A lot of people blame Meta's VR attempt, but I don't think that's the problem.
The problem in my opinion is that we have reached peak advertising. Advertising is ultimately a doomed business model as it works against your users' interests, yet requires those users to willingly use the product and engage with the ads.
Over time, users learn to ignore it (see "banner blindness") so a short-term response is just to include more ads to compensate, but there's only so much space before the entire product becomes saturated with ads and users leave completely because the inconvenience of advertising became greater than the value the product provides. Regulators are also wisening up to it with stronger privacy protections (that threaten non-consensual ad-targeting) all around the world.
Advertising is a time bomb and an unsustainable business model. It provides short-term revenue (and a lot of it if you play your cards right, as Meta's stock price until now reflects) but will never be sustainable in the long run. Advertising is a parasite and its host will always try to get rid of it - a pretty terrible business model when you can instead align the incentives by charging your users money and provide them a valuable service in exchange.
Is there value in Facebook's products (whether current, or future VR-based ones)? Yes. Is there enough value to justify a overinflated stock price that only got there due to a combination of monopoly position as well as temporary gap in regulation against spyware? Doubt it, and so does the market.
If that were true, we'd see other companies that rely on advertising to drop similar, or at least drop as well. Google, ClearChannel, IPG, and even Amazon. But those aren't collapsing.
What you say is probably one reason, though. But the actual crash is more likely because Meta didn't innovate and move away from-, or diversify their advertising-model over time. So rather than a steady change through continued innovation, A&M etc, they are now forced to bet on a giant pivot. For one, this makes investors nervous.
Meta has performed several M&As though, some of which proven extremely profitable and successful. But while e.g. Instagrams' userbase is different from FB, their income is based on almost the exact same model of targeted advertising. FB failed to move into ecommerce, video, streaming, etc. and diversify their income significant. Something that Amazon or Google do much better.
Noise vs signal ration. Despite all those nasty infliction of ads, Google still provide very important services. Ditto for Amazon. Amazon does show ads but it is aligned with their business model. I mean I am browsing for products and I get ads for products.
The same isn't true for Facebook. I've stopped using this 7 years ago and I didn't even miss it for one day. One day my wife was scrolling through FB feed and all I can see is ads after ads after promoted pages. She scrolled for like 5 minutes, encountered may be 2 posts from her acquaintance circle and then she closed the app. The boredom while browsing FB feed was visible in her eyes.
FB simply doesn't offer any value these days. Almost everyone I know has gradually stopped using FB. This is an app with very low signal to noise ratio.
I think it's a bit like the recent abandoned UK budget. Lots of countries, under current conditions, will show budget deficits this year, without really being punished by the markets. And the bulk of the UK deficit under the proposed budget would have been that sort of thing. But the difference with the UK was that a portion of the budget was just _gratuitously throwing money away for no reason_ (particularly the top-rate tax cut), and the markets punished them for that.
This is similar; everyone dependent on advertising is struggling to an extent, but most of them aren't currently setting fire to vast piles of cash in service of an idiosyncratic project which most people don't have much hope for.
FB/Instagram became boring for a very long time. Their recent pivot to "discovery" is a move in the right direction, but they are still ways off from staging a return. And all this is overshadowed by the Metaverse.
They've invested so much reputation wise (changing their name even) that it's very hard for them to back down, maybe impossible considering who makes that call.
> Advertising is ultimately a doomed business model as it works against your users' interests, yet requires those users to willingly use the product and engage with the ads.
Sort of, but not quite. We had already kind of reached peak advertising, this isn't recent. More specifically the following trends:
- Advertising has been and is expected to continue to grow at a measly 5% per year on average[0] (compare that to say like 10% on Software)
- Digital advertising's cannibalization (e.g. the pie shifts) of traditional media is slowing down and hitting diminishing returns
- We're hitting peak media use at 12 hours 9 minutes per day[1]. There's just physically not enough hours in the day to consume more media.
- There are more players trying to capture that consumption. Facebook's properties's use are diminishing compared to competitors (e.g. basically TikTok).
TL;DR - Pie only grows 5% per year, digital is getting close to eating a majority of the pie, and people that aren't Facebook are eating that pie and Facebook can't compete.
It's interesting to note that mass advertising has gone through several stages, and a number of previously highly-active platforms are now pale shadows of their previous selves. Some of this is a matter of shifting technology and related advances, but there also seems to be a pattern of burning through audiences through frustration.
Arguably, advertising initiated in bulk print (newspapers and magazines), see Benjamin Day's The Sun (1833). I've mentioned Hamilton Holt's Commercialism and Journalism (1909) many times, it's an excellent summary of early advertising-based publishing, and its many problems: <https://archive.org/details/commercialismjou00holtuoft>.
Radio stole the thunder from print as a more passive and accessible medium, television from radio. Targeted cable offerings sniped over-the-air broadcast. And now online advertising is dominating both print and broadcast. I'd argue that billboard advertising has shown similar patterns as well, expanding rapidly with highway construction, seeing a strong backlash (beginning in the 1960s, notably by Lady Bird Johnson: <https://www.sandiegoreader.com/news/2001/jun/21/what-happene...>), and over the past several decades, trending strongly to very low-value advertisers ("gentlemen's clubs", lottery and casino ads, the classic anti-goods of alcohol and tobacco, as well as the increasingly ubiquitous "your message here" placeholders, being strong indicators of this, particularly outside high-wealth metro regions).
I don't recall who made the observation, but in the content industry, it's interesting that music, film, and books are exceptions to the advertising-supported nature (mostly, there are a few exceptions, mostly minor, though the expanding length of trailer and pre-film advertising in theatres would also be an exception ... this may have been mentioned in an Ezra Klein episode).
And speaking of Klein: that podcast includes advertising. I find myself averse to listening when I know I'm going to have to hear those (e.g., I can't intervene to skip the ads, such as when I'm doing household tasks), and will avoid listening to it. There are a number of other podcasts which are similar, a surprisingly large number being of what are nominally public-radio programmes --- Freakonomics comes to mind. Combined with IMO lackluster quality, I'm actively avoiding many of these, and have unsubscribed to several. Independent and academic podcasts are more my style, History of Philosophy by Peter Adamson and Complexity from the Santa Fe Institute being among the best.
And more recently, the vast expansion of direct marketing over p2p networks, most notably landline and mobile telephony, is making the experience of subscribing to those services increasingly undesirable. Much in the same way as spam and simply information overload seems to be making open-standards, universal-access email much less widely used (many organisations no longer publish email addresses, or respond to emails where such addresses can be found), an overall frustration level can in fact kill general use of a medium or channel.
John Gottman's five-to-one ratio of positive to negative experiences, originating in relationships but apparently having broader applications, may well play a role here. If even a relatively small minority of experiences over time with a technology, medium, or channel are negative, that impression tends to strongly discourage long-term favourability. See: <https://www.gottman.com/blog/the-magic-relationship-ratio-ac...> (for the relationship side, the ad/media extension is my own suggestion, though I suspect others have argued similarly).
As Nextgrid's comment notes, the real problem with advertising is that it's a race-to-the-bottom market, especially where high-value / highly-attractive audiences flee. Higher-quality advertisers similarly depart, and both the products marketed and methods utilised tend to ever-increasing toxicity in both figurative and literal senses. As I mentioned a couple of months ago, advertising ultimately has a reverse-Midas touch: it turns gold to shit: <https://news.ycombinator.com/item?id=32669503>
Part of the constant-platform-migration trend seems to be explained by highly-valued audiences tending to be early adopters of such platforms. Early advertising returns are high, and for all parties (publishers, advertisers, and audiences) the initial experience tends to be positive. With both wider adoption and early-adopter defections (leaving the media/platform), that kicks off the death-spiral dynamic.
I have a different hypothesis (I know it's a controversial one).
Ad based business models have a redistributive effect. Services like Facebook are paid for in proportion to spending power whilst usage has a completely different distribution. So wealthier users are effectively subsidising less wealthy users, which enables broad network effects and economies of scale.
People will always pay to influence other people. I think advertising while being annoying is one of the less malign forms of doing that. It also has privacy preserving characteristics as there is nothing more destructive for privacy than making a payment. That doesn't mean we shouldn't regulate to limit ad targeting. I think we should.
The game theory of firms choosing to advertise seems to be prisoner's dilemma like. The only equilibrium is for both firms to advertise at a loss. If either firm stops advertising, the other firm's ads become more effective and it will steal market share.
As a consequence of this, I think advertising will always persist irrationally unless the system if changed to prevent this irrational behavior. A really high tax on any ad spend would probably work.
