👋 This week we explore the diverging fates of the FAANG group; a dating site based on fruits; and, mortgages in the metaverse. We dive into the essences of the underlying evolutions of these tech giants and call for potential risks to watch out for.
Analytics, Digital, Design In Action
Decoupling of the FAANGs
The FAANG group of stocks has defined the markets and technological developments during the 2010s. Facebook (now Meta), Apple, Amazon, Netflix, and Google, epitomized the massive digital transformation we’ve seen over the decade. They’re among the largest, most iconic companies and with all the ink used on them over the years, we’re sure you’ve gotten to know them even more during the pandemic, as they were the main beneficiaries (and allies for most of us) during the lockdowns.
But, their fates are starting to decouple, and the latest earnings releases confirm the growing chasm. Meta’s market value plunged more than $230B following its lackluster results, marking the largest drop in corporate value in a single day (that is, before its prior record of shedding $120B back in 2018). Looking beyond the financial data, declining user count for the first time alongside poorer monetization are the main reasons to blame.
We’ve written much on the latter but the former is new - and maybe even more alarming. It’s no secret that Facebook faces many competitors - from Twitter, to Snapchat, and Pinterest - but nothing as formidable as TikTok.
Meanwhile, Google’s latest quarter demonstrated its strength across its search businesses, proving it’s more insulated from Apple’s privacy changes. The search giant also announced a 20-for-1 stock split, which would make its previously expensive stock ticket more accessible to everyday investors. Indeed, YouTube is now a bigger business than Netflix with ~$8.6B in sales versus $7.7B. Similarly, Google Cloud is proving to be a solid third player following Azure and AWS.
Speaking of which, Amazon jumped despite its lacklustre e-Commerce results as it announced it would raise prime memberships to $140 per year as well as robust performance from its cloud and advertising business. AWS’s growth accelerated to 40% on a large $18B run-rate. Amazon’s burgeoning advertising business also reached $31B, more than Snapchat, Twitter, and Pinterest’s sales combined.
So what’s the bottom-line? As we’ve seen last time, Netflix also posted weakness in its business. While these results are a snapshot of a quarter, there are themes emerging, particularly how more diversified companies (conglomerates like AMZN, GOOG, MSFT) are thriving more than specialists (META, NFLX).
Moreover, the sense of ecosystem control strikes at the heart of META’s weakness as the others are not as suspect to Apple’s whims. This is a large reason why META wants to own the Metaverse - own the next compute platform and not be subject to another Apple. While much remains to be seen, post-pandemic, contrary to common belief, might not be as easy for digital champions, even for formidable FAANG members.
Fruits With Benefits
Dating-app conglomerate Bumble marks its first acquisition with Fruitz. Fruitz takes a unique approach to help users find matches, as it assigns a fruit to each particular kind of relationship type, ranging from those who want long-term commitments to those in search of one-night action.
Bumble already has an international footprint as the parent company to Badoo, which is particularly popular in Europe, it sees the addition of Fruitz as a way to gain more traction with a younger, Gen Z audience.
Vancouver real-estate has always been remarked as out of this world, but this latest mortgage deal brings that statement to another realm. TerraZero Technologies Inc. — a Vancouver Web 3.0 metaverse-focused company — announced that through its platform, it completed its first-ever “metaverse mortgage” on a plot of land in Decentraland — a self-governing digital world powered by the second most popular cryptocurrency, Ethereum.
With an unnamed banking partner’s support, TerraZero will continue expanding its mortgage capability and building a metaverse real estate platform, Amadea, which may resemble the ubiquitous real estate search websites where users can find property and calculate mortgages. What do you see as further use cases to strengthen the offering? Connect with us on twitter and let us know.
Connect the Greatest Minds Today for Tomorrow
We appreciate your continuous support in the Expert Circle by sending community nominations and self-nominations. 🙏 Thank you and please keep sending nominations! Let us know who we should connect with.
We’re looking for people who can help us build the knowledge network and make a greater impact. If you’re interested in contributing or know someone who’s a good fit, check this out!
Please spread the word!
We are sending a weekly digest every Tuesday. If you like what we write, please consider sharing it with your network, that would help us tremendously!