Facebook: Why Zuckerberg is back to videos

Not that long ago, three months to be exact, Mark Zuckerberg introduced the next big thing: the Metaverse. And you could have guessed back then that there was something funny about it. How visionary is someone who, as an avatar in the virtual world, could be anything – a pan-galactic Gargle Blaster, the Patrician of Ankh-Morpork, or a seven-headed serpent – but simply choose an image of himself for the new world, including hairstyle and clothes? Now, there’s nothing wrong with Zuckerberg’s hair and clothes; it still seemed a bit like the Meta didn’t know exactly what to do with the Metaverse.

Now Zuckerberg had to deal with something very concrete last week: On Thursday, the Meta share price collapsed by 27 percent, the market value fell by $ 240 billion – it was the largest loss for a single company in stock market history. The reason: For the first time in the company’s history, the number of users of the Meta subsidiary Facebook fell. Has the company passed its peak? At least it could be symbolic of a larger development. Therefore, many expected a reaction from Zuckerberg. There was, but it wasn’t very visionary. The message to employees was: focus on video.

He said so in a so-called “All Hands Virtual Meeting” on Meta Platforms. This means that numerous employees were allowed to participate and there was a 100 percent chance that what was said there would leak out. The result: Zuckerberg wants his company to take care of so-called reels. This is the short video offering that is so similar to social media competitor Tiktok that many users simply copy their Tiktok videos to Reels. Also, back in 2016, back when it was still called Facebook, didn’t Meta tout short videos as the future?

A strategy that didn’t really work out at the time

In 2022, that sounds pretty unimaginative and like the past, especially since the strategy didn’t really work out back then either. At the time, Facebook manager Nicola Mendelsohn said videos were more suitable than text for quickly absorbing information: “If I had to bet, I’d bet on video, video, video.” That sounded logical at the time, video had also killed the radio star a few decades earlier, now it should be the turn of text entries on social media. Short videos were very popular back then, but the six-second video portal Vine, which once had more than 200 million active users, went out of business in January 2017.

Short videos are still popular, as shown by the success of Tiktok (more than a billion active users) and Snapchat (319 million, the Snap group recently reported the first profitable quarter in its history with a profit of $22.6 million) – only : Texts and images have not disappeared since then, and for one simple reason: videos require more attention, texts and images can be consumed on the side and are therefore, for example, in second-screen viewing, i.e. when you look at your cell phone while the TV is on, still in great demand.

Facebook’s video strategy was only moderately successful, as can be seen, for example, from the fact that the company had agreed on a settlement after a lawsuit alleging that it had embellished the statistics for advertising viewed before videos. It had to pay $40 million to advertisers. After this disastrous quarter, why is Zuckerberg still going for video?

Zuckerberg, a savvy businessman

It could be because Zuckerberg is a savvy businessman: Meta is pending a lawsuit from the Federal Trade Commission (FTC). Just two weeks ago, federal judge James Boasberg allowed the lawsuit because the agency had succeeded in declaring that “Facebook not only possesses monopoly power, but is willing to knowingly consolidate that power through anti-competitive conduct.” The aim of the lawsuit is to separate Instagram and Whatsapp services from Facebook, and one way to prevent this is to answer the question: What about Tiktok?

The lawsuit describes the market at issue as “personal social networks”; Tiktok as “service for sending and consuming content”. The Chinese platform is deliberately not mentioned as a competitor because the meta platforms are about personal relationships, while Tiktok is about sharing content with people you don’t necessarily know. This difference is significant because: If Zuckerberg relies on Reels, which are a Tiktok twin, he can say that Tiktok is indeed a competitor, especially one from China, against which his company must be protected. A split would weaken Meta, and it really cannot be in the interest of a US authority to leave the field to the Chinese competitor. That’s the calculation.

It may not be visionary what Zuckerberg is asking of his employees. It could, however, prove to be a smart move by a smart boss.


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