Tax on advertising is a very interesting idea. Everyone understands that is a necessary evil and most parties would rather not do it given the chance. But how do you classify what advertising is? Buying adspace on a website or billboard might be obvious? What about other forms like content creation, influencer marketing etc. If you create some websites or videos related to your services, is that considered advertising?
Among the sea-changes in the publishing industry was the abolition of exceptionally high taxation rates on advertising in the UK in the early 19th century (circa 1830 or so).
I've only read peripherally about this and don't have any good sources handy, but it's a historical fact which strikes me as quite interesting.
That's not what "at a loss" means and is also not irrational.
High tax on ad spend would be a throwback to our Christian moralist days where we decide that some spending is good spending that we like and other is bad spending. Most attempts to ban payment for boosting speech have failed, see citizens united.
I think you're conflating "infinite growth" with "unsustainable."
Advertising can be a sustainable business model. Radio, television, billboards, etc. sustain themselves through advertising. We can quibble about their growth rates, but if advertising were unsustainable, then these industries wouldn't exist in their current form.
I think you're actually rejecting the idea that a company can sustain infinite growth through advertising. I think that's a little different from being wholly "unsustainable."
It's interesting though that both radio and TV switched to pay models: cable/premium channels and Sirius/XM for radio. Billboards are providing anything to the user, they're just giant signs that say "go buy this"
I think there's some confusion here. By "advertising" GP is referring to the business model where you offer a product to users, but your revenue comes from advertisers targeting those users.
IIUC they are not claiming that basic practice of advertising goods and services you provide is doomed.
Mass-market advertising in the modern sense dates to about 1860, or about 160 years. That's over a century, but not "centuries". As a significant social and economic dynamic, it's younger yet.
As I've recently posted to this thread, Hamilton Holt's 1909 account is an excellent introduction to the beginning of this period:
Google's Ngram Viewer suggest that the terms "advertising agency" and "advertising copywriter" only came into vogue during the 1920s, which would be only just at the century mark:
I don't have a ready reference for ad spend evolution over the entire 20th century, but based on the 1980--2000 data, it seems likely highly skewed to more recent times:
I don't know if you have an actual reason to attribute Meta's performance to their business model (apart from not liking advertising). They could reasonably run a steadily profitable business based on advertising without expecting to grow forever.
People learn to ignore ads over time (if not deploying technical countermeasures such as ad-blockers), so even maintaining stability is IMO impossible as the effectiveness of the advertising (and thus the revenue from advertisers who pay for it) will diminish.
> The problem in my opinion is that we have reached peak advertising. Advertising is ultimately a doomed business model as it works against your users' interests, yet requires those users to willingly use the product and engage with the ads.
Isn't the problem much simpler.
It's a shift in users attention to other social networks like TikTok, plus Meta already capture the total addressable market.
It's hard to continue growth when you've essentially plateaued and now users are spending less time on your site.
Nah, this is all about Apple and their ATT changes.
Like TikTok are losing money hand over fist, so it's not that the advertisers are moving to them, it's that advertisers have essentially been forced to give a bunch of the money they were previously giving to Fb to Apple.
Seems premature to crow the death of advertising when not a single social media company has been successful with this alternative scheme you are imagining.
The market is contracting because when rates are high and capital is expensive, ad spending is one of the first you cut.
Not a single company succeeded because up until now, advertising both produced greater returns and neither people nor regulators were interested in its privacy implications.
Now people (and most importantly regulators) are starting to pay closer attention, so the tide might be turning, up until the point where advertising becomes such a minefield that its costs will make alternative monetization models more profitable.
This is a very broad statement. Google's search ads revenue are growing just fine... Youtube is down though.
WPP is seeing increased ad spend as well.
Conclusion? Probably that apple has fucked facebook to such an extent that it's threatening their entire business. This isn't much to do with advertising in general.
> Advertising is ultimately a doomed business model as it works against your users' interests
From the dawn of mass media it has been subsidized by ads. Newspapers, radio, magazines, television, movies (through product placement), music (through sponsorship), podcasts, and even outside of media: sports, schools, mass transit, etc.
Ads have been a monetization strategy across a mind bogglingly broad cross-section of society for over 200 years.
Individualized ads may get regulated out of existence or maybe even out-competed by more consumer friendly options, but people by and large like the subsidies ads provide. Ad supported music, tv, and movie streaming is wildly popular. HN users often post archive.is links to bypass paywalls which actually opts into a paid-for-by-ads experience.
What we see with meta is their ads becoming less valuable and their stock reflecting that. I think it’s a huge mistake to draw any conclusions about the business of ads other than ads are controlled by the platform.
Apple is hoping these ad dollars flow to them, not that the ads go away.
They're placing all their bets on their meta quest pro and pushing people into the metaverse.
Complete control over that environment, combined with the new vr headset's eye tracking+other sensors, would likely make them the best A/B testing / irl ad performance data platform on the block... if it's successful.
Imo, they haven't really proven their case for their metaverse, the price point for the headset is wayyy too high for mass amounts of users to join in, and likely wouldn't join anyways since I'm not on fb/ig and don't trust em
> Is there value in Facebook's products (whether current, or future VR-based ones)? Yes. Is there enough value to justify a overinflated stock price that only got there due to a combination of monopoly position as well as temporary gap in regulation against spyware? Doubt it, and so does the market.
The market also doubts the future VR-based ones. If you think there is value in those future VR-based products then I would say take a chance and buy the dip! Institutional investors are not as deeply involved with computing as we are on this forum.
There is value in VR in that there is at least some demand that Meta is meeting. 1bn+ in quarterly revenue is not nothing. But assuming their VR business could become profitable, the valuation justified by a billion in revenue is still much much much lower, so the dip would be a ways down still.
I must be some of the few persons in the world which enjoy ads in FB, I can even confess that I sometimes log there to search if there any attractive offers regarding to clothing or vacations. It centralizes many offers of different services I’m looking for, but I am very lazy to actively search for them.
IMO the drop is due to the loss in confidence of the shareholders on the vision of the company.
Tangential but I'd be happy to see them become a second-rate company like Yahoo!
I understand Advertising and Marketing have positive social functions, but I also think we are getting oversaturated with it and need to pull back to a "saner" level. Humanity doesn't need the latest crap to survive as a species.
I've got to disagree. I've been involved in many projects and companies where we needed to reach out to potential partners and customers around the world. Advertising was essential. I'm sure there are better ways to do it but as long was we need to get someone else's attention, it will be there.
I don’t think so. I think ad spending is in a temporary slowdown due to economic concerns, and Meta is losing users to TikTok so it’s got less eyeballs to monetize as well. Google for example grew ad revenue this quarter YoY.
After a stint years ago in the adtech business, I adopted a personal rule never to invest in any ad-revenue-based company. (Of course through ETF holdings I can't avoid them).
Besides moral concerns, advertising might be a good investment at the beginning. I predict TikTok will make a killing as they ramp up advertising on their platform now that they've gained a huge audience. However, returns will diminish over time and eventually disappear.
I feel like VR is partially to blame in the sense that it is showing that Meta is a one trick pony, a trick that you pointed out is rapidly losing it luster.
As long as you can attract attention, ads will work. Fb can still attract plenty also there is still no better way to attract attention than a mobile phone
You’re over complicating things. Apple’s Ad Tracking Transparency feature which allows iOS users to opt out of tracking. FB admittedly as much last quarter.
It’s amazing how much more effective a 10 line change to App Store rules was in protecting user’s privacy than a bloated 99 section 11 chapter law - ie the GDPR.
> It’s amazing how much more effective a 10 line change to App Store rules was in protecting user’s privacy than a bloated 99 section 11 chapter law - ie the GDPR.
You should remember this in the future, when Apple have become even worse than FB in terms of advertising. Device growth has stalled, and services (i.e. advertising) is gonna be their new iPhone.
advertising at its essence is dissemination of information to the people who seek it. it’s a win/win done right and essential to an information society
It's going to be an interest year or two if all tech stocks continue to fall. Most of these companies pay largely in RSUs for more senior ICs and managers. RSUs strike a price at the grant date. If you're paid 50% in stock, and the stock falls by 24%, you just took a 12% pay cut.
Meanwhile, the new guy doing the same job as you got their RSUs granted at today's stock price, but the target value for someone at that job level- no pay cut for them, effectively.
It's a recipe for a lot of people swapping jobs just to keep their incomes at the same level.
> If you're paid 50% in stock, and the stock falls by 24%, you just took a 12% pay cut.
On top of this, my experience is that a shocking number of people getting a large part of their comp in RSUs don't diversify when they vest.
