#SocialStocks: Facebook Unveils Meta Name Change And New VR Products

TikToks can now be viewed on Amazon Fire TV, new iOS policy costs social media companies billions and other notable stories from this week. Welcome to “#SocialStocks,” The Fly’s weekly recap of Wall Street’s reactions to social media stock news.

ACROSS THE METAVERSE: 

Facebook (FB) announced a name to change to Meta, which it says brings together its apps and technologies under one new company brand. “Meta’s focus will be to bring the metaverse to life and help people connect, find communities and grow businesses,” the company said a statement. Facebook said that while its corporate structure is not changing, how it reports on financials will. Starting with its results for Q4, the company plans to report on two operating segments: Family of Apps and Reality Labs. Facebook intends to start trading under the new stock ticker (MVRS) on December 1. “Today’s announcement does not affect how we use or share data,” it added.

Piper Sandler analyst Thomas Champion views Facebook’s name change to Meta as “significant.” The move emphasizes the depth of the company’s commitment “to the AR/VR initiative and represents a big, bold and risky bet on the future,” Champion told investors in a research note. He calls this a “commendable ambition” but keeps a Neutral rating on the shares. The rebrand likely signals that CEO Mark Zuckerberg will focus on the emergent Reality Labs product and distance himself and the operation from the controversy around social, notes Champion. He believes “this makes tremendous sense.”

Facebook CEO Mark Zuckerberg said in a keynote speech that the metaverse “a ways off,” but building blocks starting to “take shape.” Says metaverse will come with avatars, which will be like profile pictures but with more “lifelike” and customizable characteristics. He said teleporting around metaverse will be similar to clicking a link on the web. He also said privacy and safety need to be built into metaverse from day one. Zuckerberg mentioned users will be able to bring things from the real world into the metaverse, such as books and video games. Other takeaways from the Facebook Connect event were that gaming is how many will step into the metaverse for the first time and that the company is “heavily” investing in building solid VR/AR infrastructure for metaverse. Facebook predicts that the metaverse will reach 1b people within the next 10 years. The social media giant also unveiled new VR products like a high-end VR headset codenamed Cambria and a new high-end set of AR glasses. There are also reports that Meta is working on a new line of smartwatches. Shares edged higher 2% following the new product announcements. 

Meta is acquiring VR experience startup Within, which is behind VR fitness service “Supernatural.” “Virtual reality and the metaverse bring us all the opportunity to connect and share experiences in meaningful and magical ways,” said Jason Rubin, VP of Play at Oculus. “Thousands of people have already used the power of virtual reality to build fitness routines with Supernatural, an immersive VR fitness service that aims to make your daily workout the highlight of your day. Look no further than Supernatural’s own Facebook Group where 20K+ members are supporting each other on a daily basis as they celebrate the newfound joy, acceptance, and fun that many say Supernatural and Quest have enabled in their lives. Like us, Supernatural, and their creators at Within, believe deeply in the power of the metaverse and VR to bring people together and empower positive change. Today, I’m happy to announce that Within (along with Supernatural) have entered into an agreement to join Meta. Supernatural will continue to be operated independently as part of Reality Labs, and will continue to create fitness, wellness, and social experiences in VR, helping people achieve their goals in the most joyful and connected way possible. We’re eager to help Within continue bringing joy, awe, and wonder to the Supernatural community, with more music, creative ways to workout, features, and social experiences. Together we will also explore ways we can enhance future hardware to support VR fitness apps, encouraging other developers to bring new fitness experiences to VR. We believe fitness will be a massive success in VR where multiple third-party fitness apps can succeed.” This transaction will be subject to customary closing conditions and regulatory approval. Financial terms of the deal were not disclosed.

The acquisition follows the announcement from Andrew Bosworth, VP of augmented and virtual reality at Facebook, saying the Oculus brand is going away starting in early 2022. Bosworth commented that: “VR will be the most immersive way for people to access the metaverse and as we look toward our goal of bringing 1B people into VR, we want to make it clear that Quest is a Meta product. For this reason, we’re simplifying our brand architecture and shifting away from the Oculus brand. Starting in early 2022, you’ll start to see the shift from Oculus Quest from Facebook to Meta Quest and Oculus App to Meta Quest App over time. We all have a strong attachment to the Oculus brand, and this was a very difficult decision to make. While we’re retiring the name, I can assure you that the original Oculus vision remains deeply embedded in how Meta will continue to drive mass adoption for VR today. We’ll also expand Meta Horizon as the brand that will encompass all of our first-party immersive social experiences. You’ve seen this already with Horizon Workrooms and Horizon Worlds. Soon you’ll see us shift from Oculus to Horizon Home, Horizon Venues, Horizon Friends, and Horizon Profile.”

TIKTOK TO THE BIG SCREEN: 

In a product update on its Amazon (AMZN) Fire TV blog, the company said “just ask, “Alexa, open TikTok. Fire TV customers can now watch TikTok videos on the biggest screen in their home. The TikTok TV app on Fire TV is now available exclusively on all Fire TV devices in the U.S. and Canada. From a Fire TV, viewrs can watch and discover all their favorite TikTok videos. Just ask, “Alexa, open TikTok.” “TikTok is a household staple in our home and I’m thrilled the whole family can now enjoy their favorite TikTok videos together on the best screen in the house with TikTok on Fire TV,” said Daniel Rausch, VP, Amazon Entertainment Devices and Services. “We love to pull up TikTok hands-free on our Fire TV Omni Series by just asking, ‘Alexa, play TikTok.’ We can’t wait to hear how our customers are enjoying the latest dance craze or viral trends with their families.”

