Facebook’s BIG Gamble

Oct 31, 2021

I can’t keep up with Facebook these days.

Every time I turn around, a different story is dominating headlines and a different commentator is stepping up to the plate to dunk on its fearless leader.

Censorship. Privacy concerns. Ad woes. Outages. And now… a name change: Meta.

Admit it, the Wendy’s tweet made you chuckle.

All jokes aside, one of the most important skills to have as an investor is the ability to see through this B.S.… errr… hype.

Luckily, there is a tool to help investors do just that.

Spoiler alert, we ARE the tool.

By listening to consumers in real time, we gain a sneak peek into what really matters. What do consumers like? What do they not like? What products are they buying? What services are they using?

Here’s what we know about Facebook (FB).

Facebook — aka Meta — is THE Dominant Social Player

Just look at the chart below showcasing consumer mention volume, noting that Facebook-owned social sites are in yellow. Peers Snapchat and Pinterest are included for reference…

Reports of global userbases support LikeFolio’s finding of Facebook social dominance.

Facebook owns four of the top five apps by monthly active users… and no one else is even close to its total number of users across those apps.

And Facebook’s suite of apps covers the gamut of user demographics…

While grandma is sharing about the church bake sale on Facebook, her granddaughter is posting her #OOTD (outfit of the day) on her Instagram Story.

This is key.

Perhaps the most valuable data set Facebook has its hand on has nothing to do with the content users are posting… but rather HOW the users are connected to each other.

Facebook’s Massive Relationship Map is its Long Game

Facebook boasts more than 3.5 billion monthly active users who use at least one of its apps.

Billion, with a “B.”

And a key component of each of these apps is connecting users with other users, thus building a massive web of relationships.

In fact, in 2017 a study found that Facebook could predict with a high level of accuracy when a couple was going to break up… two months before it happened!

All because of the data behind user relationships and interactions.

This relationship map is Piece No. 1 of Facebook’s metaverse puzzle.

What’s Piece No. 2?

Facebook is Investing in Virtual Reality

The company is spending at least $10 billion in the next year on its Facebook reality labs division.

This includes its virtual reality headset, Oculus, and its Facetime/Alexa hybrid device, Portal.

Oculus buzz is building into the holiday season, after blowing it out of the park last year

What once seemed like an odd addition to the Facebook lineup (Oculus) now makes sense as a layer on top of a massive social web.

So, what is Facebook’s plan for total domination? Combine relationships and technology to create a virtual world, or metaverse.

We released an extensive report describing exactly what the metaverse is months ago. (And yes, Facebook was included.)

Short term, we know Facebook has some problems to fix. Even though it’s the biggest player in town, happiness is falling among its userbase.

Keep an eye on this.

But to be frank, we have our eyes on OTHER names that have a major role to play in the metaverse without the drama.

Members already know who four of these major players are…

It’s fun being ahead of the game.

Megan Brantley
Head of Research, LikeFolio