I don't work at a FAANG, but 1/3 of my TC is RSUs. Most of my coworkers look absolutely aghast whenever I mention that I liquidate all my vested shares as soon as the trading window is open.
Many of my friends that do work for FAANGs, getting >50% of their TC as RSUs likewise don't diversify as soon as possible, but hang on to it.
What's crazy is if I ask my coworkers "If you had that same amount of vested RSUs in cash, would you invest in our company?" They all laugh and say "no!", but then immediately claim that they won't cash-out and reinvest.
Point being I suspect that individual net worths of a wide range of tech workers are getting absolutely destroyed right now.
> a shocking number of people getting a large part of their comp in RSUs don't diversify when they vest.
Can confirm. A couple of decades ago I was working at EMC. Back then we got options instead of RSUs, but I basically always cashed out as soon as could and moved the money into other things. I figured I already worked there and had the stock purchase plan and the unvested options, so I didn't need more eggs in that basket. All of my coworkers thought I was crazy ... until I watched many of them ride the stock from $114 down to $3 hoping all along that it would come back up.
I was lucky to have learned the lesson the easy way, but I'm pretty sure they all learned it too. Also pretty sure that many of my former FB colleagues are right now doing exactly the same. Twenty years from now, if HN hasn't collapsed into a black hole of toxicity by then, we'll probably be having the exact same discussion about whatever replaces FB. The wheel keeps turning.
What about capital gains? I hold mine for a year because I was under the impression that liquidating immediately would cause you to pay short term capital gains rather than long term.
While you're not wrong, doing this in the last 10 years either had you leaving a ton of money on the table, or diversifying into a highly correlated tech stock / tech driven fund.
>It's a recipe for a lot of people swapping jobs just to keep their incomes at the same level.
Job swapping assumes these tech companies are no longer under a hiring freeze. It also assumes that these companies won't recognize why the mad rush of job swaps is happening and just lower the salaries for new hires.
RSUs are refreshed annually. So if the stock price is now in the doldrums, at least you can hope to get the refresher at a good price in February (or whenever).
This is not true for all tech companies, including FAANGs. For some (many?), the first grant is all you are entitled to, and subsequent "refresh" grants are based on performance, manager discretion, or other non-guaranteed criteria. Hence the "4 year cliff" many people complain about.
It limits the downside too. There's a lot of upside already to making 300k+/year and investing it wisely.
Guaranteed millionaire status with close to 0 risk. Look how spoiled many of us have become in tech, though, that we have people like you saying this. It's not gonna last forever
Any time a company uses "flex" in the name I now associate it with generally making things worse. "Flex PTO", "Flex Pay", "Flex Role" (aka remote but not really)
And your compensation choices are valuable information to Shopify and indicative of your "buy-in" to what they are doing....and therefore could be used against you.
It’s definitely an interesting approach by Shopify and nice to see someone challenge the status quo.
What’s the downside though? Do you get the same dollar amount whether you choose RSU or cash? Does the comp compare favourably to the top of market companies who pay mostly RSUs? Can you potentially lock in a low strike price for your grant over four years or is it more like an ESPP? (Of course the last year showed this is not always a winning strategy lol).
My assumption is that paying employees in RSUs works out more favourable for the companies than paying all cash so I’d expect it to be lower if you take all cash (I have zero knowledge of accounting mind).
Most companies give cash bonuses when the stock tanks. I remember Microsoft doing this and I think I read recently Amazon was doing it too, or at least adjusting the mix of stock vs cash compensation.
No one ever seems to talk about the fact that RSUs should be treated as bonuses not as real income. It’s nice if they work out but you should never rely on them being worth anything.
Pay cut is relative. If you started 5 years ago you still wouldn’t have a pay cut. But if you only count the fall from the peak, yes you have a “pay cut”.
Is there some different treatment of money spent on options (vs RSUs) that isn’t apparent from the Shopify blog post? I’m not understanding why someone would pick options ever in this scenario but maybe I’m just getting thrown off by demo text in the blog post
Also, mechanically, as someone who was paid primarily in RSUs last year, you pay taxes based on their value at the date of grant. This is painful if they go down quite a bit between when you receive them vs tax time.
> With RSUs, you are taxed when you receive the shares. Your taxable income is the market value of the shares at vesting.
You pay taxes at date of vest not grant. Small terminology difference, but important - if you sell your RSUs immediately, you never lose $ after taxes.
This varies widely country by country. I think your case applies to Germany(at least for options). Most of the Nordic and Baltics pay tax on value at vesting afaik.
I heard some German employees got screwed by option grant taxes when the stock tanked between grant and vest. Some even took loans to pay the taxes.
Most people should always just sell the stock immediately to cover tax burden. I mean, do whatever you want, but why set yourself up for tax liability risk at all. There are tons of other good investments out there that will mitigate concentration risk.
If there's actually a strong fundamental basis for upside (not 10x sales fantasy valuation), it could be prudent to hold in some cases
The online advertising party is over. It’s going to hit all advertising platforms badly.
Facebook has been hit particularly hard by the iOS changes, but that’s not the cause. If Apple hadn’t made that change themselves, government regulations would have been brought in that implemented it.
I also don’t believe the increase in AI is a solution to the regulations around tracking.
Advertising online is increasingly a black box, you put money in one side and the algorithm sends you traffic. The control and insight that used to be there is gone. I don’t believe advertisers will continue to trust this AI based future, I certainly don’t (have run an e-commerce store for 10 years).
I don’t want “deep tracking” and profile building. I just want manual controls and visible conversion tracking. But we are never getting that back.
Yet both Netflix and Disney+ are introducing cheaper ad-supported tiers. Consumers want cheaper services, at the cost of advertising.
Hacker News lives in a bubble of users that understand and value privacy, knows about browsers such as Brave, etc. The rest of the world just wants their influencer content.
If an average Netflix viewer watches Netflix 70 hours per month - they will spend 6 of those hours watching ads - to save $3. It's a sucker's deal. Sure, some extreme savers will be so blinded by the promise of CHEAPER that they will probably go for it.
GDPR already tightly regulates the use of AI for automated decision marking affecting consumers, and other regulators aren't too happy about the directions taken by either AI companies or advertisers.
Indeed its pretty infuriating to see how fast you can burn cash, get meager results with no real understanding or knobs to tweak to try and help yourself out.
Is it entirely fraudulent? Are your ads showing up on a site that specifically tries to game the ad placement system? Who knows! Probably though, because the few times I've seen it tried the results were abysmal at best.
The only way profile building will survive is personalized recommendations from friends. Suggestions from people I know and trust would recover a lot of the current trust erosion: "your friends X and Y both have eaten here a few times" is a much stronger recommendation than "we think you'll like this based on trust us."
I was extremely bullish on Meta’s VR effort. The Quest 2 is extremely impressive and you really feel like peering into the future of computing.
I’m starting to realize that it may be the far future. The $1500 Quest Pro was just released to scathing reviews. The AR color passthrough feature sounds like a low quality joke. The headset is heavier and the battery lasts a hour or 2. The screen fidelity is still too low for productivity computing. The eye and face tracking result in extremely underwhelming animation that I can’t imagine adds any value to the social proposition. The primary Meta dream of all your social interactions in VR with friends, family and coworkers around the world is starting to seem more than a decade away.
And on top of all that, Apple looks like it may have a serious entrant into this market and might easily beat Meta to the finish line to the next computing platform.
Outside of gaming ... I don't understand who the current efforts in VR are FOR?
There was an arstechnica article about Carmack giving a speech about the state of VR.
Apparently he was dismissive of some controversy regarding avatar details. And was disappointed that they weren't yet at the stage where they could hold "arena-scale support with thousands of avatars milling around".
Who wants that? I don't want to put on a headset to sit in the nose bleeds of some virtual world with Zuck or Carmack ... that only seems to appeal to: 1. Developers making the cool thing work. 2. The person on stage talking who gets to just put on a headset to appear before thousands of people.
The killer app for VR is unfortunately going to be porn, although it seems many stakeholders are unaware of that. E.g. Neither Zuck nor John Carmack seem to have realized this yet.
But it makes sense when you realize that VR is inherently isolating and is hard to use collaboratively/socially. This is a bug for many applications and a feature for porn.
You nailed one of the biggest problems with current efforts out of Faceb...Meta. They are trying to recreate physical experiences in VR including the exclusionary limitations of physical environments.
A concert in VR has none of the natural limitations of a concert in the real world. Every member of the VR audience should be able to watch the concert from any location. Everywhere from on stage with the band to it just in a window in SIMD other virtual space so it can just play in the background while doing something else.
