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Judge denies US bid to block Meta virtual reality deal: reports
Judge denies US bid to block Meta virtual reality deal: reports
by AFP Staff Writers
San Francisco (AFP) Feb 1, 2023

A US judge on Wednesday denied a request by regulators to bar Facebook parent company Meta from buying virtual reality firm Within Unlimited, but allowed time to appeal the ruling, reports said.

The Federal Trade Commission filed a complaint in federal court in July, arguing that Meta is trying to unfairly buy advantage in the virtual reality market with the purchase of Within, maker of fitness app "Supernatural".

Thwarting the takeover would be a blow to Meta's ambitions to lead the way into a future in which internet life plays out in virtual realms in the metaverse.

In refusing to grant an FTC request to block Meta from proceeding with the acquisition, the judge put any closing of the deal on hold for a week to allow regulators time to appeal his decision, according to reports in Bloomberg and the Wall Street Journal.

"The court's ruling in the Meta/Within case is consistent with decades of legal precedent," said Matt Schruers, president of the Computer and Communications Industry association trade group.

"This decision will encourage innovation and investment by increasing legal certainty around technology transactions."

The judge's decision was filed under seal, meaning it was not available to the public. Meta declined requests for comment.

"This acquisition poses a reasonable probability of eliminating both present and future competition," the FTC complaint said. "And Meta would be one step closer to its ultimate goal of owning the entire 'Metaverse.'"

The social media giant said when the suit was filed that the FTC's move defied reality, and expressed confidence that its buy of Within would be good for VR users as well as developers who make apps in that market.

"The FTC's case is based on ideology and speculation, not evidence," Meta said in response to an AFP inquiry at the time.

Meta reports sales fall, but beats expectations
San Francisco (AFP) Feb 2, 2023 - Facebook and Instagram owner Meta on Wednesday reported its first annual sales drop since the company went public in 2012, but the fall was less brutal than expected, sending its share price soaring.

The social media giant said sales dropped one percent to $116.6 billion in 2022, while it also announced that the number of daily users on Facebook hit two billion for the first time.

CEO and founder Mark Zuckerberg pointed to the success of improved algorithms on Meta's video Reels service, that was delivering short clips more efficiently to users on Facebook and Instagram.

Meta competes fiercely with TikTok, the Chinese owned video-sharing platform that has proved a formidable rival in attracting young users away from once-dominant Instagram.

"The number of people daily using Facebook, Instagram and WhatsApp is the highest it's ever been," Zuckerberg said in an earnings call.

Zuckerberg also lauded improved artificial intelligence (AI) to better distribute ads after changes on the iPhone decided by Apple seriously hampered Meta's ability to target users.

- Year of Efficiency' -

The 2022 results ended a bad year for Meta, which in November announced it would lay off 11,000 employees or 13 percent of staff in the largest worker reduction in the company's history.

Zuckerberg said his company's "management theme for 2023 is the 'Year of Efficiency' and we're focused on becoming a stronger and more nimble organization."

Zuckerberg said Meta is working on eliminating layers of middle management as well as deploying AI tools to help engineers be more productive.

Meta will also be more aggressive when it comes to cutting projects that are not performing or are not priorities, he added.

Big tech platforms have been suffering from the souring economic climate, which is forcing advertisers to cut back on marketing, and Apple's data privacy changes, which have reduced leeway for ad personalization.

But Meta beat market expectations as the effect of iPhone privacy changes on ad targeting appeared to be waning and cost-cutting started bringing results, Wedbush analyst Dan Ives said in a tweet.

"At first glance... Meta getting its mojo back," Baird Equity Research said in a note to investors about the earnings report.

- Targeted advertising -

Apple sent shockwaves through the industry in 2021 when it began inviting iPhone users to opt out of having their online activity tracked by apps for the purpose of targeting ads.

This dealt a punishing blow to Facebook and Instagram that depend on super-targeted advertising for revenue.

Meta last year said Apple's policy, which impacts the precision of the ads it sells and thus their price, would cost the social media giant $10 billion in lost revenue in 2022.

Apple's iPhones hold about 55 percent of the smartphone market in the United States and about one third of smartphone users in Europe, the world's biggest ad markets.

The company is also under pressure for making a huge gamble on the metaverse, the world of virtual reality that Meta believes will be the next frontier online.

The bet however has yet to pay off with Meta's Reality Labs, the division that builds the necessary VR headsets and software, posting an operating loss of $4.28 billion in the last quarter of 2022. This followed big losses in the previous quarters.

"With losses at its VR division mounting, Mark Zuckerberg is going to have to accept an unfortunate reality: Virtual worlds are simply not what businesses or consumers want right now," said Insider Intelligence analyst Debra Aho Williamson.

Investors last year punished Meta, sending the company's share price down by an astonishing two thirds over 12 months, but the stock has recovered some of the ground in 2023.

In after-hours trading, Meta's share price was up more than 19 percent to $182.83

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