Science & Technology
Facebook owner Meta to lift veil off its metaverse business
Since October, Facebook has renamed the company, articulated a vision of the internet where people can digitally connect through virtual-reality avatars or teleport to see places like ancient Rome, and helped trigger the metaverse investment craze.
When the company, now Meta Platforms Inc, reports fourth-quarter results on Wednesday, investors will get a new window into the financial impact of CEO Mark Zuckerberg's current passion.
Meta plans to break out the results of its augmented and virtual-reality hardware unit, Reality Labs, for the first time, an investment the company previously warned would cause a $10 billion hit to 2021 profit and would not be profitable "any time in the near future."
The company is hiring engineers and buying up multiple virtual reality gaming studios to build toward the metaverse, which is a broad futuristic idea of shared virtual realms that can be accessed via different devices and which Zuckerberg is betting will be the successor to the mobile internet.
Analysts said they would be keen to see indicators about the Reality Labs division's profitability, how long it might be a drag on the advertising side, and evidence around the strength of VR headset sales.
"It's going to be huge for me as an analyst, not having to surgically dig through Facebook earnings ... and just see a lens into the Reality Labs," said VR market analyst Stephanie Llamas of VoxPop.
Meta has said it expects non-advertising revenue to be down year-over-year in the fourth quarter as it compares unfavorably with the "strong launch" of its VR Quest 2 headsets during the previous year's holiday shopping season.
The company has not released sales numbers for Quest headsets, but a July recall notice for the Quest 2's facial foam liners said it affected about 4 million units in the United States. In a sign of strong sales for the headsets during the recent holiday period, its Oculus app hit the top spot on the U.S. App Store for free iPhone apps on Christmas Day.
'SIGNIFICANT UNCERTAINTY'
Front-of-mind for investors, though, will be how Meta's core digital advertising business is faring, after the tech giant said in October it faced "significant uncertainty" in the fourth quarter.
The company, which has the second-largest digital ad platform in the world after Alphabet Inc's Google, warned it could face continued hits from Apple Inc's privacy changes which have made it harder for brands to target and measure their ads on Meta's social media services Facebook and Instagram. Analysts said Meta had set the bar low for its coming earnings, but questions remained about these effects and about issues related to the COVID-19 pandemic.
"The Apple tracking change clearly had a negative impact on Facebook in the September quarter," said Evercore ISI analyst Mark Mahaney. "The question is, were they able to further mitigate that risk ... or did it become bigger?"
Pedro Palandrani, a research analyst at Global X, said the metaverse was the "long-term story" but in the near term investors would look for how Meta navigates Apple's policy as well as e-commerce updates and ways to monetize messaging or features like its short video offering, Reels.
Meta, which reported 2020 revenue of about $86 billion, has yet to explain in detail how it will make money in the metaverse. In November, it pointed to potential opportunities for brands, from immersive shops to running paid mixed-reality events. The company has invited a group of ad execs to discuss its brand change and its plans for the metaverse at a virtual roundtable next month.
Meta is expected to report revenue of $33.38 billion, according to Wall Street estimates, up 18.9% year over year, and is expected to post quarterly earnings per share of $3.84, a slight decline. The company has said it expects total 2021 expenses to come in at $70 billion-$71 billion and full-year 2022 expenses to reach $91 billion-$97 billion.
Science & Technology
Australia’s under-16 social media ban sparks anger and relief
Australians reacted on Friday with a mixture of anger and relief to a social media ban on children under 16 that the government says is world-leading, but which tech giants like TikTok argue could push young people to "darker corners of the internet".
Australia approved the social media ban for children late on Thursday after an emotive debate that has gripped the nation, setting a benchmark for jurisdictions around the world with one of the toughest regulations targeting Big Tech, Reuters reported.
The law forces tech giants from Instagram and Facebook owner Meta Platforms to TikTok to stop minors from logging in or face fines of up to A$49.5 million ($32 million). A trial of enforcement methods will start in January, with the ban to take effect in a year.
"Platforms now have a social responsibility to ensure the safety of our kids is a priority for them," Australian Prime Minister Anthony Albanese said on Friday
"We're making sure that mums and dads can have that different conversation today and in future days."
Announcing the details of the ban earlier this month, Albanese cited the risks to physical and mental health of children from excessive social media use, in particular the risks to girls from harmful depictions of body image, and misogynist content aimed at boys.
In Sydney on Friday, reaction to the ban was mixed.
"I think that's a great idea, because I found that the social media for kids (is) not really appropriate, sometimes they can look at something they shouldn't," said Sydney resident Francesca Sambas.
Others were more scathing.
"I'm feeling very angry, I feel that this government has taken democracy and thrown it out the window," said 58-year-old Shon Klose.