Even "stage" is a silly concept in VR, the concert could take place in a Star filled nebula or the halls of Moria. A concert in VR could look like a music video of a band playing in some crazy location in impossible costumes.
VR clients should also be able to control what they see. Watching that VR concert they should be able to enable or disable whatever elements that they want. They should be able to change a parameter and shift the concert venue to some other motif or disable the rest of the crowd to have a private show.
Instead of any of that Meta is just building nosebleeds thinking people are interested in having those physical limitations. If VR doesn't enable experiences that would be impossible in the real world then it's just a shitty lower fidelity version of the real world. Zuckerberg can go surf on his private beach in Hawai'i whenever he wants. Everyone in VR should have the same luxury of a private beach, dwarves forge, or a space station orbiting Jupiter. Meta is building VR where users are just as excluded from private beaches as they are from Zuckerberg's private beach. No one wants to be as poor in VR as they are in the real world.
I think legitimately there could be a product that you put on your face and get a virtual on-site with photorealistic avatars. Or a pair of glasses that give you multiple 24 inch 4k screens that you could work on all day. And a replacement for Facetime sounds compelling as well, essentially a holographic call where there mom shows up in your living room from the other side of the country.
And yeah the gaming case is already pretty compelling when you look at things like Alyx, so just imagine more of that plus AR games that don't take you out of the real world.
At the end of the day you are talking about a display technology that can produce anything from an animated chess set on your kitchen table to the closest thing I will ever see to a Holodeck in my lifetime. In my mind computing will absolutely make the move from little pieces of glass in our pocket to AR, I just think it's going to take 10 to 20 years for moore law and miniaturization to do their thing.
I actually think tons of people want virtual experiences. Concerts seem to be a great use case for VR. Exercise is a great use case. Meetings probably are too, certainly better than zoom.
I mean, if you had the chance to experience being in the front row of the Super Bowl virtually vs watching a flat 2d perspective, some people would want the 3d immersive 'feel like you're there / presence' experience. Same goes for concerts, burning man type stuff, music festivals, an intimate jazz performance, a Broadway musical, going to a zoo virtually, tourism like being in the bottom of the grand canyon, etc.
They are not substitutes for the real thing they are substitutes for a 2D version that is usually pretty non-compelling.
The real limitation is that the lack of tactile feedback means that you are at most a spectator/voyeur in these experiences.
I cant imagine a world where 2B users are using VR, but if that world happens, it seems like it will be long after FB gives up and runs out of steam trying to build the MV.
Investors will not tolerate years of huge losses, Zuck will probably lose his job
Yeah, and technologists don’t give a shit about what regular people think. When have they ever advanced the state of how we use technology? In 20 years they’ll be happily be using VR glasses, completely having forgotten their initial skepticism.
Metaverse is a virtual 3D world, like a MMORPG game, right? Do you necessarily need VR to participate in such worlds? I had a VR headset, it's very tiring to wear it for a long time.
I think VR is fair bet with how batteries need to improve (elecrtic cars). They can work on system/algos and battery breakthrough will make it all viable some day
I had a friend who used it and it overheated her phone. It had problems after that. I never used the cardboard kit I got because of that story. I have no idea what the failure rate data was, but anecdotes are enough to kill a product.
They did keep working on it and released Daydream, which was dedicated holder for phone. They included VR support in Android and there were a few supported phones. But they canceled it and removed compatibility from OS. I still have mine, which was free with a Pixel phone, but not sure I can use it.
I still use mine occasionally. I'm not using it for anything spectacular, but every once in a while there's an AR thing or a Youtube video that's worth watching that way.
Pre-iPhone smartphones catered to a niche audience. Tablets weren't very popular in the market pre-iPad. Bluetooth headphones were around for over a decade with a lot of people ignoring them before Airpods popularized them. Personal media players weren't nearly as mainstream before the iPod. Almost all of these product markets existed and mostly catered to niche audiences before Apple jumped in.
Of course, those are mostly their successes. They had stumbles too, no doubt.
If there's one thing Apple excels at, its convincing the mass market to adopt technologies that currently only cater to a niche audience. I have no idea what their plans for VR are, but I do imagine if they do something in it they'll make some waves. But maybe it'll turn out like the Newton. Maybe they will never launch a VR product. Who knows.
It's getting better every year, the hardware just wasn't there before. I think the sweet spot will be in new vr-native experiences and not awkward skeuomorphic-ish implementations of the offline world in VR(which is what horizon seems to be trying to do) or gaming. Turning a 2D experience into a VR one will continue to have worse graphics and odd mechanics for the foreseeable future, and gaming in VR is just not relaxing compared to sitting on the couch with a controller. Not everyone wants to flail about and gesticulate after a long day of work.
I personally like to sit back and watch random "experiences," virtual tours and stuff and when I introduce someone new to VR I show them these first rather than games. Complete immersion without having to think about what to do with your hands.
Another interesting experience is Liminal https://liminalvr.com/ It uses sounds/visual stimulation with the intent of affecting your "mood" and it's being developed by bona fide psychological researchers. It's truly something that can only exist in VR!
Bingo. It's been about a decade now since the revival of VR. We've had 10 years of, "everyone is going to be computing in 3D". It never materialized. Worse, it looks like the content is shrinking and stagnant.
I call bullshit. VR has a pure ergonomics problem and Meta is chipping away at that every year, this Quest Pro is so nearly there and the second we get VR sunglasses it's done. It's over. It will become mainstream and the PC will go the way of the typewriter.
If Zuck had never embarked on his VR adventure, and Apple today came out with a device exactly like the Quest Pro but with no advance leaks about what it’s like, people would be stunned.
But the VR excitement pool has been poisoned by Meta’s image and a decade of overpromise.
If history is any indicator, Apple is no where near releasing an AR/VR headset. They are never first to market, they have always waited until the tech is mature and people are ready to deliver a cohesive amazing experience. The argument that iphone was first to market could be argued for first without a keyboard, but just about everyone had a cell phone and most had some form of smartphone at the time.
Where would VR even be if Zuck hadn't bet facebook on it? I'm not sure it'd be getting the attention it is, the hardware isn't ready, the software isn't ready and frankly users aren't ready.
Cardboard -> Note 4 with Gear VR -> S8+ with newer Gear VR -> Oculus Rift CV1 -> Oculus Quest 2 -> Selling my Quest 2 (and CV1) because Facebook (temporarily) made Facebook accounts mandatory to use it.
I doubt I'll ever purchase another VR headset from them in the future.
Cardboard blew my mind at the time, I was so excited to get a taste of VR.
I went Cardboard (though used it very little, probably only 1 hour cumulative) -> HTC Vive -> Valve Index.
I'll probably buy a Valve Index 2 if it ever happens.
Portable VR is highly limited by battery power. VR requires high pixel counts and high framerates to be immersive, and pushing that many pixels uses a lot of power.
I was watching https://www.youtube.com/watch?v=x6AOwDttBsc about Meta's VR prototypes. They seem pretty clear-headed on where they need to get to, but a lot of it seems like a decade away. At double the price-point of Quest Pro, Apple may solve some of VR's issues (battery-life, speed, ergonomics and looks) but the screen-tech just doesn't exist yet.
Google should throw resources into Project Starline and shift their focus from business to personal use. I get it's insanely expensive and that shouts "enterprise!" but people will pay a lot for a realistic enough experience of being with their loved ones that they don't get to see.
Apple's advantage in silicon will win the AR/VR war. Meta is out there talking about 1-2 hours of battery life for the Quest Pro. I'm very curious to see what performance Apple's headset/glasses/whatever provides on their own chips.
Certainly seems that way with their entry into the advertising market. Watched and learnt from DoubleClick, Google and Facebook. Cut them off and now it's time to strike.
Apple is huge in gaming. Earlier this year, Mashable reported that mobile gaming was now 60% of the entire gaming market. Consumers apparently spend $1.6 billion per week on mobile games.
Meta seems to be trading the capital they have built up to advance a new era of 3D immersive computing. If the talk of creating a more open system is genuine, and the hardware itself becomes ubiquitous and cheap, Apple's closed system dependent on expensive marked-up hardware will eventually collapse.
I personally think that the AR/VR will have a big market in the future. The question really is, how far away? 5 years? 10 years? 15 years? And will Meta be one of the winners when it's all said and one?
Meta is hellbent on creating a platform so they can be the iOS/App Store instead of just an app.
The stock is sliding because we're entering/in a phase where raising money is hard and cash is king. Companies are trying to pull back on investments and bets that might or might not pay off. Meta just told Wallstreet that it doesn't plan to pull back on Metaverse spending in 2023.
