Meta Platforms
FB
is planning to introduce virtual coins, tokens and lending services to its apps as the company is trying to diversify away from primarily relying on advertising revenues.
Meta’s primary income source is the advertising revenues from its social media sites, Facebook and Instagram. The company has garnered advertising revenues of $32.64 billion in the fourth quarter of 2021, which represent 96.9% of its total revenues in the reported quarter. Revenues from advertising increased 20.1% year over year.
However, Meta’s ad-based business model is under constant threat from the ongoing Russia-Ukraine war and increasing scrutiny by different governments as they are dropping legislations and ultimatums on the company to change their business policies.
In the year-to-date period, Meta, currently carrying a Zacks Rank #4 (Sell), saw its shares tumble 33.7% compared with the Zacks
Internet – Software
industry’s and the Zacks
Computer and Technology
sector’s declines of 31.5% and 13.6%, respectively. You can see
the complete list of today’s Zacks #1 Rank stocks here
.
Meta Platforms, Inc. Price and Consensus
Meta Platforms, Inc. price-consensus-chart
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Meta Platforms, Inc. Quote
In accordance with Mark Zuckerberg’s bold plan to introduce the metaverse to the world, the company’s financial arm, Meta financial technologies, is exploring the idea of creating a virtual currency for the metaverse. Company insiders have dubbed the virtual currency as “Zuck Bucks”, per Financial Times.
Meta’s new plans to launch a virtual currency are very different from its failed project, the Diem stable coin, and the dream of creating its own cryptocurrency. The new virtual currency is not going to be a cryptocurrency made using the blockchain technology, but will rather be an in-app token centrally controlled by the company, much like those used in games like Roblox.
Meta is working on creating social tokens or reputation tokens to be issued as rewards for meaningful contributions in Facebook groups. Also, the company is expected to be working on creating “creator coins” specifically for influencers on its photo-sharing app, Instagram.
This does not come as a complete surprise as the company is trying to create its own virtual currency and Instagram is actively exploring non-fungible tokens (NFTs) and ways to make them more accessible to a wider audience.
Instagram has previously hosted a panel for NFT creators in a bid to attract talent to its business. Instagram is developing its platform to support NFT trading in order to generate significant revenues from the fastest-growing asset in the cryptocurrency industry.
Meta is trying to evolve its social media and chatting sites as NFT and cryptocurrency trading marketplaces that will retain and attract customers amidst stiff competition from other big tech giants. However the greater goal is to use blockchain and create a more decentralized system across its platforms riding the Web3 movement.
Other Major Players in the Metaverse
Meta is not the only company to claim its stake in the virtual reality space, aka the metaverse.
Microsoft
MSFT
is looking to explore the NFT space, which is experiencing massive growth since the beginning of 2021.
Microsoft’s M12 venture fund recently invested in NFT startup, Palm NFT Studio. The company has raised a total of $27 million that will be utilized to develop projects on the Palm Protocol, an energy-efficient Ethereum sidechain.
NVIDIA
‘s
NVDA
best-in-class graphics rending chips will undoubtedly be a core component of Meta’s Oculus visual functionality in the metaverse.
NVIDIA is also gaining a decent market share among gaming service providers. Its strong line-up of advanced graphics cards has made it a favorite graphics card provider and is expected to help the company enter the metaverse’s gaming world.
Meta is facing stiff competition from social media peer,
Twitter
TWTR
. Twitter has launched a tool that allows users to showcase NFTs as their profile pictures. The new tool designed by Twitter connects users’ Twitter accounts with their crypto wallets holding the NFTs.
Twitter is exploring the crypto universe and supporting NFT trading. Artists can use the platform to connect their crypto wallets and take payments directly through Twitter. They can also take tips in cryptocurrencies like Bitcoin, Ethereum or through crypto wallet apps.
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