The Big Story

A CTO for the metaverse

Facebook is getting ready for the metaverse. The company's decision to replace outgoing CTO Mike "Schrep" Schroepfer with hardware SVP Andrew "Boz" Bosworth is not only a signal that the company is committed to AR and VR for years to come; it also shows that Facebook execs see the metaverse as a foundational technology, with the potential to eventually replace current cash cows like the company's core "big blue" Facebook app.

Bosworth made his name at Facebook through hardware, leading the company's AR/VR and consumer device efforts. (He's also been with Facebook since 2006 and is among Mark Zuckerberg's closest allies, which can't hurt.)

• Under Bosworth's leadership, Facebook refocused its VR hardware play on the standalone Oculus Quest headset, selling an estimated 8 million devices to consumers since the launch of the Quest 2 in 2020.
• Bosworth also managed to turn the company's Portal smart display from a product that was decried as a privacy nightmare into a viable competitor to devices made by Google and Amazon. "The backlash [against Portal] was very much predicted," Bosworth recently told Protocol. "It never really materialized amongst consumers."
• More recently, Bosworth has been instrumental in setting Facebook up for a major role in consumer AR. The company has been testing AR devices in the wild, and Facebook debuted its first set of smart glasses together with Ray-Ban this fall.

But Facebook's ambitions are larger than devices. The company doesn't simply want to build and sell a couple million AR and VR headsets. Instead, it plans to launch the next big platform — something it arguably missed out on when mobile first emerged, forcing it to be just another app maker in Apple's and Google's stores.

In fact, its vision is building the metaverse. Zuckerberg has been beating the drums about the metaverse being Facebook's future for months now, even telling investors that it will require "very significant investment over many years."

• The metaverse is often described as a persistent digital world where people can interact with each other via their avatars, and then play, attend events or even work together.
• Such shorthand descriptions often lead people to confuse the metaverse with VR itself, or assume that Facebook's Horizon VR world is the company's beta version of the metaverse.
• Bosworth's promotion to CTO signals that this isn't the full picture. Instead, Facebook clearly understands the metaverse as a foundational technology that may one day tie together AR, VR and even mobile for new ways of real-time interaction.
• In other words: It's not something you build a device for; it's something you build a company for.

And Facebook wants to be the metaverse company, for some good reasons. Usage of its core Facebook app has stagnated, and executives have long warned that the stream of advertising that has made mobile social networking such a cash cow is ultimately going to slow down. With the metaverse, the company is now betting on the next big thing. With Bosworth as CTO, it wants to have the right man for the job.

Still, there are some open questions — and no, not just about the viability of the metaverse, which we may not get real answers on for many years. Instead, we're left to wonder:

• Who will now lead Facebook's hardware efforts? It's unlikely that Bosworth will completely step away from the Facebook Reality Labs leadership, so we should expect him to put a trusted lieutenant in place.
• How will the CTO organization change under Bosworth? Schroepfer had a major focus on AI, which may become a lot more product-focused as the company begins to build assistants and other AI technologies for AR and VR. However, the outgoing CTO also oversaw engineering infrastructure, which is very far from anything Bosworth has dealt with in recent years.
• What does all of this mean for Facebook's stance on privacy and the way it talks about the subject? Bosworth has been blunt about his willingness to talk about the ugly sides of Facebook, even if it has gotten him in trouble in the past. More recently, he has defended getting technologies like camera-mounted glasses into the world to get real-life feedback for future products. "I don't fear the controversy," he recently told Protocol.

That's a significant departure from the soft-spoken Schroepfer — and it could lead to a lot more conflict down the line.

— Janko Roettgers (email | twitter)

A MESSAGE FROM ALIBABA

This year, China will become the first country where ecommerce sales will outpace brick-and-mortar transactions. U.S. businesses are using Alibaba's platforms to sell to 900 million digitally savvy consumers in China and untap new opportunities for long-term growth.

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Protocol Event

Is there innovation left in smartphones?

Smartphones are the most important device in modern life. But over the last few years, it feels like not much has changed, and as if the industry has instead moved toward wearables, AR glasses and whatever else comes next.