I still can't see how anyone would want to wear a headset for 8 hours a day to do their job like their promo videos show. Especially an office based job where their promotional videos show someone working with "large virtual screens" in an "ideal workspace setup". Surely most users would prefer actual screens and work without the headset on all day. Maybe the next hot thing is actually bigger and cheaper screens, not VR headsets.
I don't. I don't even own a VR headset. I tried the Quest Go or whatever it was called back in 2018. It was awful. I returned it immediately.
But I can see GenZ or the generation after GenZ embrace VR/AR. It doesn't have to be wearing a headset. It could be glasses when you're not wearing VR. It could be your phone when you're not wearing VR.
If you're doing development for a VR application it's the way to go. Having to put the headset back on repeatedly to check out a change is annoying. I'd prefer all my meetings to be in VR as well since zoom is such a soulless and anti-social experience. My current work setup involves a 43" TV used as a main monitor so I can actually have enough room in the Unreal Editor to do shit plus 2 more monitors on the side for reference and other tools. I'm thinking of adding a couple more monitors since I still have to juggle windows sometimes. Being able to just have as many monitors as I needed at any one time positioned and sized perfectly would be a dream. Even when I'm doing non-VR development work I believe I'd benefit from this. The dealbreaker is how comfortable the headset is, I haven't tried the Quest Pro yet but it looks like they're moving in the right direction for comfort.
Meta's problem is that mark just told wall st. to fuck off. Every investor is screaming to lower costs and he's raising them. It's not next years profit that investors are scared about, it's their lack of control over mark. This earnings report would mean Mark is fired even if he controlled 40% of the votes, it was that reckless.
To me the issue is that Meta is pushing to attack three challenges at once.
On one hand there’s the hardware. Even now, people report motion sickness with the hardware. If you are trying to create a computing interaction medium of the future, these details around accessibility are going to be incredibly important. And I haven’t even mentioned battery life. So meta is working away at this very expensive challenge
The second challenge is the interaction model. No one is entirely convinced yet of what interaction with computers should look like in VR. Right now it’s “mouse/touch+windows but in VR. That’s like when TV and cameras first happened and it was theater shows but on the tv screen. So Meta now has to invent or at least shepherd computing integration models and that is also incredibly expensive.
And finally there is the metaverse. Technically we all live in the metaverse already. I interact with people I don’t know across forums and social media. I interact with them more than I do with some of the people I know in real life. I play games online which have meta worlds (Minecraft, temtem, and animal crossing for example). I may not have a single game of infinite worlds and meeting places but the concept of a universe within my existing world already exists and it’s served to me by the internet. But Meta wants to make it a ready player one kind of experience where I interact with it through a VR experience. That seems really forced because they are drawing a line in the ground saying that VR is how the metaverse can exist. This is also an expensive bet especially when the interaction model hasn’t been figured out yet.
I don’t know where this is heading for meta but their goal of creating the next big computing and interaction platform with app stores that they control instead of apple or google is incredibly ambitious but seemingly poorly executed thus far.
I don’t disagree with your overarching analysis, but:
> And finally there is the metaverse. Technically we all live in the metaverse already. I interact with people I don’t know across forums and social media.
Meta properties are already a huge share of this activity. Think FB, Instagram, WhatsApp, …
they should focus on the B2B use cases, the Metaverse is cringeworthy but the virtual desktop stuff I've seen actually makes me consider buying.
They just need to show the ROI vs buying multiple monitors, maybe put out some studies showing their VR meetings are more effective than Zoom, show the productivity boost of being able to use VR to tune out distractions in open offices. Get enterprise customers to buy fleets of VR for their employees and then launch some sort of SaaS marketplace for Meta devices and take a cut. Facebook now has their app platform they've wanted
Zuck's focus on social is what's ruining it, plus just the optics of him. He needs to disappear for awhile
The virtual monitors stuff looks pretty in tiny Internet videos, but doesn't hold up on the actual headset. The resolution of both of the display and passthrough cameras is still abysmal, barely better than Quest2 and a tiny fraction of a real monitor. You can compensate a bit by making the virtual monitors much bigger than a real one, but even that only goes so far. At the end of the day, it's about the same experience as putting a big old 720p TV on your desk.
Resolution aside, going with virtual monitors also just shows how primitive the whole thing still is. From a 'workspace in VR' I would expect to get actual window management and UI elements in full 3D space, not just my 2D monitor projected to a virtual rectangle. Microsoft's WMR Portal had that five years ago (not without faults), Meta's attempt feels quite primitive and basic in comparison.
The problem for Meta is that it's almost certainly not going to look like what they're selling with their Metaverse which is some kind of Second Life knockoff. They went all in on a failed plan.
Well if all the end up with is the best hardware that's definitely going to be worth something. But what they really want is the app that people spend all their time on.
the rebranding was to skirt antitrust and regulatory scrutiny. They’re trying to convince regulators and the jury they are a AR/VR company, even though their entire business is (and will be) all funded by ads and data mining.
This very much reminds me of Apple's Newton. It was actually quite amazing given the technical constraints imposed on making something to be shipped in volume, but not only was it underpowered for what it tried to be, the "killer app" for mobile devices would turn out to be wireless internet connectivity, and the world simply wasn't ready for that yet.
Apple started Newton development in 1987, killed it in 1997 when Jobs returned, and launched iPhone in 2007, arguably the biggest consumer product hit in history.
I'm rooting for Meta's demise, but history shows that it's quite possible for a company to try something, fail spectacularly, but come back and get it right when the universe catches up to the ambition.
Then again, Palm launched their first device in 1996, and had a big hit. But by the end of 2011, they were done. There are no guarantees that the company creating a market will be the one to profit from it.
Facebook and Google got hit very hard in the recent quarter, but none of the articles point out one of the obvious reasons contributing to their drops: Apple made it significantly harder to track macOS and iOS users, which people tend to be high value targets for advertisements.
I think that's a dangerous way to frame it. It's certainly the narrative Facebook wants out there.
Apple provided their users with more control over how their data is shared and those users overwhelmingly said no to Facebook and Google tracking them.
This was priced in last year when facebook said it would cost them $10 billion a year. Google has next to no presence in mobile apps/non-browser ads so I dont think they care much.
I think you mean "Apple made it significantly harder for anyone but Apple to track macOS and iOS users". To their credit, it's a strategic masterpiece, as their hardware market growth slows they've built an impressive system to give than an edge in services and advertising.
Are you saying they have different rules for other advertisers than themselves in terms of what a user can control about what’s being tracked about them that can be used to drive ads?
I started my Oculus Quest a couple days ago after a small hiatus, and it forced me to create a Meta account and set up a Horizon profile. Looks like Zuck is pushing really hard for his Metaverse thing. Ah, yes please, I would love to be in a VRChat universe flavored with all that Facebook goodness, I can't think of a better way to use my headset.
Forcing me to sign up with my IRL account was the no.1 reason I avoided the oculus.
I don't want fb tracking me roleplaying as a catgirl or doing some other degenerate activity with my 3D avatar and "accidentally" leaking data to advertisers or worse, family and friends.
With their track record, Facebook is the last company I'll trust with my data. No wonder they had no issue rebranding with such a lousy reputation.
I had a similar experience. I dusted off my Oculus Quest the other day thinking of revisiting some of the games I like there and seeing how well they had aged.
Immediately was prompted to create a Meta account and no longer had access to all the games I had purchased or installed years prior.
Tossed it right back in the bin it had been collecting dust in, which will likely change to the trash fairly soon.
Zuck has to push, otherwise he's out. He can't gracefully abandon the Metaverse after spending $12B and literally rebranding the company. Metaverse will either succeed, or Zuck will be sidelined.
Just remember the Mantra of Silicon Valley: "First they ignore you, then they laugh at you, then they fight you, then you win" -Gandhi
To be ignored or laughed at is, in a traditional SV company's mind, simply stage 1 or 2 of the plan, and if stage 4 never happens it's because they were "ahead of their time" or something, never can it be that the idea is fucking stupid.
Readit News
The problem in my opinion is that we have reached peak advertising. Advertising is ultimately a doomed business model as it works against your users' interests, yet requires those users to willingly use the product and engage with the ads.
Over time, users learn to ignore it (see "banner blindness") so a short-term response is just to include more ads to compensate, but there's only so much space before the entire product becomes saturated with ads and users leave completely because the inconvenience of advertising became greater than the value the product provides. Regulators are also wisening up to it with stronger privacy protections (that threaten non-consensual ad-targeting) all around the world.
