Facebook acquires under-the-hood to build Metaverse

On October 29, Facebook announced that it would become a Metaverse company from a social media company, changing the company name to Meta. How many acquisitions did the giant companies belonging to big tech pursue to build the metaverse under the water?

On October 29, CEO Mark Zuckerberg announced that he would change the company name to Meta during his conference, Connect 2021. Although Facebook is the world’s largest SNS with 3 billion monthly active users, the next step on the Internet will be the metaverse, with a bold rebranding strategy to change its name.

Facebook is a company that has expanded its power through representative strategic acquisitions, including the acquisition of Instagram in 2012, the acquisition of WhatsApp in 2014, and the acquisition of Oculus. According to investment analytics firm Pitchbook, there have been 21 companies acquired by Facebook since 2019.

Most of the companies that Facebook recently acquired are metaverse-related companies. BigBox, which develops POPULATION: ONE, a virtual reality battle royale game; Unit 2Games, a developer of Crayta, a cooperative game production platform; and Beat Saber, a virtual reality rhythm game. (Beat Saber) developer BeatGames, virtual reality fitness service Supernatural developer Within, cooperative virtual reality FPS Onward developer Downpour Interactive, etc. Facebook has one after another metaverse related companies.

It is also pointed out that Facebook is facing antitrust issues in relation to the acquisition. As mentioned earlier, Facebook is an IT company that has achieved its status through strategic acquisitions, but in August 2021, the US Federal Trade Commission filed a second complaint arguing that the acquisition of Instagram and WhatsApp violated antitrust laws. A fine of 80 billion won was imposed by the British authorities for refusing to submit information necessary for the examination to investigate whether there was a problem.

Regarding the question of whether Facebook is taking over with the purpose of eliminating future competitors, a Facebook official said that unlike the social network business industry 10 years ago, Facebook is not leading the field such as VR or AR. Also, as Zuckerberg points out, if Facebook becomes one of the few companies that provide a metaverse, investing in and building the required product is the key to success. It is impossible to build the metaverse alone with Facebook, and collaboration with developers, creators, and experts becomes important. They say they know they face fierce competition.

While Facebook denies strategic acquisitions, regulators are showing a willingness to broaden the scope of their investigation to small as well as large acquisitions. In September 2021, the Federal Trade Commission announced the results of an analysis of 919 acquisitions made by Facebook and Google over the past decade, which were small enough not to be investigated. In this announcement, looking at individual acquisitions alone, it is unlikely that there will be a significant impact, but when the effects of hundreds of small acquisitions are put together, they have the potential to lead to monopolistic behavior. It also suggests opinions. Related information can be found here.