Digital Legacies: Rebranding

After the multiverse theory, where multiple universes coexist at least in theoretical physics, Facebook has now released a glimpse of its metaverse, and renamed the holding company of Facebook, Instagram, and WhatsApp as Meta. The star type designer, Eric Spiekermann, was the first one to complain because he named his company Meta Design 42 years ago, in 1979, and flushed his anger on his Twitter account. According to the dictionary Merriam Webster, meta means “showing or suggesting an explicit awareness of itself or oneself as a member of its category: cleverly self-referential”. Big companies tend to rebrand either to escape from a big problem (such as fraud or risk of regulatory sanctions) or to distract attention from the current scandals. Facebook is facing both at a gigantic scale. Google has created Alphabet because, among other reasons, the company had too many divisions and just one really making profit. And governments started to eye Google to be divided. Arthur Andersen rebranded itself as Accenture after the Enron scandal in 2001. It was a question of survival. Science fiction author, Neal Stephenson, the creator of the term also declared on his Twitter that “there is a growing confusion about this: I have nothing to do with anything FB wants to include metaverse, except for the obvious fact that they used a term I made up in Snow Crash.”

Even though Facebook alleged that their companies would remain with the same products and the same mission, it took just a couple of hours for the announcements to start pouring in. CTO-in-waiting, Andrew Bosworth, was the first to announce that Facebook’s virtual reality device, Oculus, would be killed off. He said, “We all have a strong attachment to the Oculus brand, and this was a very difficult decision to make. While we are retiring the name, I can assure you that the original Oculus vision remains deeply embedded in how Meta will continue to drive mass adoption for VR today.” Both consultation and expansion processes in the companies require tough decisions to be made, and we should not underestimate the challenges of companies that have tens of thousands of employees and start baking serious money, as well as paying dividends to shareholders. After the first years of crazy growth, these VC led companies, that are now public, are under constant scrutiny and regulatory pressure.

Virtual worlds are certainly becoming more interesting and seem to represent indeed a type of life that is becoming closer to real one. Virtual and real are definitely getting closer. But this is actually not new at all. Second Life had started it on larger scale in 2003, had its hype, and is now virtually dead. In an interview with VICE News, Ebbe Altberg, the CEO of Linden Lab, Second Life’s holding company, stated that the platform has currently about 900,000 active users. It is cute, but small. Minecraft, another virtual-like world has around 140 million active users. What has thrived in terms of virtual lives has been games. These are the people who know how to do it until now, and looking at them seems smart, especially because they have linked it with entertainment.

Facebook will have access to a much wider audience when they start to release Meta as a stable platform to play with. With about 90,000 players playing GTA Online on Steam in March this year, at one time, the thriving game community showed the power of virtual worlds. If you consider this is just one out of five possible platforms you can play on (PC, PS4, Xbox One, Xbox 360, PS3), GTA is aiming for virtual lives, but will take time. Maybe, Facebook’s strategy is more about creating an environment where other people can thrive, and with that, they will be able to do smart purchases in the future, because ultimately, they control the data of users. It is the task of the CEO, more often than not, the founder, to give people bitter and surprising news that sounds inspiring, saying that “to reflect who we are and what we hope to build, I am proud to announce that starting today, our company is now Meta. Our mission remains the same — it’s still about bringing people together. Our apps and our brands — they are not changing either,” Zuckerberg declared. We must wait and see what comes next. But there is nothing really incredible so far.

Facebook’s stock price has grown about 20 per cent so far this year. Not bad for a company that is facing crisis after crisis in many fronts, from enabling fake news to make money and harassment online, to data privacy suspicious practices. The moment of release of this new venture sounds and looks very opportunistic. Facebook is currently fighting a number of battles regarding its privacy policy and also its permissive culture for fake news. The fight will go on, but they need to give the market and the audience some good news. With almost four billion active accounts, equivalent to about half of the planet’s population, the platform announced in July this year a net profit of nearly $30 billion, allowing them to do virtually anything they want to change their image. The company will probably soon achieve the small club of companies above 1 trillion valuation.

Facebook is here just a metaphor for the challenges ahead of the dialogue that need to be generated between companies with incredible power and consumers that see these platforms as the best way to communicate and sometimes make their living. There is no such a thing as a free lunch. Definitely not. Many platforms want to connect people. Airbnb also says that. That will always be the superficial declaration of CEOs that actually have nothing else to say. But I think it’s wise to observe other things that are not sad, when they are conflated with the movements that those companies do. There is an urge for transparency in a world where companies are governed more by corporations than the state.

The digital world thrives very often on environments that are not regulated. When a disruptor is smart enough to create a new category of business, it will allow them to navigate the market for a long time without competition or regulatory burdens. And restrictions will come not from governments, but from the demands of users. This is where the real revolution is, in the user’s community. Having said that, it is important to be aware of the manoeuvres of rebranding, so that we are aware of possible outcomes that can make things for better or for worse.

Read more from the series Digital Legacies where our columnist Julius Wiedemann investigates the many aspects of digital life.