Advertising is a time bomb and an unsustainable business model. It provides short-term revenue (and a lot of it if you play your cards right, as Meta's stock price until now reflects) but will never be sustainable in the long run. Advertising is a parasite and its host will always try to get rid of it - a pretty terrible business model when you can instead align the incentives by charging your users money and provide them a valuable service in exchange.
Is there value in Facebook's products (whether current, or future VR-based ones)? Yes. Is there enough value to justify a overinflated stock price that only got there due to a combination of monopoly position as well as temporary gap in regulation against spyware? Doubt it, and so does the market.
What you say is probably one reason, though. But the actual crash is more likely because Meta didn't innovate and move away from-, or diversify their advertising-model over time. So rather than a steady change through continued innovation, A&M etc, they are now forced to bet on a giant pivot. For one, this makes investors nervous.
Meta has performed several M&As though, some of which proven extremely profitable and successful. But while e.g. Instagrams' userbase is different from FB, their income is based on almost the exact same model of targeted advertising. FB failed to move into ecommerce, video, streaming, etc. and diversify their income significant. Something that Amazon or Google do much better.
The same isn't true for Facebook. I've stopped using this 7 years ago and I didn't even miss it for one day. One day my wife was scrolling through FB feed and all I can see is ads after ads after promoted pages. She scrolled for like 5 minutes, encountered may be 2 posts from her acquaintance circle and then she closed the app. The boredom while browsing FB feed was visible in her eyes.
FB simply doesn't offer any value these days. Almost everyone I know has gradually stopped using FB. This is an app with very low signal to noise ratio.
The advertising market is definitely slowing with the high rates.
This is similar; everyone dependent on advertising is struggling to an extent, but most of them aren't currently setting fire to vast piles of cash in service of an idiosyncratic project which most people don't have much hope for.
They've invested so much reputation wise (changing their name even) that it's very hard for them to back down, maybe impossible considering who makes that call.
Sort of, but not quite. We had already kind of reached peak advertising, this isn't recent. More specifically the following trends:
- Advertising has been and is expected to continue to grow at a measly 5% per year on average[0] (compare that to say like 10% on Software)
- Digital advertising's cannibalization (e.g. the pie shifts) of traditional media is slowing down and hitting diminishing returns
- We're hitting peak media use at 12 hours 9 minutes per day[1]. There's just physically not enough hours in the day to consume more media.
- There are more players trying to capture that consumption. Facebook's properties's use are diminishing compared to competitors (e.g. basically TikTok).
TL;DR - Pie only grows 5% per year, digital is getting close to eating a majority of the pie, and people that aren't Facebook are eating that pie and Facebook can't compete.
[0] https://www.imarcgroup.com/global-advertising-market
[1] https://review42.com/resources/how-much-time-do-people-spend...
Arguably, advertising initiated in bulk print (newspapers and magazines), see Benjamin Day's The Sun (1833). I've mentioned Hamilton Holt's Commercialism and Journalism (1909) many times, it's an excellent summary of early advertising-based publishing, and its many problems: <https://archive.org/details/commercialismjou00holtuoft>.
Radio stole the thunder from print as a more passive and accessible medium, television from radio. Targeted cable offerings sniped over-the-air broadcast. And now online advertising is dominating both print and broadcast. I'd argue that billboard advertising has shown similar patterns as well, expanding rapidly with highway construction, seeing a strong backlash (beginning in the 1960s, notably by Lady Bird Johnson: <https://www.sandiegoreader.com/news/2001/jun/21/what-happene...>), and over the past several decades, trending strongly to very low-value advertisers ("gentlemen's clubs", lottery and casino ads, the classic anti-goods of alcohol and tobacco, as well as the increasingly ubiquitous "your message here" placeholders, being strong indicators of this, particularly outside high-wealth metro regions).
I don't recall who made the observation, but in the content industry, it's interesting that music, film, and books are exceptions to the advertising-supported nature (mostly, there are a few exceptions, mostly minor, though the expanding length of trailer and pre-film advertising in theatres would also be an exception ... this may have been mentioned in an Ezra Klein episode).
And speaking of Klein: that podcast includes advertising. I find myself averse to listening when I know I'm going to have to hear those (e.g., I can't intervene to skip the ads, such as when I'm doing household tasks), and will avoid listening to it. There are a number of other podcasts which are similar, a surprisingly large number being of what are nominally public-radio programmes --- Freakonomics comes to mind. Combined with IMO lackluster quality, I'm actively avoiding many of these, and have unsubscribed to several. Independent and academic podcasts are more my style, History of Philosophy by Peter Adamson and Complexity from the Santa Fe Institute being among the best.
And more recently, the vast expansion of direct marketing over p2p networks, most notably landline and mobile telephony, is making the experience of subscribing to those services increasingly undesirable. Much in the same way as spam and simply information overload seems to be making open-standards, universal-access email much less widely used (many organisations no longer publish email addresses, or respond to emails where such addresses can be found), an overall frustration level can in fact kill general use of a medium or channel.
John Gottman's five-to-one ratio of positive to negative experiences, originating in relationships but apparently having broader applications, may well play a role here. If even a relatively small minority of experiences over time with a technology, medium, or channel are negative, that impression tends to strongly discourage long-term favourability. See: <https://www.gottman.com/blog/the-magic-relationship-ratio-ac...> (for the relationship side, the ad/media extension is my own suggestion, though I suspect others have argued similarly).
As Nextgrid's comment notes, the real problem with advertising is that it's a race-to-the-bottom market, especially where high-value / highly-attractive audiences flee. Higher-quality advertisers similarly depart, and both the products marketed and methods utilised tend to ever-increasing toxicity in both figurative and literal senses. As I mentioned a couple of months ago, advertising ultimately has a reverse-Midas touch: it turns gold to shit: <https://news.ycombinator.com/item?id=32669503>
Part of the constant-platform-migration trend seems to be explained by highly-valued audiences tending to be early adopters of such platforms. Early advertising returns are high, and for all parties (publishers, advertisers, and audiences) the initial experience tends to be positive. With both wider adoption and early-adopter defections (leaving the media/platform), that kicks off the death-spiral dynamic.
Ad based business models have a redistributive effect. Services like Facebook are paid for in proportion to spending power whilst usage has a completely different distribution. So wealthier users are effectively subsidising less wealthy users, which enables broad network effects and economies of scale.
People will always pay to influence other people. I think advertising while being annoying is one of the less malign forms of doing that. It also has privacy preserving characteristics as there is nothing more destructive for privacy than making a payment. That doesn't mean we shouldn't regulate to limit ad targeting. I think we should.
This is a very interesting take and I'd like to see some further delves into this.
As a consequence of this, I think advertising will always persist irrationally unless the system if changed to prevent this irrational behavior. A really high tax on any ad spend would probably work.
I've only read peripherally about this and don't have any good sources handy, but it's a historical fact which strikes me as quite interesting.
High tax on ad spend would be a throwback to our Christian moralist days where we decide that some spending is good spending that we like and other is bad spending. Most attempts to ban payment for boosting speech have failed, see citizens united.
Advertising can be a sustainable business model. Radio, television, billboards, etc. sustain themselves through advertising. We can quibble about their growth rates, but if advertising were unsustainable, then these industries wouldn't exist in their current form.
I think you're actually rejecting the idea that a company can sustain infinite growth through advertising. I think that's a little different from being wholly "unsustainable."
IIUC they are not claiming that basic practice of advertising goods and services you provide is doomed.
As I've recently posted to this thread, Hamilton Holt's 1909 account is an excellent introduction to the beginning of this period:
<https://archive.org/details/commercialismjou00holtuoft>
Google's Ngram Viewer suggest that the terms "advertising agency" and "advertising copywriter" only came into vogue during the 1920s, which would be only just at the century mark:
<https://books.google.com/ngrams/graph?content=advertising+ag...>
I don't have a ready reference for ad spend evolution over the entire 20th century, but based on the 1980--2000 data, it seems likely highly skewed to more recent times:
<https://www.visualcapitalist.com/evolution-global-advertisin...>
There's probably a pretty good historical basis for the series Mad Men to have been set in the years 1960--1970.
<https://en.wikipedia.org/wiki/Mad_Men>
If you look into FB financials, revenue per user has more room to grow, outside US if nothing else, but I think US as well.
So "advertising model broken" isn't really true. It is irritable and despicable/deplorable in some ways for sure. But it works.
Isn't the problem much simpler.
It's a shift in users attention to other social networks like TikTok, plus Meta already capture the total addressable market.
It's hard to continue growth when you've essentially plateaued and now users are spending less time on your site.
