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Here's How Facebook Is Building a Trillion-Dollar Empire

By Neil Rozenbaum - Updated Jun 1, 2021 at 4:24PM

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The social media company might become the leader in AR and VR.

In this video I will be talking about Facebook (META 1.88%) and how it will become a multitrillion-dollar empire over the course of the next 10 years. Mark Zuckerberg has been talking about AR and VR for years, and things are slowly but surely gathering steam. That's not the only thing Facebook is focused on; commerce and the creator economy are another two big aspects of the company that it will be growing in the years to come.

Earnings highlight

Facebook reported first-quarter 2021 earnings of $3.30 per share, up 93% year over year, and revenue of $26.17 billion, up 48% year over year. Monthly active users (MAUs) were 2.853 billion, up 9.6% year over year. Daily active users (DAUs) were 1.878 billion, which increased 8.3% year over year and represented 66% of MAUs.

It is safe to say that people are still using Facebook, even if they tell you they don't. 

AR and VR

Facebook is a social platform to its core, and Mark Zuckerberg believes that through virtual and augmented reality it can take that social interaction to the next level. "I believe that augmented and virtual reality are going to enable a deeper sense of presence and social connection than any existing platform, and they're going to be an important part of how we'll interact with computers in the future." 

Mark has been a big believer in virtual and augmented reality for years. In 2014 Facebook acquired Oculus for $2.3 billion, and it has since then been heavily focused on building its own virtual world, called Horizon. Horizon is Facebook's biggest piece of its Metaverse puzzle. In Horizon people can explore, play, and create. And that's just the start. 

Regarding augmented reality, which is one step further, Facebook and Ray-Ban are expected to release their first-generation AR glasses later this year. AR glasses will require a lot of tech, and it might be years before they become mainstream.  

Earlier this year Facebook showed us a neural wristband and haptic gloves, and this just shows how focused the company is on building out this part of the business. The end goal is simple: Replace the way we interact with our smartphones, tablets, and laptops. If it succeeds, the sky is the limit.

The reason it is so focused on this segment is that the virtual reality market is expected to grow at a compound annual growth rate (CAGR) of 18% from 2021 to 2028 and reach $69 billion in revenue, and the augmented reality market is expected to expand at a CAGR of 43.8% from 2021 to 2028 and reach $340 billion in revenue.

Commerce

It's no secret that advertising and e-commerce are where Facebook earns the majority of its revenue. More than 1 billion people visit Marketplace each month. There are now more than 1 million monthly active Shops and over 250 million monthly Shops visitors.

Facebook launched carts on WhatsApp last year, and people have used them to send orders more than 5 million times. It's also building out broader infrastructure to support commerce, everything from payments to customer service and support. WhatsApp payments are now live in India and will soon launch in Brazil.

Facebook is slowly building a trillion-dollar empire, and once it is complete, it might become the biggest company in the world. 

For the full insights, do watch the video below. 

*Stock prices used were the closing prices of May 28, 2021. The video was published on May 30, 2021.

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool's board of directors. Neil Rozenbaum owns shares of Facebook. The Motley Fool owns shares of and recommends Facebook. The Motley Fool has a disclosure policyNeil is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.

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