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1 Nov, 2022
1 min time to read

When we say "Big Tech" we usually mean five companies: Amazon, Apple, Microsoft, Meta, and Google. Vice believes, one of them may soon drop out of this list.

According to Vice's analysts Facebook, which was once a dominant monopoly in the online advertising market, is

on the precipice of dropping out of this group through years of sheer mismanagement, a failure to innovate, setting money on fire in pursuit of a metaverse that seemingly no one wants, a vulnerable business model that Apple is squarely taking aim at, and upstart competitors like TikTok.

What previously seemed impossible is happening right now — Facebook may become just another tech company, more or less. In a little over one year, the company has lost nearly $800 billion of its market capitalization, with the lion's share of that coming these past eight months.

Many investors have become increasingly worried of the company's plans to focus on the metaverse, with Reality Labs, Facebook's metaverse fantasy team, burning through $4.5 billion in 2019, $6.62 billion in 2020, and $10.19 billion in 2021.

In a February 2022 earnings call, Meta's CFO David Wehner said those operating losses would "increase meaningfully" this year, as the company spent another $9.4 billion in the last three quarters, bringing Reality Labs’ operating losses to north of $31 billion. This created great downward pressure on the Meta's stock, which has fallen about 70 percent this year.

Vice, however, believes Metaverse is just one problem, as there are fundamental issues plaguing the company's core advertising business, with Apple's last year iOS privacy policy update being a major one.