Like TikTok are losing money hand over fist, so it's not that the advertisers are moving to them, it's that advertisers have essentially been forced to give a bunch of the money they were previously giving to Fb to Apple.
The market is contracting because when rates are high and capital is expensive, ad spending is one of the first you cut.
Now people (and most importantly regulators) are starting to pay closer attention, so the tide might be turning, up until the point where advertising becomes such a minefield that its costs will make alternative monetization models more profitable.
WPP is seeing increased ad spend as well.
Conclusion? Probably that apple has fucked facebook to such an extent that it's threatening their entire business. This isn't much to do with advertising in general.
From the dawn of mass media it has been subsidized by ads. Newspapers, radio, magazines, television, movies (through product placement), music (through sponsorship), podcasts, and even outside of media: sports, schools, mass transit, etc.
Ads have been a monetization strategy across a mind bogglingly broad cross-section of society for over 200 years.
Individualized ads may get regulated out of existence or maybe even out-competed by more consumer friendly options, but people by and large like the subsidies ads provide. Ad supported music, tv, and movie streaming is wildly popular. HN users often post archive.is links to bypass paywalls which actually opts into a paid-for-by-ads experience.
What we see with meta is their ads becoming less valuable and their stock reflecting that. I think it’s a huge mistake to draw any conclusions about the business of ads other than ads are controlled by the platform.
Apple is hoping these ad dollars flow to them, not that the ads go away.
Complete control over that environment, combined with the new vr headset's eye tracking+other sensors, would likely make them the best A/B testing / irl ad performance data platform on the block... if it's successful.
Imo, they haven't really proven their case for their metaverse, the price point for the headset is wayyy too high for mass amounts of users to join in, and likely wouldn't join anyways since I'm not on fb/ig and don't trust em
The market also doubts the future VR-based ones. If you think there is value in those future VR-based products then I would say take a chance and buy the dip! Institutional investors are not as deeply involved with computing as we are on this forum.
Analysts explicitly think the VR effort is overfunded. It's the problem according those who are trading.
It’s amazing how much more effective a 10 line change to App Store rules was in protecting user’s privacy than a bloated 99 section 11 chapter law - ie the GDPR.
You should remember this in the future, when Apple have become even worse than FB in terms of advertising. Device growth has stalled, and services (i.e. advertising) is gonna be their new iPhone.
https://www.newsguardtech.com/misinformation-monitor/october...
Meanwhile, the new guy doing the same job as you got their RSUs granted at today's stock price, but the target value for someone at that job level- no pay cut for them, effectively.
It's a recipe for a lot of people swapping jobs just to keep their incomes at the same level.
Or, companies can do as my employer did (bias note) and switch to a new comp system that avoids these problems: https://news.shopify.com/rewriting-the-story-of-compensation
On top of this, my experience is that a shocking number of people getting a large part of their comp in RSUs don't diversify when they vest.
I don't work at a FAANG, but 1/3 of my TC is RSUs. Most of my coworkers look absolutely aghast whenever I mention that I liquidate all my vested shares as soon as the trading window is open.
Many of my friends that do work for FAANGs, getting >50% of their TC as RSUs likewise don't diversify as soon as possible, but hang on to it.
What's crazy is if I ask my coworkers "If you had that same amount of vested RSUs in cash, would you invest in our company?" They all laugh and say "no!", but then immediately claim that they won't cash-out and reinvest.
Point being I suspect that individual net worths of a wide range of tech workers are getting absolutely destroyed right now.
Can confirm. A couple of decades ago I was working at EMC. Back then we got options instead of RSUs, but I basically always cashed out as soon as could and moved the money into other things. I figured I already worked there and had the stock purchase plan and the unvested options, so I didn't need more eggs in that basket. All of my coworkers thought I was crazy ... until I watched many of them ride the stock from $114 down to $3 hoping all along that it would come back up.
I was lucky to have learned the lesson the easy way, but I'm pretty sure they all learned it too. Also pretty sure that many of my former FB colleagues are right now doing exactly the same. Twenty years from now, if HN hasn't collapsed into a black hole of toxicity by then, we'll probably be having the exact same discussion about whatever replaces FB. The wheel keeps turning.
I spent a lot of the last decade at facebook. I immediately cashed out every single vested RSU and plowed the money into broad market ETFs.
It always blew my mind how many of my coworkers were willing to leave a huge chunk of their net worth invested in their employer's stock.
As you might imagine, I'm feeling pretty good about my strategy right now.
Job swapping assumes these tech companies are no longer under a hiring freeze. It also assumes that these companies won't recognize why the mad rush of job swaps is happening and just lower the salaries for new hires.
Now there's three hits. Employees generally kept their stock. So their savings went down. The pay is down as you said. Lastly inflation.
In addition job mobility is down. There's still plenty of tech jobs but it's definitely down and not as easy to just switch.
It's one hell of a return to earth although perhaps overdue.
Guaranteed millionaire status with close to 0 risk. Look how spoiled many of us have become in tech, though, that we have people like you saying this. It's not gonna last forever
What’s the downside though? Do you get the same dollar amount whether you choose RSU or cash? Does the comp compare favourably to the top of market companies who pay mostly RSUs? Can you potentially lock in a low strike price for your grant over four years or is it more like an ESPP? (Of course the last year showed this is not always a winning strategy lol).
My assumption is that paying employees in RSUs works out more favourable for the companies than paying all cash so I’d expect it to be lower if you take all cash (I have zero knowledge of accounting mind).
I did this while at Facebook eating the shit while the stock price grew, but now... I feel like a genius.
It's a great deal if you plan to stay with the company for a long time and think the stock will go up quite a bit, because you multiply your gains.
You pay taxes at date of vest not grant. Small terminology difference, but important - if you sell your RSUs immediately, you never lose $ after taxes.
https://www.schwab.com/public/eac/resources/articles/rsu_fac...
I heard some German employees got screwed by option grant taxes when the stock tanked between grant and vest. Some even took loans to pay the taxes.
Most people should always just sell the stock immediately to cover tax burden. I mean, do whatever you want, but why set yourself up for tax liability risk at all. There are tons of other good investments out there that will mitigate concentration risk.
If there's actually a strong fundamental basis for upside (not 10x sales fantasy valuation), it could be prudent to hold in some cases
Facebook has been hit particularly hard by the iOS changes, but that’s not the cause. If Apple hadn’t made that change themselves, government regulations would have been brought in that implemented it.
I also don’t believe the increase in AI is a solution to the regulations around tracking.
Advertising online is increasingly a black box, you put money in one side and the algorithm sends you traffic. The control and insight that used to be there is gone. I don’t believe advertisers will continue to trust this AI based future, I certainly don’t (have run an e-commerce store for 10 years).
I don’t want “deep tracking” and profile building. I just want manual controls and visible conversion tracking. But we are never getting that back.
Hacker News lives in a bubble of users that understand and value privacy, knows about browsers such as Brave, etc. The rest of the world just wants their influencer content.
Apple did not do anything to really prevent "deep tracking" and profile building.
In fact, the single primary casualty of their changes is the exact thing that you say you do want: visible conversion tracking.
How do you advertise your e-commerce store?
Why not? If ROI remains high, why would I care ?
So there's a very, very big "if" on future ROI.
Is it entirely fraudulent? Are your ads showing up on a site that specifically tries to game the ad placement system? Who knows! Probably though, because the few times I've seen it tried the results were abysmal at best.
I’m starting to realize that it may be the far future. The $1500 Quest Pro was just released to scathing reviews. The AR color passthrough feature sounds like a low quality joke. The headset is heavier and the battery lasts a hour or 2. The screen fidelity is still too low for productivity computing. The eye and face tracking result in extremely underwhelming animation that I can’t imagine adds any value to the social proposition. The primary Meta dream of all your social interactions in VR with friends, family and coworkers around the world is starting to seem more than a decade away.
And on top of all that, Apple looks like it may have a serious entrant into this market and might easily beat Meta to the finish line to the next computing platform.
There was an arstechnica article about Carmack giving a speech about the state of VR.
Apparently he was dismissive of some controversy regarding avatar details. And was disappointed that they weren't yet at the stage where they could hold "arena-scale support with thousands of avatars milling around".
Who wants that? I don't want to put on a headset to sit in the nose bleeds of some virtual world with Zuck or Carmack ... that only seems to appeal to: 1. Developers making the cool thing work. 2. The person on stage talking who gets to just put on a headset to appear before thousands of people.
That's it.... who are these efforts all for?
But it makes sense when you realize that VR is inherently isolating and is hard to use collaboratively/socially. This is a bug for many applications and a feature for porn.
