Yahoo Finance's Dan Howley discusses why some users of Meta, formerly Facebook, might be tracked in the metaverse.

Video Transcript

ZACK GUZMAN: I want to shift back over here as we're talking about transitioning and traveling from all the way here in New York to the UK. It will be much easier if Facebook is able to deliver on their metaverse plans. Of course, Facebook's Mark Zuckerberg floated the potential there as they changed their name to Meta. And for more on that, I want to bring on Yahoo Finance's Dan Howley because Dan, as many as these changes seem impactful here in terms of changing the company around, still a lot of privacy details to, I suppose, address as Facebook continues on with a new name, but the same challenges.

DAN HOWLEY: Yeah, exactly. And one of the big things that I think needs to be spoken about is how exactly Facebook is going to monetize this massive undertaking. They said $10 billion investment over the next few years. They're going to continue to invest in this. The metaverse, as it's been kind of portrayed and discussed so far, is still incredibly early. We're talking the infancy of this at this point. Look around to see how many people actually own AR or VR headsets to get a sense of where we are in terms of this kind of technology.

But what needs to be discussed is how they're going to make money. So I've spoken to a couple of experts who look at Facebook, look at where they make their bread and butter right now advertising, explain how that could translate into the metaverse. So just imagine that we're at a point where you can wear a pair of glasses that similar to what you would wear on a normal basis if you have poor eyesight like I do. And, you know, those would then be used to display different parts of a virtual world over the real world or allow you to just look at a virtual world in general.

Now, what experts are saying is that Facebook is going to put ads in that virtual world. So rather than just seeing an ad in your timeline or in your Instagram feed, you would see real world ad-- or ads that appear to be real world ads in this virtual space. So think if you're walking down a street, you would see billboards. People could put advertisements on themselves. You may get pop-ups. It would be any number of things along those lines.

But that's not really what the scary part is. The scary part is what Facebook would be able to collect about you in general. And because you're wearing a headset, experts that I've spoken to have said the eye tracking can be incredibly perceptive as to what you're interested in. So say you look at something, you linger for a second, you look at something else. Something catches your eye. What you generally look at, overall, that stuff that Facebook is going to be able to collect and then use to sell ads down the line.

So the whole idea of this metaverse, yes, it's a way for Facebook to control its future where it doesn't necessarily have to deal with hardware makers like Apple or the Google companies, Samsung, the like. They would own the hardware themselves via their Oculus Quest, although likely they would make it open to third parties as well. But the real thing here is what they're going to make money on, and that's advertising. And really, the look at how they're going to be able to do that is going to be quite interesting, to say the least and, frankly, a little bit scary if it does turn out the way experts are expecting it to.

ZACK GUZMAN: Yeah, and perhaps all the reason why a lot of these tech companies had long said they focused in on trust and building trust with their customers here, but obviously becomes a bigger issue the larger role they play in their customers' lives here in the metaverse. We'll bring that across the board. Dan Howley bringing us the latest there with a look at meta. It'll still take me a bit to get used to saying that over Facebook, but appreciate it.