Last week, Facebook, the company that owns platforms like Instagram and WhatsApp, made the drastic decision to rebrand itself as Meta Platforms, or Meta for short.
The name change came as a surprise to regular consumers of the app, but Mark Zuckerberg, the founder of Facebook, claimed the name change meant the company was branching out and related to more than one product. He added that Meta was a better representation of the company's purpose.
Here to find out if there is more to the story with Facebook's rebranding, we asked industry experts what they did with the move and Zuckerberg's rationale. This is what we found out.
A letter from the founders was sent on October 28 when the rebranding was announced, emphasizing the idea that the company wants to be known for more than the Facebook service.
“Right now our brand is so closely tied to a product that it can't represent everything we do today, let alone in the future. Over time, I hope we will be seen as a metaverse company, and I want to anchor our work and our identity to what we are building towards, ”Zuckerberg said in the founding letter.
“We just announced that we are making a fundamental change to our business. We now look at and present our business as two different segments: one for our family of applications and one for our work on future platforms.
“Our work on the metaverse is not just one of those segments. The metaverse encompasses both social experiences and future technology. As we broaden our vision, it's time for us to embrace a new brand.
This means that over time the company will shift attention away from Facebook, with the letter also claiming that over time people will no longer need Facebook accounts to access other services.
Zuckerberg also mentioned that Meta means beyond, referring to the company's work to “go beyond what is possible today”.
Kyla Lam, research analyst for ARVR / Wearables at IDC, told Trusted Reviews, while the letter made sense, it was also undeniably a reaction to ongoing whistleblower Frances Haugen's testimony against the company.
“I think there are a number of reasons Facebook rebranded itself as Meta. First, in the face of numerous privacy and security allegations, Facebook is using the parent's new name as a distraction for the public to talk about the rebranding despite whistleblower Frances Haugen's testimony against Facebook, ”Lam lamented.
“Second, it helps appease investors, as its stock price has fallen recently. Having a parent company streamlines operations, suggesting there could be more transparency and clarity in the assessment of its family of apps, including Facebook and Instagram and Facebook Reality Labs, including related business segments. to augmented reality and virtual reality independently.
Lam added that the name itself likely reflects Facebook's desire to increase its reach and ad revenue.
"Finally, by changing its name to a science fiction term, 'metaverse' indicates Facebook's commitment to universalize this mode of communication," Lam continued.
“Over 97% of Facebook's revenue comes from advertising, and as Facebook's trust wanes, its dedication to this metaverse project shows its ability to create value in addition to advertising. "
Tammy Parker, senior analyst at GlobalData, told Trusted Reviews that while the move may not allay concerns about its security, the name could help Facebook grow.
“Renaming Facebook to Meta Platforms, or Meta for short, is a positive and forward-looking decision for the company as it emphasizes the evolving concept of the metaverse of virtual communities powered by AR and VR technologies”, Parker said.
“In the end, the social network Facebook still keeps its name, just like Instagram, WhatsApp and Messenger. But they will all be seen as part of a larger entity under the umbrella of Meta Platforms, which is positioned to transcend mere social media and networking.
Meta will encompass all of the platforms Facebook currently owns, including Facebook, WhatsApp, Instagram, Messenger, and Oculus.
Marta Pinto, senior research director at IDC, reflected Parker's sentiment, but added that it wouldn't solve all of Facebook's problems.
“In my opinion, the rebranding makes sense for two main reasons: as Mark Zuckerberg pointed out, Facebook has indeed become a technology company and the brand is not aligned with the mission and vision of the company. Pinto said.
“On another less positive note, the constant negative disclosures around Facebook are damaging enough and erode brand value so that a new name can come [in] practicality. "
She added that he will also have to deal with the continued growth of Tik Tok.
“This move also shows a forward-looking perspective from Mark Zuckerberg as Tik Tok has shown faster growth than Facebook and Facebook needs to reinvent itself as a social network (enough of those in the market now),” she said.
“The company has become an amalgamation of communication channels, online shopping, virtual rooms, social media, hardware manufacturer, service provider, advertising platform, etc. Obviously, a new strategy is behind the new branding and not an occasional facelift after less positive period.
Some criticize the name change as a way for Facebook to distract people from claims of privacy and security concerns. This was exacerbated by the outage of all Facebook platforms earlier in October of this year. Lam said the move would potentially help alleviate that, but only after a lot of time has passed.
“I think it's 50-50. Given that he has a bad PR for his privacy and security concerns and unresolved allegations, the announcement of a rebranding can only make matters worse by being seen as a cover-up, ”Lam said. .
" From where. it can affect staff turnover and reputation. Plus, the metaverse is a dystopian idea and a long-term project, which takes at least 10 to 15 years to build.
“For a company like Facebook, having a new brand image could appeal to the younger generations, and therefore attract new talent. "
Have other big brands already done it?
Parker told Trusted Reviews that Facebook's rebranding reflects a similar move by Google in 2015.
“This situation is very similar to Google which rebranded itself as Alphabet in 2015 and made Operation Google a subsidiary of Alphabet, signaling to investors, advertisers and users that the company as a whole would explore new markets and income opportunities, ”Parker said.
Parker added that while his timing is suspect, the move has clearly been going on for some time.
“While many critics argue that Facebook's name change is primarily a reaction to intensified government and regulatory scrutiny the company is facing around the world, the new nickname is much broader than that,” Parker said. .
“The social network Facebook is only part of what has become a multidimensional business. As long as the entire company was known as Facebook, it seemed like a one-ride pony, which it is no longer. The company has gone beyond its identification with just one segment of its operations.
“Certainly, positioning itself as a conglomerate could be a way for Meta to protect itself from increased antitrust scrutiny. But since the structure of the company has really not changed, the new name will not really help protect the company from regulators.