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8) So, what do you do, if you're Mark? Well, first of all, you'd love to reignite the growth! That would be great for earnings and stock price and also for narrative. Except you can't, because it's physically impossible. Facebook was stagnating--at *three billion MAUs*.

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9) Facebook didn't stop growing because of tiktok or bloat or narrative--it stopped growing because, well, there was no more room to grow. Half the world had an account. There just weren't really any more users left to add. Facebook wasn't shit. It had already won.

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10) And, relatedly, it was making, uh, a lot of money. So in case you thought the solution was "well make more money", remember that as a free to use social media website it's making $100B of net revenue each year. That's a lot of money. Facebook had already won.

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11) But nonetheless, it could still *lose* users and revenue. So it had to help its reputation somehow. So what do you do? Ponies? Free ice cream?

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12) Remember: it's reputation was, uh, quite bad. So one way to help it is to make people like it more. But another way to help its reputation is just to make people *dislike* it *less*. And one way to do that is with a distraction.

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13) "Hey everyone look over there, it's ThE mEtAvErSe!" People are no longer thinking about privacy and bullying and poor stock performance. They're wondering what The Metaverse actually means, and why Fake Zuck doesn't have any legs.

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14) It's not, uh, *positive*, but it doesn't have to be. It just has to be less negative. And something weird and new and confusing and vague and exciting is in fact less negative than privacy concerns and censorship debates.

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15) Plus, that negative sentiment was directed towards Facebook. What Facebook? Where? This is Meta!

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16) But my story still doesn't make full sense. Sure, maybe it explains why Facebook became Meta. By why spend $10b per year on fake legs? Remember Facebook's other problem: it couldn't grow anymore, because it had already grown the maximum amount physically possible.

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17) How do you project growth on your forward looking financial indications when you've built the biggest possible social media company? You do something other than social media, I guess.

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18) Something with the following properties: a) People think that maybe it could get really big. Like, $100b revenue big. b) If Facebook plows $10b into it people will be like "yes, that is how you make this thing really big, I guess, sure", and not ask any more questions.

10:56 PM · Oct 29, 2022Twitter Web App

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19) You need something which is everything and nothing. Something which could be the whole world, but where no one knows what to expect or how to know if you're doing it yet. You need The Metaverse.

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20) And so that could explain why Facebook did it: to distract from its reputational problems, and to project on a vague and unclear and futuristic enough space that they could convince people that maybe they were going to make another $100b from it, Facebook became Meta.

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21) Except there's one last problem. Investors have now decided that spending $10b per year on The Metaverse is dumb, and Facebook (er, sorry, Meta)'s stock is tanking. The vague meta guidance is no longer working. And yet Zuck keeps spending.

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22) Which makes no sense if this is all a diversion. It's one thing to blow $10b/year on smoke bombs. It's another thing to blow $10b/year on smoke bombs that don't produce very much smoke. Why throw good money after bad?

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23) So, to be clear, I *do* think that the above claims might be true: Facebook wanted to distract people from its reputation and its lack of headroom for growth, and so it became Meta. But I think there's probably something else, too. Something that explains the next $10b.

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24) Sometimes the easiest answer is the right one. Zuck is planning to spend tens of billions on building out The Metaverse because he believes in The Metaverse. It was a great distraction. But simultaneously it was also real.

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25) Facebook has the largest possible social media network on the web. They won. So what's next? Start building Social Media 3.0.

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