortilla chip challenge died from ingesting a substance 'with a high capsaicin concentration.'
A Montreal father who kidnapped his daughter who has autism and lied to police when they asked where she was should serve three years in prison, a Crown prosecutor said.
The province’s health minister and solicitor general are urging Toronto to rescind its request to decriminalize simple possession of small amounts of drugs for personal use, calling the proposal 'misguided' and 'disastrous.'
Prime Minister Justin Trudeau says he has "issues" with the Progressive Conservative government of New Brunswick.
A Starbucks fan — whose name is Winter — is visiting Canada on a purposeful journey that began with a random idea at one of the coffee chain's stores in Texas.
Members of Piapot First Nation, students from the University of Winnipeg and various other professionals are learning new techniques that will hopefully be used for ground searches of potential unmarked grave sites in the future.
ALS patient Mathew Brown said he’s hopeful for future ALS patients after news this week of research at Western University of a potential cure for ALS.
When Adam Kirschner wrote 'Slap Shot,' he never imagined the song would be embraced by his favourite team.
A team is ready to help an entangled North Atlantic right whale in the Gulf of St. Lawrence.
A $200 reward is being offered by a North Vancouver family for the safe return of their beloved chicken, Snowflake.
Two daughters and a mother were reunited online 40 years later thanks to a DNA kit and a Zoom connection despite living on three separate continents and speaking different languages.
Mother's Day can be a difficult occasion for those who have lost or are estranged from their mom.
YES Theatre Young Company opened its acclaimed kids’ show, One Small Step, at Sudbury Theatre Centre on Saturday.