- Facebook reportedly plans to rebrand itself to grow beyond its social media image.
- The company is spending heavily to build a “Metaverse” and give the best of both the virtual and digital world experience to millions of users on its platform globally.
- Despite constant controversies, the Facebook stock grew by a modest 27% YTD.
The first nine months of 2021 have been difficult for Facebook, marred by relentless hurdles that seemed almost unassailable. And as the year draws to an end, it is perhaps a time of reflection and learning for Facebook and preparing for a new year bereft of controversies.
The company had been tainted by controversies in 2021. It kicked off the year under the shadow of a 2017 row over Russian agents' alleged misuse of its platform to influence the US elections. Similar concerns had emerged during President Biden’s inauguration.
Facebook also has been accused of doing little in addressing concerns like data privacy or proper oversight to prevent misuse of the platform for political gains, polarizations, and spreading biases, misinformation, or hate content by some unscrupulous social media users.
What’s in store for Facebook in 2022 after a year of hurdles?
However, Facebook has rejected most of the allegations. The company also has been under scrutiny by the US Federal Trade Commission over its recent acquisitions of companies considered anti-competitive. In Europe, regulators raised questions over data privacy issues.
As a result, the company faced the ire of some sections of society. People ran anti-Facebook campaigns and called for ad boycotts on its platform.
Remarkably, Facebook managed to steer clear of most of the troubles. Then, in mid-summer, Facebook CEO Mark Zuckerberg gave a fresh push to its ambitious Metaverse project. He revealed a broad outline of the project and the company’s plans in the coming years.
Fast forward to October, Facebook is reportedly planning to rename itself as the search giant Google did some years ago to become a subsidiary of its holding company Alphabet Inc. Facebook perhaps is contemplating a similar move – a parent firm to oversee the subsidiaries.
Despite challenges, the Facebook stock returned 27% profit YTD. On Wednesday, it was slightly up at 0.16% to US$340.52 at 12:49 pm ET. Facebook’s current market cap is US$964.5 billion.
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Allegations against Facebook
Early this month, whistleblower Frances Haugen, a former Facebook employee, alleged Facebook is more interested in earning profits than addressing the issues raised. She alleged the company was aware of hate speech and fake news on its platform, yet it ignored them.
At a Senate congressional hearing, she claimed that the platform was used to plan the Capitol Hill riots on January 6.
In addition, Wall Street Journal ran a series of articles concerning its photo-sharing platform Instagram's negative impact on teenage girls' mental health, for instance, creating suicidal thoughts. The damning reports might have soiled its image as a children-friendly platform.
Haugen also shared documents at the hearing about how Facebook might have undermined the issue of hate speech dissemination that might have led to violence.
Antitrust Lawsuit against Facebook
In August, the Federal Trade Commission (FTC) had filed a fresh antitrust lawsuit against the company, alleging it suppressed competition by acquiring potential competitors like WhatsApp and Instagram. It sought to unravel the motive behind those purchases. In response, Facebook filed a motion to dismiss the lawsuit, claiming no evidence against the charges.
Facebook also faced data breach allegations of some 533 million account holders from 106 countries, mainly in the US, the UK and India. The leaked personal data included the full names, phone numbers, Facebook IDs, location, birth date, e-mail addresses, etc.
On Wednesday, media reports claimed that Facebook is planning to change its name, and a formal announcement might come as early as next week. In addition, the reports claimed the social media company is considering rebranding itself into a Metaverse company.
It is likely that a parent company would hold the rights over the Facebook app, WhatsApp, Instagram, and Oculus. Thus, the idea is to transform itself into a metaverse company. Facebook recently announced hiring 10000 technology professionals in Europe for the Metaverse project - a virtual, augmented reality in which users can live, play, and work.
Finally, the question is whether it will its troubles will follow into the new year. All eyes would be on the world's largest social media company brimming with high hopes for the future. Industry observers, however, are optimistic about its long-term vision for a Metaverse.