AUDIO CLIP DEAL: 

Snapchat (SNAP) has reached an agreement with Comcast’s (CMCSA) NBCUniversal that will bring audio clips from movies and TV shows to the social media platform, The Hollywood Reporter’s J. Clara Chan reports. In addition to music, Snapchat users will now be able to add sound clips from popular media in NBCU’s catalog to their snaps, including shows like “The Office” and “Saturday Night Live” as well as films like “Bridesmaids” and “Back to the Future,” the author notes. “NBCUniversal has an iconic catalog and we know Snapchatters will love adding quotes from their favorite movies and series to their Snaps to help perfectly express the moment,” Ben Schwerin, Snap’s senior VP of content and partnerships, said. “NBC has been a tremendous and long-standing partner to Snap and we’re thrilled to continue to innovate together on new experiences for our community.” 

PINTEREST TV LAUNCH: 

In a Saturday blog post, Pinterest (PINS) announced the launch of Pinterest TV, a slate of live, original and shoppable creator shows. The company said, “Pinterest is a destination for people to watch, shop and try inspiring ideas in categories like food, beauty, home, and DIY. Through recent advancements with shopping and creator features, Pinners are engaging in more immersive formats and actionable entertainment than ever before. Today we’re announcing Pinterest TV, a series of live, original and shoppable episodes featuring creators right on Pinterest. Pinterest TV episodes are refreshed each weekday and will be recorded and available for Pinners to view on-demand, and save and rewatch later. Beginning November 8, episodes will air Monday-Friday at 3PM PDT / 6PM EDT in the U.S. on iOS and Android. Each Friday, products will drop in a live shopping setting where Pinners can take advantage of discounts from brands including Patagonia, All Birds, Crown Affair, Melody Ehsani, Outdoor Voices, Mented and more…Along with Pinterest TV, Pinterest is launching a virtual studio where Pinterest producers work directly with each creator to develop unique content, providing “backstage” A/V support, and go live with engaging episodes. Creators who’ve hosted Pinterest TV episodes during the pilot phase have substantially increased their following on the platform, with some creators more than doubling their followers after a live episode.”

PILOT ADVERTISING PROGRAM: 

Janine Pelosi, Zoom’s CMO, said in an earlier blog posting, that the company’s “mission is to deliver happiness by bringing people together. As the pandemic took hold in 2020, we experienced exponential growth, and our user base expanded from primarily enterprise users to include a large volume of individual users. Today, millions of users around the world continue to access Zoom’s products and services for free. And it is important to Zoom that we can continue to provide our products and services to our users, drive innovation, and add even more value. With this in mind, today we are excited to roll out a pilot advertising program that we expect will enable us to support investment and continue providing free Basic users with access to our robust platform. For this initial program, ads will be rolled out only on the browser page users see once they end their meeting. Only free Basic users in certain countries will see these ads if they join meetings that are hosted by other free Basic users.”

THE PRICE OF PRIVACY: 

Apple’s (AAPL) iOS App Tracking Transparency policy has cost Snap, Facebook, Twitter (TWTR) and YouTube (GOOGL) almost $10B in combined ad revenue in the second half of 2021, Financial Times’ Patrick McGee reported. Apple introduced its App Tracking Transparency policy in April, which forced apps to ask for permission before they tracked the behavior of users to serve them personalized ads. Most users have opted out, causing confusion for advertisers on how to target them. Reportedly, advertisers have in turn cut back their spending at Snap, Facebook, Twitter and YouTube and diverted their budgets elsewhere such as to Android phone users and to Apple’s ad business.

FACELESS: 

Jerome Pesenti, VP of Artificial Intelligence, said in a blog post: “We’re shutting down the Face Recognition system on Facebook. People who’ve opted in will no longer be automatically recognized in photos and videos and we will delete more than a billion people’s individual facial recognition templates. This change will also impact Automatic Alt Text, which creates image descriptions for blind and visually impaired people. After this change, AAT descriptions will no longer include the names of people recognized in photos but will function normally otherwise. We need to weigh the positive use cases for facial recognition against growing societal concerns, especially as regulators have yet to provide clear rules.” Pesenti added: “In the coming weeks, we will shut down the Face Recognition system on Facebook as part of a company-wide move to limit the use of facial recognition in our products. As part of this change, people who have opted in to our Face Recognition setting will no longer be automatically recognized in photos and videos, and we will delete the facial recognition template used to identify them… More than a third of Facebook’s daily active users have opted in to our Face Recognition setting and are able to be recognized, and its removal will result in the deletion of more than a billion people’s individual facial recognition templates.”

WHISTLEBLOWER CALLS FOR ZUCKERBERG’S JOB: 

Facebook CEO Mark Zuckerberg should step down from from his role at the company, said Frances Haugen, the former Facebook employee who leaked internal research, CNBC’s Lauren Feiner reported. “I think Facebook would be stronger with someone who was willing to focus on safety,” she said Monday at the Web Summit conference. However, Haugen did acknowledge that such a scenario would be improbable. “I think it is unlikely the company will change if he remains the CEO. And I hope that he can see that there is so much good that he could do in the world and maybe it’s a chance for someone else to maybe take the reins.”

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Originally Posted on November 3, 2021 – #SocialStocks: Facebook Unveils Meta Name Change And New VR Products