This analysis was first published in SvD Näringsliv, in Swedish, on February 2nd, 2024. This piece was translated from Swedish by Claude. Some phrasing may differ from a human translation.

After spending billions on a name change and peculiar 3D avatars, Meta appears to have found a new strategy: becoming a perfectly ordinary company.

“Mr. Zuckerberg, what the hell were you thinking?”

The clip of Republican senator Ted Cruz berating Meta’s CEO, Mark Zuckerberg, went viral this week. Usually it is stuffy politicians who ask stupid questions, prompting the internet to collectively snicker at them.

Instead, Zuckerberg was dressed down during a congressional hearing on children’s online safety — and by Ted Cruz of all people. The former presidential candidate from Texas who frequently features in American comedians’ routines as the archetype of a generally dreary and useless politician.

With such an ace up his sleeve, perhaps he could afford to be put in his place for an hour or two.

Zuckerberg, however, did not look particularly shaken.

He knew what he would be talking about the day after the congressional hearing.

On Thursday evening, Meta’s quarterly report arrived — and it looked extraordinarily good. So good that the share price shot to an all-time high in after-hours trading.

Revenue rose 25 percent and net profit a full 201 percent. The number of users across Meta’s services increased. Advertising prices increased. In almost every direction, the arrows pointed up.

Meta now has so much money that it intends to buy back its own shares for 50 billion dollars — almost 520 billion kronor. It will also — for the first time in the company’s history — pay a quarterly dividend. Something that neither Amazon nor Alphabet, Google’s parent company, has ever done.

Looking back, Meta was once called “The Facebook Company,” a legacy from the first successful blue website. This was followed by acquisitions of Instagram, WhatsApp, and Oculus’s VR products. The old name no longer suited the new company that had grown out of it. And more specifically — it did not suit the vision that Mark Zuckerberg now believed was the future: the metaverse. In the future, we would all have graphical avatars meeting digitally to work and socialise. The company was renamed “Meta” in the autumn of 2021.

The company name is ultimately somewhat unimportant in the grand scheme of things, but a rebrand is typical of a leader who believes in their idea. It signals clearly — both internally and externally — that this is the new goal we are heading towards.

It is also a sign of a company starting to run out of its own ideas.

Fast forward to today, and billions of dollars have been invested without anyone caring much about the metaverse any more.

Meta continues to spend money on the division internally called “Reality Labs,” but the letter to the market also states that new AI investments will cost big money this year. We have heard that before.

What happened to the grand new idea? Where did the metaverse go?

A company that buys back its own shares and regularly pays dividends may be popular with many shareholders. But it is also a sign of a company starting to run out of its own ideas.

In a market where regulatory obstacles stand in the way of large acquisitions, Meta has had to look inward for innovation. It will almost certainly not be allowed — even if it would dearly love to — buy up competitors without regulators from both the EU and the US rushing in to block it.

The metaverse idea has not taken off — at least not yet. Instead came a wave of AI in which Meta has become a significant player. One of several, but certainly a noteworthy one. Being a tech company betting on AI in 2024 is not particularly unique, however. The headquarters of OpenAI and Google are within 45 minutes’ drive of Meta, and there is fierce competition for the best AI researchers. There is a future vision here — but Meta is far from alone in identifying it.

Zuckerberg appears, instead, to have found a new idea to build his Meta around. For now, at least. After a major comeback from when the share price collapsed in autumn 2022, it has now returned to all-time highs.

What better, then, than to do what other profitable companies do with their excess cash? Take care of shareholders. Buy back shares. Pay dividends. Become — to simplify slightly — just like any other well-run listed company.

It is an idea, good as any. But it is a long way from the visionary Meta that Zuckerberg wanted to create a few years ago.