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Facebook parent Meta faces litany of legal, metaverse problems

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Yahoo Finance’s Dan Howley joins the Live show to discuss Meta’s legal problems as well as the outlook for the metaverse.

Video Transcript

JARED BLIKRE: Creating the Metaverse will cost a lot of money. Mark Zuckerberg told shareholders that Facebook's parent company, Meta, will lose significant amounts of money for three to five years to create the virtual world. Meta now spent $10 billion on the project in 2021 alone. Yahoo Finance's Dan Howley is here with all the details. Dan.

DAN HOWLEY: Yeah, you know, I find it hard to believe that three to five years is the timeline that Mark Zuckerberg is talking about here. It doesn't seem to make much sense, considering how far behind this technology is compared to what people expect of it. But in addition to this whole Metaverse rigmarole that we constantly hear about, the name change, the future headsets that are coming this year at some point-- believe it or not, Mark Zuckerberg, you're talking about a suit that people would wear to provide sensations for living as if you're in the real world in the Metaverse when you could just live in the real world, but whatever.

They're also dealing with a slew of outside problems. We have the attorney general from Washington, DC, Racine, going after Mark Zuckerberg personally in a lawsuit related to Cambridge Analytica, of all things, from 2018. They're also, the DC AG, suing Meta, previously suing Facebook, now Meta, on the same grounds with Cambridge Analytica. And in addition to that, we have a host of other issues that this company is facing, just beyond those Cambridge Analytica problems and the DC AG.

We have the FTC which filed an antitrust suit against them. We have, obviously, regulations coming down the pike in Washington as well as abroad in the EU, not to mention places like India that are also cracking down. And on top of that, we have the ongoing ad issues that Meta is facing as a result of, let's see, iOS, that app tracking transparency. That's that feature that Apple introduced, the privacy feature. The war in Ukraine, inflation.

So this is a company that really is kind of just besieged on all sides. And it doesn't seem like it's going to get easier anytime soon. And talking about losing significant money for three to five years, it's going to be more than three to five years before this really kicks off for people. It seems like an odd time to be doing this. But they're committed at this point. Once you change the name that's outside on the building to something to push this kind of concept forward for the Metaverse rather than social media, you really have kind of put your foot in your mouth at this point, and you have to--

JARED BLIKRE: Again.

DAN HOWLEY: --suck it up. Yeah.

JULIE HYMAN: That's what-- what you just listed, that is what I would call a litany, a litany, of different issues.

JARED BLIKRE: I've got Facebook fatigue. I was just messaging everybody on Slack, Facebook fatigue.

JULIE HYMAN: Yes, exactly. And, you know, when Zuckerberg talked yesterday, did he sort of-- I mean, I don't know that the guy has ever done a mea culpa about anything necessarily.

JARED BLIKRE: No.

JULIE HYMAN: But was there sort of more exploration of why he still sees this as the thing to bet the farm on, so to speak?

DAN HOWLEY: Look, Facebook had done, a few weeks back, I think last week, actually, they had released this kind of study, basically. They didn't do it. It was independent researchers, but it was funded by Meta, saying that the Metaverse will be worth, in several years, as much as $3 trillion. That's how much it would add to the economy. And look, I think this is still a very nascent idea. I do think that there will be some form of Metaverse.

I don't know if we'll be wearing VR headsets, where we just become the people from "Wall-E," where we just sit in chairs and have headsets on all the time. I do think it'll be something more akin to wearing maybe AR glasses, something like that. Some research that I spoke to said specifically, look, we are living in the Metaverse right now. We use our phones to scan QR codes.

JARED BLIKRE: I thought you were going to say we're in the matrix.

DAN HOWLEY: Yeah, we're in the matrix. Look, Elon Musk is right. No, we're using QR codes on our phones to scan things, to take the real world digital, right? So that essentially is what a lot of researchers consider the Metaverse. So it's not just this idea of just VR, I'm going to slap in and become the "Wall-E" people. It's AR. It's QR codes. We use AR on our smartphones already. Look, I use them to size things up for my apartment if I'm going to buy something, using apps like that.

You can look at different types of-- for instance, if you're interested in buying a car, you can see that, and you can zoom in and out, see what the features are like on your smartphone, on your computer. So I think those are things that are very realistic and will continue to evolve. I just still am not sold on this whole idea of wearing a VR set for hours at a time. They're clunky. They're heavy. I sweat a lot, and I don't want to have to constantly do that into a headset for hours at a time, so.

JARED BLIKRE: Worth noting that 5G is still slow in most places, and it was overhyped. So maybe--

DAN HOWLEY: Oh, yeah, I mean, look, that's a whole different story. And I can get real deep on that. But I'll save that for another time.

JULIE HYMAN: You know, if this is a simulation, they really got--

JARED BLIKRE: It's a really good one.

JULIE HYMAN: No.

JARED BLIKRE: Oh, it's a really bad one.

DAN HOWLEY: This is the worst--

JULIE HYMAN: It's a really bad one! They got to fix-- like--

JARED BLIKRE: There are some problems, admittedly.

JULIE HYMAN: If this is fake, there's some stuff that should not be happening. In any case, thank you, Dan Howley. Appreciate it very much this morning.