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Wednesday, October 20, 2021
Facebook's name change won't help it outrun its troubles
Taking a page from Google (GOOG, GOOGL), Snapchat (SNAP), and now, Kanye West, Facebook (FB) is reportedly renaming itself. The Verge reported Tuesday that Facebook is changing its name to reflect its increasing focus on the so-called metaverse, a persistent, online world where you can interact with others as though you were speaking in real life.
Facebook CEO Mark Zuckerberg is expected to announce the change on Oct. 28, during the company’s virtual reality and augmented reality-focused Connect event, though it could be announced sooner, the Verge reported, citing a source with direct knowledge of the matter. When reached for comment, a Facebook spokesperson said the company doesn’t “comment on rumor or speculation.”
The company reportedly won’t change the name of its various apps, meaning the Facebook app will still be called Facebook. Instead, the name change will only impact the social network’s corporate parent. Google made a similar change in 2015 when it renamed itself Alphabet to help differentiate the Google search engine and products from its Waymo autonomous vehicle efforts and other businesses. Snapchat, meanwhile, changed its name to Snap in 2016 as it aimed to be known as a camera company.
Facebook’s upcoming name change, however, could serve an alternative purpose beyond signaling the company’s dive into the metaverse. It could also serve to separate the larger corporation from the controversies that have spun out of its Facebook and Instagram apps.
The company is still contending with the fallout from former employee Frances Haugen’s leak of thousands of pages of documents to The Wall Street Journal and “60 Minutes.” On Oct. 5, Haugen testified before Congress about the leaks and urged lawmakers to rein in the social network. She is now scheduled to testify before the British Parliament on Oct. 25.
The documents contained internal studies and discussions related to Facebook and Instagram’s inability to address issues ranging from Instagram’s impact on the mental health of teen girls to human trafficking and hate speech on Facebook.
Facebook has downplayed the leaks by saying the documents were taken out of context. Earlier this month, Facebook VP of content policy Monika Bickert told Yahoo Finance that the documents had been mischaracterized, pointing to a survey showing that when teen girls felt bad about their bodies, Instagram made them feel worse.
“The stolen documents contain what is not a peer reviewed research article, but was instead a survey of a small number, I think around 40 Instagram users, who were teens who were already struggling with mental health issues,” she said.
Facebook also signaled on Monday that it's anticipating a new series of articles related to even more leaked documents. In a series of tweets, VP of communications John Pinette said that more than 30 journalists were working on the articles and that “A curated selection out of millions of documents at Facebook can in no way be used to draw fair conclusions about us.”
Right now 30+ journalists are finishing up a coordinated series of articles based on thousands of pages of leaked documents. We hear that to get the docs, outlets had to agree to the conditions and a schedule laid down by the PR team that worked on earlier leaked docs.
— Facebook Newsroom (@fbnewsroom) October 18, 2021
Facebook is also staring down an antitrust lawsuit filed by the Federal Trade Commission, which accuses the company of running a buy or bury campaign against upstart competitors. While a judge dismissed an initial complaint filed by the FTC, the regulator has filed an amended lawsuit accusing Facebook of being an illegal monopolist.
Facebook’s attempt to distance its social networks from its metaverse efforts may not go very far to stave off these controversies. While Google changed its name to Alphabet, most people still refer to the parent corporation as Google. The same goes for Snap, which everyone still calls Snapchat. And I’m going to go out on a limb and say Kanye West will still be known as Kanye West, instead of Ye.
Still, Facebook has beefed up its virtual and augmented reality efforts, building out its Oculus hardware line and unveiling its Horizon Workrooms app. The software, which debuted in August, allows users to host work meetings by creating avatars and interacting in a shared virtual space.
And Facebook isn’t the only company interested in developing the nascent metaverse. While most people usually think of the metaverse as an extension of gaming thanks to titles like “Fortnite” and "World of Warcraft,” tech firms are banking on the technology becoming the next iteration of the internet.
Nvidia (NVDA), for example, is working on its own Omniverse platform, which it hopes will serve as the building blocks of the metaverse. It has already worked with BMW to demonstrate how the automaker can reconfigure factories by re-creating an existing facility in the metaverse that engineers could manipulate.
Facebook, for its part, is banking on the metaverse giving it greater control over its destiny, so it doesn't have to rely on users accessing its apps via third-party hardware like the iPhone. By offering its own hardware, Facebook could have better control over how users interact with the metaverse. Facebook wouldn’t have to deal with the whims of other companies, like when Apple updated a privacy feature on phones that could cost the social network big advertising dollars.
Still, even if it does end up thriving in the metaverse, Facebook won’t be able to shake its name — or the controversies that will forever be tied to that moniker.
By Daniel Howley, tech editor at Yahoo Finance.