A concert in VR has none of the natural limitations of a concert in the real world. Every member of the VR audience should be able to watch the concert from any location. Everywhere from on stage with the band to it just in a window in SIMD other virtual space so it can just play in the background while doing something else.
Even "stage" is a silly concept in VR, the concert could take place in a Star filled nebula or the halls of Moria. A concert in VR could look like a music video of a band playing in some crazy location in impossible costumes.
VR clients should also be able to control what they see. Watching that VR concert they should be able to enable or disable whatever elements that they want. They should be able to change a parameter and shift the concert venue to some other motif or disable the rest of the crowd to have a private show.
Instead of any of that Meta is just building nosebleeds thinking people are interested in having those physical limitations. If VR doesn't enable experiences that would be impossible in the real world then it's just a shitty lower fidelity version of the real world. Zuckerberg can go surf on his private beach in Hawai'i whenever he wants. Everyone in VR should have the same luxury of a private beach, dwarves forge, or a space station orbiting Jupiter. Meta is building VR where users are just as excluded from private beaches as they are from Zuckerberg's private beach. No one wants to be as poor in VR as they are in the real world.
And yeah the gaming case is already pretty compelling when you look at things like Alyx, so just imagine more of that plus AR games that don't take you out of the real world.
At the end of the day you are talking about a display technology that can produce anything from an animated chess set on your kitchen table to the closest thing I will ever see to a Holodeck in my lifetime. In my mind computing will absolutely make the move from little pieces of glass in our pocket to AR, I just think it's going to take 10 to 20 years for moore law and miniaturization to do their thing.
They are not substitutes for the real thing they are substitutes for a 2D version that is usually pretty non-compelling.
The real limitation is that the lack of tactile feedback means that you are at most a spectator/voyeur in these experiences.
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Investors will not tolerate years of huge losses, Zuck will probably lose his job
Google should bring back Cardboard. Even with crappy quality, people will try it out for $10.
Of course, those are mostly their successes. They had stumbles too, no doubt.
If there's one thing Apple excels at, its convincing the mass market to adopt technologies that currently only cater to a niche audience. I have no idea what their plans for VR are, but I do imagine if they do something in it they'll make some waves. But maybe it'll turn out like the Newton. Maybe they will never launch a VR product. Who knows.
In the early days no one wanted computers either.
This is all about where the ball is going to be tomorrow, not where it is today.
I personally like to sit back and watch random "experiences," virtual tours and stuff and when I introduce someone new to VR I show them these first rather than games. Complete immersion without having to think about what to do with your hands.
Another interesting experience is Liminal https://liminalvr.com/ It uses sounds/visual stimulation with the intent of affecting your "mood" and it's being developed by bona fide psychological researchers. It's truly something that can only exist in VR!
That's a bit more than a niche.
But the VR excitement pool has been poisoned by Meta’s image and a decade of overpromise.
Where would VR even be if Zuck hadn't bet facebook on it? I'm not sure it'd be getting the attention it is, the hardware isn't ready, the software isn't ready and frankly users aren't ready.
Cardboard -> Note 4 with Gear VR -> S8+ with newer Gear VR -> Oculus Rift CV1 -> Oculus Quest 2 -> Selling my Quest 2 (and CV1) because Facebook (temporarily) made Facebook accounts mandatory to use it.
I doubt I'll ever purchase another VR headset from them in the future.
Cardboard blew my mind at the time, I was so excited to get a taste of VR.
I'll probably buy a Valve Index 2 if it ever happens.
Portable VR is highly limited by battery power. VR requires high pixel counts and high framerates to be immersive, and pushing that many pixels uses a lot of power.
It looks like it's similar to Cisco's telepresence.
https://sea.mashable.com/tech-1/20432/60-of-entire-gaming-ma...
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Meta is hellbent on creating a platform so they can be the iOS/App Store instead of just an app.
The stock is sliding because we're entering/in a phase where raising money is hard and cash is king. Companies are trying to pull back on investments and bets that might or might not pay off. Meta just told Wallstreet that it doesn't plan to pull back on Metaverse spending in 2023.
But I can see GenZ or the generation after GenZ embrace VR/AR. It doesn't have to be wearing a headset. It could be glasses when you're not wearing VR. It could be your phone when you're not wearing VR.
Yeah, when things were booming no one cared about their class C shares that left control of these massive corporations in few hands. STONKS!
I sense that will change.
On one hand there’s the hardware. Even now, people report motion sickness with the hardware. If you are trying to create a computing interaction medium of the future, these details around accessibility are going to be incredibly important. And I haven’t even mentioned battery life. So meta is working away at this very expensive challenge
The second challenge is the interaction model. No one is entirely convinced yet of what interaction with computers should look like in VR. Right now it’s “mouse/touch+windows but in VR. That’s like when TV and cameras first happened and it was theater shows but on the tv screen. So Meta now has to invent or at least shepherd computing integration models and that is also incredibly expensive.
And finally there is the metaverse. Technically we all live in the metaverse already. I interact with people I don’t know across forums and social media. I interact with them more than I do with some of the people I know in real life. I play games online which have meta worlds (Minecraft, temtem, and animal crossing for example). I may not have a single game of infinite worlds and meeting places but the concept of a universe within my existing world already exists and it’s served to me by the internet. But Meta wants to make it a ready player one kind of experience where I interact with it through a VR experience. That seems really forced because they are drawing a line in the ground saying that VR is how the metaverse can exist. This is also an expensive bet especially when the interaction model hasn’t been figured out yet.
I don’t know where this is heading for meta but their goal of creating the next big computing and interaction platform with app stores that they control instead of apple or google is incredibly ambitious but seemingly poorly executed thus far.
> And finally there is the metaverse. Technically we all live in the metaverse already. I interact with people I don’t know across forums and social media.
Meta properties are already a huge share of this activity. Think FB, Instagram, WhatsApp, …
They just need to show the ROI vs buying multiple monitors, maybe put out some studies showing their VR meetings are more effective than Zoom, show the productivity boost of being able to use VR to tune out distractions in open offices. Get enterprise customers to buy fleets of VR for their employees and then launch some sort of SaaS marketplace for Meta devices and take a cut. Facebook now has their app platform they've wanted
Zuck's focus on social is what's ruining it, plus just the optics of him. He needs to disappear for awhile
Resolution aside, going with virtual monitors also just shows how primitive the whole thing still is. From a 'workspace in VR' I would expect to get actual window management and UI elements in full 3D space, not just my 2D monitor projected to a virtual rectangle. Microsoft's WMR Portal had that five years ago (not without faults), Meta's attempt feels quite primitive and basic in comparison.
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This very much reminds me of Apple's Newton. It was actually quite amazing given the technical constraints imposed on making something to be shipped in volume, but not only was it underpowered for what it tried to be, the "killer app" for mobile devices would turn out to be wireless internet connectivity, and the world simply wasn't ready for that yet.
Apple started Newton development in 1987, killed it in 1997 when Jobs returned, and launched iPhone in 2007, arguably the biggest consumer product hit in history.
I'm rooting for Meta's demise, but history shows that it's quite possible for a company to try something, fail spectacularly, but come back and get it right when the universe catches up to the ambition.
Then again, Palm launched their first device in 1996, and had a big hit. But by the end of 2011, they were done. There are no guarantees that the company creating a market will be the one to profit from it.
I think that's a dangerous way to frame it. It's certainly the narrative Facebook wants out there.
Apple provided their users with more control over how their data is shared and those users overwhelmingly said no to Facebook and Google tracking them.
Uh... what?
Ah yes, those perfectly efficient markets, where everyone is doing DCF analysis.
Feels a little silly to be talking about things being "priced in" when a trillion-dollar-company loses a quarter of its market cap in 24 hours, no?
I don't want fb tracking me roleplaying as a catgirl or doing some other degenerate activity with my 3D avatar and "accidentally" leaking data to advertisers or worse, family and friends.
With their track record, Facebook is the last company I'll trust with my data. No wonder they had no issue rebranding with such a lousy reputation.
Immediately was prompted to create a Meta account and no longer had access to all the games I had purchased or installed years prior.
Tossed it right back in the bin it had been collecting dust in, which will likely change to the trash fairly soon.
To be ignored or laughed at is, in a traditional SV company's mind, simply stage 1 or 2 of the plan, and if stage 4 never happens it's because they were "ahead of their time" or something, never can it be that the idea is fucking stupid.
"They laughed at Columbus, they laughed at Fulton, they laughed at the Wright brothers. But they also laughed at Bozo the Clown." -- Carl Sagan
The vast majority of things that are ignored, laughed at, or fought, go on to lose.