The $320 billion rout of Facebook shares last week is just the beginning of a long decline for the company if it fails to radically overhaul its business model to keep up with web3 technologies and the social trends driving them, proponents of the emerging online world order have said.
Decentralization and interoperability, features that allow users to retain control of their data and take it with them wherever they go, could help Facebook, but it will still suffer a massive drop in advertising revenue even if these concepts can be implemented, proponents say.
Facebook Survive Web3 And The Metaverse
A move away from Facebook advertising is expected in the near future, according to Scott McKeon, growth manager at Sydney-based monitor company Espresso. Edwina Pickles is a
For Trent Barnes, a principal at Melbourne-based crypto investment firm Zerocap, Web3 is all about creating value for users and letting them take that value with them. Web3 includes cryptocurrency, digital wallets, blockchains, NFTs, token-based economics, and decentralised autonomous organisations (DAOs).
While Facebook has made its money from digital advertising, convincing its shareholders it needs to do the opposite is going to be a difficult sell, said Mr. Barnes, who has just launched another company called MaxStealth that he said would invest in Web3 start-ups.
Is there any way for Facebook to compete with its competitors if they are building systems that aren’t designed to extract value from users? he asked. “When you have an unprecedented run of profit and value creation for shareholders that has been like summiting Mount Everest, and then all of a sudden, you’re on the decline on the other side and your competitors are building systems that aren’t designed to extract value from users?”
A year after rebranding itself as “Meta,” Facebook still generates 98% of its revenue from digital advertising, which equates to a web 2.0 model, according to Mr Barnes. Despite this, Facebook’s name change to Meta is a sign that the company recognises the problem it is facing.
A massive user exodus is expected over the next five years, unless something is done by Facebook.
The Zerocap’s Trent Barnes Explains
‘How can we increase revenue?’ is still the driving force behind their innovation.” Asked by Mr Barnes, “How do we increase the user experience, user community, and the user’s best interest?'”
“If Facebook wants to remain relevant, it must become interoperable with the metaverse. However, they’ll have a difficult time making the switch.
In order for Facebook to continue generating advertising revenue, you must be able to take your Facebook memories and put them into Grand Theft Auto or World of Warcraft.”
a new source of revenue will be required,” says the executive. If Facebook doesn’t do something, it’s going to lose a lot of users in the next five years.”
A shift from social media advertising to the decentralised, community-based Web3 world may be on the horizon for Scott McKeon, the co-founder and head of growth at Sydney-based mobile-working start-up Espresso, he said.
There’s an incredible community around bitcoin, which is a huge web 3.0 project.” There’s more to these people than just apathy, according to Mr McKeon.
In the face of larger, more established competitors, we’re looking at how to build a community around our technology and the mobile lifestyle it embodies.
It is my belief that community can be fostered through web 3.0, and not just through a loyalty programme.