Facebook says it expects its investment in the metaverse to reduce its profits by ‘approximately $10 billion’ this year

• Facebook expects investment in Facebook Reality Labs to cut overall operating profits by some $10 billion this year.
• The unit will focus on Facebook's metaverse ambitions.
• "The metaverse is going to be the successor to the mobile internet," CEO Mark Zuckerberg said.

Facebook will be pouring resources into its Reality Labs project – which is working on the social media giant's metaverse ambitions – to the tune of at least $10 billion, it said.

"We expect our investment in Facebook Reality Labs to reduce our overall operating profit in 2021 by approximately $10 billion," said David Wehner, Facebook's said in the company's earnings release on Monday.

"We are committed to bringing this long-term vision to life and we expect to increase our investments for the next several years," he added.

The metaverse refers to shared virtual spaces that people can access via the internet using virtual reality and augmented reality devices.

Facebook CEO Mark Zuckerberg has been pushing the buzzword into the mainstream, with the company reportedly going as far as planning to change its name to reflect its focus on the concept. But it acknowledged there would be no payoff in the short-term.

"This is not an investment that is going to be profitable for us any time in the near future," Zuckerberg told analysts, according to Reuters. "But we basically believe that the metaverse is going to be the successor to the mobile internet."

The social media giant will also start publishing the financial results of Facebook Reality Labs as a separate unit.

The developments come as Facebook warns of "significant uncertainty" in the next quarter "in light of continued headwinds from Apple's iOS 14 changes, and macroeconomic and COVID-related factors," it said in the earnings release.

Apple introduced privacy changes earlier this year that required app developers to ask users for permission before tracking them, a move that has impacted advertisers.

Facebook's total revenue rose to $29.01 billion in the third quarter from $21.47 billion a year ago, missing analysts' expectations of $29.57 billion in revenue.

Facebook's earnings were released on the same day over a dozen news outlets published reports based off Facebook documents leaked by whistleblower Francis Haugen, putting intense scrutiny on the social media giant. The documents - known as the Facebook Papers - revealed controversial practices at the company, including how it ranks countries into different tiers to decide on how to moderate content.