After nearly two decades of Facebook’s dominance in the social networking and tech spheres, CEO Mark Zuckerberg announced in October that the company would be rebranding as “Meta.” The name change corresponds to Zuckerberg’s new focus on expanding the “metaverse,” which will provide a virtual space for users to engage in various activities via a digital avatar. Although it’s a new, open frontier for the company, Zuckerberg’s announcement was met with skepticism, with many critics positing that it’s Zuckerberg’s attempt to distance the company from recent scandals and controversies. This case asks students to discuss the rebranding and to evaluate Meta’s potential for success.
Students should apply learning in brand management and strategic management and transformation to discuss Facebook’s rebrand to Meta.
Source: Photo illustration by Chesnot/Getty Images
In 2004, a social network site called thefacebook.com went live on the campus of Harvard University in Cambridge, Massachusetts, with more than a thousand students registering within 24 hours. Shortened to simply Facebook, that blue-and-white name has become one of the world’s most recognized logos in the nearly two decades since. On October 28, 2021, Facebook announced it was shedding its old name and image to become Meta. Facebook and its apps such as Instagram and WhatsApp will now live under the Meta umbrella.
The announcement signifies not just a name change but a new chapter for the company, as it looks to rehabilitate its public image following its recent succession of public relations crises. There was the Russian infiltration of Facebook during the 2016 election, followed two years later in 2018 by the Cambridge Analytica data privacy scandal. In September 2021, former Facebook employee-turned-whistleblower Frances Haugen spoke in front of U.S. Congress about the harms that the company has caused, amplifying hate speech, spreading misinformation, and undermining democracy.
As Facebook has been hit by these scandals, CEO Mark Zuckerberg has kept his focus on a new digital frontier known as the “metaverse.” In a founder’s letter, Zuckerberg described his vision for the metaverse as a “set of virtual spaces” where you can “hang out with friends, work, play, learn, shop, create and more.”
In a video presentation that announced the new name, Zuckerberg expounded on the metaverse concept as a place where a single avatar can move between digital worlds. These immersive virtual spaces could look like playing sports, going to concerts, meeting with friends, attending college lectures—daily life, in other words.
“Today we are seen as a social media company, but in our DNA we are a company that builds technology to connect people, and the metaverse is the next frontier just like social networking was when we got started,” Zuckerberg wrote. Facebook told investors that it would be spending USD 10 billion of its overall operating profit this year to build these next-generation virtual spaces.
Why Is It News?
Acknowledging Facebook’s run of scandals, Zuckerberg dedicated part of the presentation to how the company will prioritize privacy and safety in the metaverse. “Privacy standards will be built into the metaverse from Day 1,” he said. “One of the lessons I've internalized from the last five years is we need to emphasize these principles from the start.”
In an interview with the Associated Press, Haugen said she fears the metaverse will be “extremely addictive” and will lead to more sensors in homes and workplaces. “If your employer decides they’re now a metaverse company, you have to give out way more personal data to a company that’s demonstrated that it lies whenever it is in its best interests,” she said.
In his founder’s letter, Zuckerberg emphasized that it’s not about people spending more time online but making the time they already spend more meaningful. Facebook had announced a few days before the name change that it was separating its virtual reality and augmented reality business into a division called Facebook Reality Labs.
Corporate rebrands are generally used to distance a company from a toxic reputation, like tobacco giant Philip Morris changing its name to Altria Group after years of reports on the dangers of cigarettes. Nicholas Clegg, Facebook’s vice president for global policy and communications, rejected the comparisons as “extremely misleading.”
Less than two weeks after the announcement, articles were already declaring Facebook’s metaverse dead on arrival. Critics wrote that the public doesn’t want a world whose ruler is Mark Zuckerberg. New Yorker writer Kyle Chayka compared Meta’s virtual reality to a “souped-up version of Second Life.” Amanda Hess described in The New York Times the metaverse demo as a “virtual retirement community where isolated millennials can live out their final days.” The consensus seems to be that if a tech giant is trying to create a new universe, it should be a company that has some sort of democratic control.
“No matter what Mark Zuckerberg calls it, it will remain Zuckerberg Inc. until he relinquishes some power and yields to functional corporate governance,” Jennifer Grygiel, an associate professor and social media researcher at Syracuse University, told The New York Times .
- Do you think the rebranding is enough to distance Meta from Facebook’s recent controversies?
- Given the negative reception to early Meta demos, how successful do you think this rebranding will be?
- At what point do you think Zuckerberg will have to make concessions in his role as CEO?
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