KUALA LUMPUR (Nov 3): Competition, miscalculations, and regulatory scrutiny have all but killed the advertising giant Facebook's dreams of diversifying its business and rolling up the digital world into its platform.

In a report on Oct 31, Canadian-American magazine Vice, which is focused on lifestyle, arts, culture, and news/politics, said the definition of success for many tech employees has been getting a job at a FAANG company (Facebook, Amazon, Apple, Netflix, Google). Amazon, Apple, Microsoft, Facebook, and Google, meanwhile, are often the five major companies people think of when they think of "big tech."

But it said there is evidence that Facebook — once a dominant monopoly rightly blamed for all sorts of societal ills — 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 that the company seemingly has no answer for.

The magazine said that what seemed impossible just a year or two ago — that Facebook will become just another tech company, more or less — now seems like a very real possibility.

It said that in a little over one year, Facebook has shed nearly US$800 billion of its market capitalisation, with the lion's share of that coming these past eight months.

It said to be clear, the company is one of the biggest tech firms in existence, with billions of people regularly using its products and a still growing user base, and yet, by the definition of one proposed antitrust bill, has sat below the market capitalisation of what counts as “Big Tech” for months.

The company’s pivot to the metaverse, complete with a name change (Meta Platforms Inc) and a PR campaign featuring chief executive Mark Zuckerberg’s sickly digital avatar, has resulted in it hemorrhaging money, while its core products — Facebook, Instagram, and WhatsApp — all seem to have very real vulnerabilities.

Reality Labs, Facebook's metaverse fantasy team, burned through US$4.5 billion in 2019, US$6.62 billion in 2020, and US$10.19 billion in 2021 (that’s over US$21 billion), said the magazine.

Vice said that by all indicators, the metaverse is a wasteland devoid of any souls save those who are too zealous or too well compensated to realize admit how stupid it is.

It said that for now, while Zuckerberg’s main contribution has been to add legs to his company’s avatars and ship out nausea-inducing headsets needed to access this realm, he promises that this new world he’s building should be ready in 10 to 15 years.

The magazine pointed that while Zuckerberg's obsession with the metaverse is one major problem, there are fundamental issues plaguing the company's core business that suggest Meta isn't going to just be able to effortlessly maintain the massive money printing factories that are Facebook and Instagram, and there is even reason to worry about WhatsApp's future as the world's most popular messenger.

The magazine said Facebook’s core advertising business is flashing some warning signs thanks to another, more competent monopoly that has long been a thorn in its side: Apple.

It said for investors looking to generate excess profits on trades and investments, all of this is part of a dark and dreary picture.

It said Facebook's revenue has declined for two consecutive quarters, costs and expenses are surging, operating margin is spiraling downwards, net income has been cut substantially, and so investors have abandoned ship and brought the share price down nearly 70% this year.