While its Reality Labs unit continues hemorrhaging money, Meta is far from giving up on the metaverse, even as it pursues other less visionary projects that are more applicable to the consumers and businesses that use Meta’s family of apps.
During its first-quarter 2023 earnings call Wednesday (April 26), Meta CEO Mark Zuckerberg said the company “reached a milestone that now more than 3 billion people use at least one of our apps each day,” with Facebook hitting 200 million daily active users (DAUs) in the U.S. and Canada.
After defending the decision to lay off thousands, slow hiring, flatten its management structure, and dedicate more resources and jobs to technical work, Zuckerberg quickly turned to Meta’s efforts in artificial intelligence (AI) and yes — the metaverse — as the future of the company.
“We’re always focused on connection and expression,” he said, adding that “there’s an opportunity to introduce AI agents to billions of people in ways that will be useful and meaningful. We’re exploring chat experiences in WhatsApp and Messenger, visual creation tools for posts on Facebook and Instagram and ads, overtime video, and multimodal experiences as well.”
During his remarks, Zuckerberg mentioned AI bots several times, saying “I expect that a lot of interest in AI agents for business messaging and customer support will come once we nail that experience.”
In what sounded like a call for a truce or possible collaboration between the various companies, from OpenAI to Microsoft to Alphabet, doing innovative work in generative AI and large language models (LLMs), Zuckerberg said, “There’s an important opportunity in the industry to help create an open ecosystem. And if we can help be a part of this then much of the industry I think will standardize on using these open tools and help improve them further. This will make it easier for other companies to integrate with our products and platforms.”
Commenting on what at present is a fizzling proposition, Zuckerberg said, “A narrative has developed that we’re somehow moving away from focusing on the metaverse vision, so I just want to say up front that that’s not accurate. We’ve been focusing on both AI and the metaverse for years now, and we will continue to focus on both.”
He said progress in the metaverse and generative AI are connected in key ways, noting that “metaverse technologies will also help deliver AI. For example, embodying AI agents will take advantage of the deep investment that we’ve made in avatars over the last several years. Building the metaverse is a long-term project but the rationale for it remains the same and we remain committed to it.”
He supported those statements by noting that over one billion Meta avatars have now been created. The number of titles in the Quest store with at least $25 million in revenue has doubled since 2022, with over half of Quest DAUs spending more than an hour on their devices.
Zuckerberg added that “the next milestone is that we’re gearing up to launch our next generation consumer virtual and mixed reality device later this year,” about three years after Quest 2 was introduced, and stressed the new gear will debut “at a price point that will be accessible for lots of people.”
As for the performance of Reels, AI also factored into that, as Zuckerberg said, “Along with surfacing content from friends and family, now more than 20% of the content in your Facebook and Instagram feeds are recommended by AI from people, groups or accounts that you don’t follow. Across all of Instagram, that’s about 40% of the content that you see. Since we launched Reels, AI recommendations have driven a more than 24% increase in time spent on Instagram.”
He said Reels monetization efficiency “is up over 30% on Instagram and over 40% on Facebook quarter over quarter,” adding that Meta’s automated and AI-driven Advantage+ Shopping Campaigns volume “is up 7x in the last six months.”
He also said the number of businesses using paid messaging on WhatsApp has grown by 40% quarter over quarter.
In terms of platform commerce, Meta CFO Susan Li noted that “the online commerce vertical is the largest contributor to year over year growth, followed by healthcare, and entertainment and media. Online commerce benefited from strong spend among advertisers in China reaching customers in other markets. However, other verticals remain challenged, with financial services and technology verticals being the largest negative contributors to year-over-year growth.”