Can Facebook (FB) make money by killing the Metaverse?

Facebook’s financial numbers show that killing the Metaverse could be profitable. To explain, Facebook (FB) is doing a little better after the Metaverse’s death.

The media proclaimed the Metaverse’s death in Mid-May 2023. Interestingly, Meta’s (FB) revenues started growing again in the quarter ending on 31 March 2023. In comparison, Meta’s revenues fell by -4.47% in the quarter ending on 31 December 2022.

In contrast, Meta’s revenues grew by 6.64% in the quarter ending on 31 March 2022. Consequently, Meta’s quarterly revenues grew from $27.908 billion on 31 March 2022 to $28.645 billion on 31 March 2023. Conversely, the quarterly revenues rose to $32.165 billion on 31 December 2022.

However, Meta is making less money. Meta’s quarterly operating income from $8.524 billion on 31 March 2022 to $7.227 billion on 31 March 2023. Conversely, Meta’s quarterly gross profit grew from $21.903 billion on 31 March 2022 to $22.537 billion on 31 March 2023.

When did the Metaverse die?

I don’t think the Metaverse was ever a real thing. However, Meta (FB) CEO Mark Zuckerberg believes in it. Meta’s Reality Labs (the entity in charge of the Metaverse) lost almost $24 billion in 2021 and 2022, The Street estimates.

In contrast, Zuckerberg is creating a “top-level product group at Meta focused on generative AI.” Hence, ChatGPT has spooked Zuckerberg and scared him out of the Metaverse.

One reason the Metaverse died is Meta’s cash drain. Notably, Meta’s cash and short-term investments fell from $43.89 billion on 31 March 2022 to $37.439 billion on 31 March 2023.

Plus, Meta (FB) is generating less cash. For example, Meta’s cash flow fell from $14.076 billion on 31 March 2022 to $13.998 billion on 31 March 2023. Similarly, Meta’s quarterly ending cash flow fell from $15.353 billion on 31 March 2022 to $12.42 billion on 31 March 2023.

Meta (NASDAQ: FB) is still a cash-rich company, but it has far less cash. Zuckerberg loves cash and hates the idea of losing it. Hence…