FACEBOOK’S 2022 $34BN SPENDING SPREE WILL INCLUDE SERVERS, AI, AND DATA CENTERS
First, Facebook changed to Metaverse and now it is expected to spend $34Bn in 2022.
Facebook recently changed to Metaverse and more. It is all over the news that the parent company of Facebook, Instagram, and WhatsApp is now known as Meta. The name was changed to represent the company’s interest in the Metaverse.
Metaverse is a virtual world where similar activities can be carried out like on Earth. The activities carried out in Metaverse will also have a permanent effect in the real world. There are several companies from different types of industries who are going to take part in building a Metaverse. Every company will have its own version of Metaverse.
Various types of activities can be carried out like meeting with friends, shopping, buying houses, building houses, etc.
As in this real world, Earth, different country has a different type of currency for buying and trading, similarly, in the virtual world, Metaverse also needs a currency for transactions. For buying and trading in Metaverse, cryptocurrency will be required for the blockchain database. It also allows Non-Fungible Tokens as an asset.
To access the Metaverse, special devices are required such as AR and VR which will be able to access a smartphone, laptop or computer support the AR or VR device. Facebook has partnered with five research facilities around the world to guide AR/VR technology into the future. Facebook has its 10,000 employees working in Reality Labs.
Oculus is a brand in Meta Platforms that produces virtual reality headsets. Oculus was founded in 2012 and in 2014, Facebook acquired Oculus. Initially, Facebook partnered with Samsung and produced Gear VR for smartphones then produced Rift headsets for the first consumer version and in 2017, produced a standalone mobile headset Oculus Go with Xiaomi.
As Facebook changed its name to Meta, it is announced that the Oculus brand will phase out in 2022. Every hardware product which is marketed under Facebook will be named under Meta and all the future devices as well.
Oculus store name will also change to Quest Store. People are often confused about logging into their Quest account which will now be taken care of and new ways of logging into Quest account will be introduced. Immersive platforms related to Oculus will also be brought under the Horizon brand. Recently, there is only one product available from the Oculus brand, Oculus Quest 2. In 2018, Facebook took ownership of Oculus and included it in Facebook Portal. In 2019, Facebook update Oculus Go with high-end successor Oculus Quest and also a revised Oculus Rift S, manufactured by Lenovo.
Ray-Ban has also connected with Facebook Reality Labs to introduce Ray-Ban Stories. It is a collaboration between Facebook and EssilorLuxotica, having two cameras, a microphone, a touchpad, and open ear speakers.
Facebook has also launched a Facebook University (FBU) which will provide a paid immersive internship; classes will start in 2022.This will help students from underrepresented communities to interact with Facebook’s people, products, and services. It has three different types of groups:
FBU for Engineering
FBU for Analytics
FBU for Product Design
Through the coming year 2022, Facebook plans to provide $1 billion to the creators for their effort in creating content under the various platforms on brands of parent company Meta Company, previously known as Facebook. The platform includes Instagram’s IGTV videos, live streams, reels, posts, etc. The content could include ads by the user. Meta (formerly, Facebook) will give bonuses to the content creators after they have reached a tipping milestone. This step was taken to provide the best platform to content creators who want to make a living out of creating content.
Just like TikTok, YouTube, Snapchat, Meta are also planning to give an income to content creators posting content after reaching a certain milestone.
Facebook also has a Facebook Connect application where it allows to interact with other websites through their Facebook account. It is a single sign-on application that lets the user skip filling in information by themselves and instead lets Facebook Connect fill out names, profile pictures on behalf of them. It also shows which friend from the friend’s list has also accessed the website through Facebook Connect.
Facebook decides to spend $34Bn in 2022 but how and why?
Facebook had a capital expenditure of $19bn this year and it is expected to have a capital expenditure of $29bn to $34bn in 2022. According to David Wehner, the financial increase is due to investments in data centers, servers, and network infrastructure, and office facilities even with remote staff in the company. The expenditure is also due to investing in AI and machine learning capabilities to improve rankings and recommendations of their products and their features like feed and video and to improve the performance of ads and suggest relevant posts and articles.
As Facebook wants AR/VR to be easily accessible and update its feature for future convenience, Facebook is estimated to spend $10bn this and thus it is expected to get higher in this department in the coming years.
In Facebook’s Q3 earnings call, they have mentioned they are planning more towards their Facebook Reality Labs, the company’s XR, and towards their Metaverse division for FRL research, Oculus, and much more.
Other expenses will also include Facebook Portal products, non-advertising activities.
Facebook has launched project Aria, where it is expected to render devices more human in design and interactivity. The project is a research device that will be similar to wearing glasses or spectacles having 3D live map spaces which would be necessary for future AR devices. Sensors in this project device will be able to capture users’ video and audio and also their eye-tracking and their location information, according to Facebook.
The glasses will be capable to work as close to computer power which will enable to maintain privacy by encrypting information, storing uploading data to help the researchers better understand the relation, communication between device and human to provide a better-coordinated device. This device will also keep track of changes made by you, analyze and understand your activities to provide a better service based on the user’s unique set of information.
It requires 3D Maps or LiveMaps, to effectively understand the surroundings of different users.
Every company preparing a budget for the coming year sets an estimated limit for expenditures. This helps in eliminating unnecessary expenses in the coming year. There are some regular expenditures that happen every for same purposes, recurring expenditures like rent, electricity, maintenance, etc. and also there is an estimation of expenses that are expected to occur in case of an introducing new project for the company, whether the company wants to expand in locations or wants to acquire already established companies. As the number of users in a company increases, the company had to increase its capacity of employees, equipment, storage drives and disks, computers, servers, network connection lines, security, storage capacity.
Not to forget that accounts need to be handled to avoid complications. The company needs to provide uninterrupted service. The company needs lawyers to look after the legal matters of the company and from the government.
Companies will also need to advertise their products showing how will it be helpful and how will it make the user’s life easier, which also is a different market.
That being said, Facebook has come up with varieties of changes in the company. Facebook is almost going to change even how users access Facebook. Along with that Facebook is stepping into Metaverse for which they will hire new employees, AI to provide continuous service.