Are smartphones really over, though? Join Protocol's David Pierce for a conversation about the future of the smartphone with Drew Blackard, vice president of mobile product management at Samsung, and Christina Cyr, CEO of The Cyrcle Phone, next Tuesday, Sept. 28, at 11a.m. PT/2 p.m. ET. RSVP here.

People Are Talking

Tim Cook wrote that Apple is trying to identify employees who leaked company information, according to a, uh, leaked memo:

• "People who leak confidential information do not belong here."

On Protocol | Policy: Senators got pretty frustrated with answers from Facebook's Steve Satterfield at a hearing, and Sen. Mike Lee vocalized that impatience:

• "It's clear to me you don't want to answer that, whatever. I was throwing you a bone there to try to allow you to engage in a dialogue."

Steve Ballmer has become really fond of toilets:

• "I've become a real obsessive about toilets. Toilets, toilets, toilets."

Toss your Chinese phones, Lithuania's deputy defense minister, Margiris Abukevicius, said:

• "Our recommendation is to not buy new Chinese phones, and to get rid of those already purchased as fast as reasonably possible."

Making Moves

Qxpress is reportedly considering an IPO. A U.S. listing could value the shipping services provider at between $500 million and $1 billion.

eToro is pushing its IPO to the fourth quarter because of regulatory delays. The online trading platform originally planned to go public during the third quarter.

Chelsea Macdonald is joining Clubhouse as head of entertainment partnerships. She last worked at Community as director of entertainment partnerships.

Gee Rittenhouse is leaving Cisco after five years as security SVP. Shaila Shankar is stepping up to lead the company's Security Business Group.

Jessica Kane is joining PRO Unlimited as chief client officer. Kane is a former senior managing director at Accenture.

In Other News

• Amazon warehouse workers can now fight quotas. Gavin Newsom signed a bill that prevents mega-retailers like Amazon from punishing workers for stopping work for things like bathroom breaks.
• Fortnite can't come back to the App Store anytime soon. Apple told Epic it won't reinstate its developer account until the appeals process is officially over, Tim Sweeney said.
• Elizabeth Holmes had a lot of confidence in herself and Theranos, according to private text and Skype messages obtained by CNBC. The messages also showed that Holmes told Sunny Balwani about her interactions with high-profile investors.
• Facebook is underreporting ad performance on iPhones, partly because of Apple's privacy changes, its VP of product marketing said. The company thinks it's underreporting iOS web conversions by about 15%.
• Coinbase wants someone with "excellent political judgment," and people with expertise in a few other areas like law and compliance, as part of its hiring push. The company has over 350 job opportunities listed on its website.
• Facebook's Marketplace is not as safe as it claims, according to a ProPublica investigation. The company has a few safeguards in place to protect users, but buyers and sellers have still dealt with scams, violent crime and fake accounts.
• Amazon has another HQ headache. But this one is going down in Cape Town, where plans for a new regional base are being protested because the land is claimed to be sacred.
• Apple store employees are getting a bonus. The company is giving $1,000 to retail staff members who were hired before March 31, and $500 to those who were hired after that date.
• Two tech trade groups are suing over a Texas social media law that forces platforms to carry some types of speech they wouldn't allow otherwise. The groups said companies should be able to have editorial judgment, and the law violates that right.

One More Thing

Peter Thiel's backstory

Peter Thiel was an early Facebook supporter (and still sits on the company's board), co-founded PayPal, and is a fan of Donald Trump. He's also bet on a floating city, and called Silicon Valley a "one-party state."

And there's plenty more to Peter Thiel, which you can read about in Bloomberg Businessweek reporter Max Chafkin's new book, "The Contrarian." It gives details on his upbringing, his years at Stanford, the founding of PayPal and Palantir, and his relationships in Silicon Valley. A good weekend read to learn about one of the most powerful — and perhaps controversial — people in tech.

A MESSAGE FROM ALIBABA

The future of retail is digital, experiential – and happening now in China. U.S. businesses are going digital and using Alibaba to create immersive experiences to sell to the 900 million Chinese consumers on Alibaba's ecommerce platforms.

Learn more

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