Re: Damodaran breakeven revenue model

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Just the other day I was asking what was the ROI of the very large investment Facebook made into the new business called "the metaverse"? Not only did they invest billions, tens of billions, they even changed the whole name of the popular company! So far, no real answers to that question, but the market cap sure has gone up since those very large investments.

They apparently have burned nearly $70B on this... imagine if they had invested that in AI back in 2021 instead...

Note: If they have invested $70B since 2021 (5 years) that is $14B annually, 30% cut would take that down to around $10B - still a lot of capital.

Financial Times: Content D8e798a8 65db 44f1 8490 035b50303ee3

Meta has set out plans to meaningfully cut back its metaverse efforts next year, as chief executive Mark Zuckerberg narrows his focus on winning the artificial intelligence race.

Executives at the $1.7tn social media company have discussed potential budget cuts as high as 30 per cent for its metaverse group, which will probably include job losses starting early next year.

...

Zuckerberg in 2021 announced a push to build an avatar-filled “metaverse” where users globally could socialise, game and shop in virtual spaces, going as far as to rebrand the company from Facebook to Meta.

However, that effort has been hampered by technical difficulties, safety concerns and a lack of consumer appetite, prompting some investors to pressure Zuckerberg to curb spending. The Reality Labs division has lost more than $70bn since 2021.

tecmo
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