With a whimper, Facebook’s currency ambitions ended yesterday. But its financial ambitions, now in the form of the metaverse, remain.
The social network’s parent company, Meta, announced Tuesday that David Marcus, the former PayPal executive who had been spearheading its Diem née Libra cryptocurrency project, had left the company.
Diem was about as close to an unmitigated flop as a company with an almost $1 trillion equity market cap company can deliver.
The various corporate fictions that Facebook seemed to think would help Diem – that it, the largest social networking company on the planet, was merely a member of the currency’s governing independent Swiss body and that all the various members of that association would have equal say in the development of the digital currency it managed – did nothing to blunt the the trans-Atlantic regulatory revulsion at the idea. Before that nonprofit association even had its first meeting, eBay, MasterCard, PayPal, Stripe, Visa, Priceline’s parent company and South American e-commerce giant Mercado Libre had all withdrawn, presumably after getting a stern call from regulators or out of a desire to avoid any such conversation.
With the whole thing obviously a non-starter in China, once E.U. and U.S. regulators and politicians were opposed, it was all over. Not before, however, Mark Zuckerberg had to testify before Congress about this, an affront and annoyance I’m sure he never let Marcus forget.
Just as Marcus exits, Facebook has leapt into the metaverse. So, Marcus out and Meta in: what’s the connection?
Right now, Facebook makes money by getting people to do stuff on its social network – post pictures, message family members and old friends, foment ethnic cleansing – and then convincing advertisers that this is something they should be a part of and allowing companies to target ads to users based on a whole host of data points that Facebook has catalogued on its almost 3 billion users.
The company’s aspirational pivot to the metaverse is, in its own telling, an attempt to get people engaged in a fictional digital space where they are constantly buying and selling things that fluctuate in value. The snarky comment here – hey, what does Facebook think the metaverse is, the stock market? – is actually the start of a useful way of thinking about things. If the structures of relationship and meaning created by financial markets are in fact the biggest and most profitable existing social network, it makes sense that Facebook would want to be a part of that.
Diem was, I said when it first launched, an odd attempted return to Facebook’s own history, when, in 2011, in game Farmville, a game where you bought things in a closed, digital world, came to account for 12% of the company’s revenue.
Set aside the web 3.0 and NFT and DeFi buzzwords and the metaverse offers as clear a path to Meta’s goal of being a financial company than Libra/Diem did. Which is to say it absolutely might not work but also it’s naive to dismiss the power of a company like Meta to get what it wants.
Right now, Meta/Facebook makes money by monetization. Its next goal is financialization. Marcus failed to deliver the latter, and now Zuckerberg is hoping the metaverse can.