The problem is, what were their other options? They made a ridiculous amount of money on a social network. Where do you go from there? VR and AI were and are attempts to remain relevant, but not every company succeeds in doing that, and Facebook is particularly unsuited to it - you don’t just pivot from web dev to innovating in new fields.

One of the common private equity playbooks recognizes this - they’ll often jettison anything resembling an R&D department from a new acquisition, and run the company as a cash cow. If its market dies, so be it. Leave the innovation to the startups who are focused on it.

The problem with Facebook is that the founders have ambitions beyond their capabilities (apparently).

Unfortunately, the Metaverse happened during the COVID bubble, so there was no shareholder discipline then. Meta did crash after interest rates went up - there were large layoffs - but then they got a boost to their stock due to their AI strategy, which seemed competitive until Llama 4 in early 2025, although they were never on the frontier. Even since then they’ve been burning a ton of cash on AI with no discernible results.

The private equity strategy of putting Meta into maintenance mode and focusing purely on their social media business would have been much better.