Investors are wary about Zuckerberg's plans to spend more on the metaverse

Zuckerberg's grandiose Metaverse goals are falling short due to low revenue profits and dwindling user numbers

Mark Zuckerberg, the founder of Facebook, gestures to the audience at the APEC (Asia-Pacific Economic Cooperation) Ceo Summit in Lima, Peru, on November 19, 2016. REUTERS PHOTO

Mark Zuckerberg revealed his desire to go all-in on the Metaverse while it becomes more expensive over time in October of last year. Following a drop in Meta's stock price, CEO and Facebook founder Mark Zuckerberg announced that he will "lower the pace of certain of our initiatives."

Meta's profits fell by 21% to $7.5 billion from the previous year, while revenue grew at the slowest rate in the company's history, rising only 7% to $27.9 billion. The company's anticipated expense range for 2022 has been reduced by $3 billion.

According to The Verge, Zuckerberg is working on metaverse software and hardware, while Meta's division Reality Labs is producing the Quest VR headset and future AR glasses. The division employs 17,000 people and reported a $3 billion loss in the most recent quarter. In the face of diminishing profits, the company's ambitious creative advancements are making investors uneasy.

Meta's stock has already dropped over 50%, prompting Zuckerberg to confess that he spent $10 billion on Reality Labs that year alone, which did not produce the promised outcomes.

Furthermore, Facebook's ad revenue is fast declining as users migrate to other platforms such as TikTok and companies like as Apple implement ad tracking modification policies.

Apple's app tracking function, according to Meta, lost the business $10 billion in revenue. Facebook recorded a 4% rise in users in the latest quarter, while the combined users of Facebook, Instagram, and WhatsApp increased from 2.82 billion to 2.87 billion.

"Meta's ad business continues to confront some very genuine issues," says Jasmine Enberg, principal analyst at Insider Intelligence. Of course, Facebook has faced challenges before, but the iOS changes are the first direct danger to its ad business. When you add in the rise of TikTok, brand safety concerns, and a shift in social media, you have a recipe for disaster.

Zuckerberg recently introduced Reels, a short-form video product that is a copy of TikTok, which accounts for 20% of Instagram time spent and is leveraging the feature to serve advertisements. Facebook is also unveiling Horizon, a social platform, and Cambria, a virtual reality headset.