"How could they possibly make up these rules and these laws and push it upon the people?"
Children, meanwhile, said they would try to find a way around the ban.
"I feel like I still will use it, just secretly get in," said 11-year-old Emma Wakefield.
WORLD FIRST
Countries including France and some U.S. states have passed laws to restrict access for minors without a parent's permission, but the Australian ban is absolute. A full under-14s ban in Florida is being challenged in court on free speech grounds.
Albanese's Labor party won crucial support from the opposition conservatives for the bill that was fast-tracked through the country's parliament as part of 31 bills pushed through in a chaotic final day of parliament for the year.
The government has said enough notice was given as it first flagged the ban after a parliamentary inquiry earlier this year that heard testimony from parents of children who had self-harmed due to cyber bullying.
But it was criticised by social media firms and some lawmakers who say the bill has lacked proper scrutiny.
A spokesperson for TikTok, which is hugely popular with teen users, said on Friday the process had been rushed and risked putting children into greater danger.
"We're disappointed the Australian government has ignored the advice of the many mental health, online safety, and youth advocacy experts who have strongly opposed the ban," the spokesperson said.
Albanese said on Friday passing the bill before the age verification trial has been completed was the correct approach.
"We've got your back is our message to Australian parents," Albanese said.
"We don't argue that its implementation will be perfect, just like the alcohol ban for under 18s doesn't mean that someone under 18 never has access, but we know that it's the right thing to do."
The ban could strain Australia's relationship with key ally the United States, where X owner Elon Musk, a central figure in the administration of president-elect Donald Trump, said in a post this month it seemed a "backdoor way to control access to the Internet by all Australians".
It also builds on an existing mood of antagonism between Australia and mostly US-domiciled tech giants. Australia was the first country to make social media platforms pay media outlets royalties for sharing their content and now plans to threaten them with fines for failing to stamp out scams.
Science & Technology
South Korea authorities launch probe after three die in Hyundai car test
The Ulsan plant is Hyundai’s biggest manufacturing facility, with its own port and an annual production capacity of 1.4 million vehicles
South Korean authorities launched an investigation on Tuesday after three people died during a car test at a Hyundai Motor plant in the city of Ulsan, police told Reuters.
The two Hyundai researchers and one Hyundai contractor were found unconscious in a car at around 3:00 p.m. while they were testing it in a "chamber," according to Hyundai's labour union.
South Korean media reports said the three had suffocated.
A police officer in Ulsan said the police and the labour ministry were investigating the incident, including its cause.
A fire department official told Reuters that it first received a report at 3:17 pm that the accident happened at Hyundai's No.4 factory.
"Hyundai Motor Company is deeply saddened by the incident that occurred at our plant in Ulsan, South Korea," Hyundai said in a statement, saying it would "cooperate fully with all relevant authorities to determine the cause of this incident."
The Ulsan plant is Hyundai's biggest manufacturing facility, with its own port and an annual production capacity of 1.4 million vehicles, including exports of 1.1 million units.
In November last year, Hyundai Motor broke ground on a 2 trillion won ($1.44 billion) plant in Ulsan dedicated to making electric vehicles in South Korea, as the automaker accelerated a shift away from petrol-powered cars.
[embed]https://youtu.be/KrLKCrpLALU[/embed]
Science & Technology
Russia fines Google more than the world’s total GDP over YouTube bans
Russia has fined Google $2.5 decillion after the US tech giant took action against pro-Kremlin TV channels on YouTube following Moscow’s invasion of Ukraine.
Russia imposed a daily fine four years ago - a fine that has since swelled to an unprecedented level - ($20,000,000,000,000,000,000,000,000,000,000,000 - a 33-digit figure).
To put this into perspective, global GDP reaches an estimated $110 thousand billion (12-digit figure), according to the IMF.
Speaking to Russia’s TASS news agency, one expert, Roman Yankovsky from the HSE Institute of Education, said Google “clearly will not pay this penalty, and the Russian Federation will not be able to recover this money from the company."
Euronews reported that a short calculation shows that he is right.
Google's holding company, Alphabet, has a market capitalisation of slightly more than $2 trillion. Even with earnings of $80.54 billion from the last quarter, the tech giant doesn’t seem to be able to afford to pay the fine.
Google first barred pro-Moscow channel Tsargrad TV, which is owned by oligarch Konstantin Malofeev, four years ago.
At the time, Google was fined a daily penalty of 100,000 roubles and warned that amount would double every 24 hours if it went unpaid.
The original fine has been compounded by further penalties after Google eventually blocked a total of 17 Russian TV channels as a result of international sanctions, The Telegraph reported.
The tech giant now owes a staggering $2.5 decillion.
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