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Meta Announces First-Ever Bond Offering Amid Push to Invest in Virtual Reality Projects

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Facebook-parent Meta said on Thursday it would make its first-ever bond offering, at a time when the social media company is making massive investments to fund its virtual reality projects. Meta did not disclose the size of the offering but said it would use the proceeds for capital expenditures, share repurchases, acquisitions or investments.

The company received an ‘A1’ rating from Moody’s and an ‘AA- rating’ and a ‘stable’ outlook from S&P. Meta is selling four tranches of bonds with maturities ranging from five years to 40 years.

Among big technology companies, Meta is the only one that does not have any debt on its books. Tapping the market now would give it more financial room as it tries to fund some expensive overhauls, including a bet on augmented and virtual reality technology, investors who heard its presentation for the bond offering on Tuesday said.

It might also be a rare opportunity to do so relatively cheaply in the current market environment. Corporate bonds have rebounded in the past month after a rout earlier this year, as investors hoped the US Federal Reserve’s fight against inflation through rapid rate increases was starting to have some impact.

This week the US investment grade primary bond markets have rebounded, with companies raising more than $38 billion (roughly Rs. 3,01,000 crore), making it the eighth busiest week of the year, according to Informa Global Markets data.

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Other tech giants such as Apple and Intel also issued bonds earlier this week, raising $5.5 (roughly Rs. 43,600 crore) billion and $6 billion (roughly Rs. 47,500 crore), respectively.

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Bankers and investors said such issuance windows may be rare in coming months. One banker in charge of a bond syndicate desk at a US bank said credit spreads could widen later this year, increasing funding costs.

Meta’s bond issuance will come after the company issued a gloomy forecast and recorded its first-ever quarterly drop in revenue, with recession fears and competitive pressures weighing on its digital ads sales.

Its free-cash flow has been depleting as it charges ahead with its metaverse plans, which led the change in its name to Meta from Facebook last year.

In the second quarter ended June 30, Meta had $4.45 billion (roughly Rs. 35,200 crore) in free cash flow, compared with $8.51 billion a year ago (roughly Rs. 67,400 crore) and $8.53 billion (roughly Rs. 67,600 crore) in the prior quarter.

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Chief Financial Officer Dave Wehner said on a post-earnings conference call that company had a “substantial amount” in its buyback program and expects to continue with buybacks as part of its capital allocation strategy.

© Thomson Reuters 2022


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Biden Administration Tells US Supreme Court Section 230 of Communications Decency Act Has Limits

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The Biden administration argued to the US Supreme Court on Wednesday that social media giants like Google could in some instances have responsibility for user content, adopting a stance that could potentially undermine a federal law shielding companies from liability.

Lawyers for the US Department of Justice made their argument in the high-profile lawsuit filed by the family of Nohemi Gonzalez, a 23-year-old American citizen killed in 2015 when Islamist militants opened fire on the Paris bistro where she was eating.

The family argued that Google was in part liable for Gonzalez’ death because YouTube, which is owned by the tech giant, essentially recommended videos by the Islamic State group to some users through its algorithms. Google and YouTube are part of Alphabet (GOOGL.O).

The case reached the Supreme Court after the San Francisco-based 9th US Circuit Court of Appeals sided with Google, saying they were protected from such claims because of Section 230 of the Communications Decency Act of 1996.

Section 230 holds that social media companies cannot be treated as the publisher or speaker of any information provided by other users.

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The law has been sharply criticised across the political spectrum. Democrats claim it gives social media companies a pass for spreading hate speech and misinformation.

Republicans say it allows censorship of voices on the right and other politically unpopular opinions, pointing to decisions by Facebook and Twitter to ban dissemination of a New York Post article about the son of then-Democratic candidate Joe Biden’s adult son, Hunter, in October 2020.

The Biden administration, in its filing to the Supreme Court, did not argue that Google should be held liable in the Gonzalez case and voiced strong support for most of Section 230’s protections of social media companies.

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But the DOJ lawyers said that algorithms used by YouTube and other providers should be subject to a different kind of scrutiny. They called for the Supreme Court to return the case to the 9th Circuit for further review.

Attorneys for Google could not be reached for comment on Wednesday night.

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© Thomson Reuters 2022


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WhatsApp Avatar Feature Rolling Out to Users With Support for 36 Customisable Stickers

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WhatsApp has begun rolling out Avatars, a feature that allows users to make a digital representation of themselves. The Meta-owned instant messaging service previously rolled out the Bitmoji-like feature to beta testers on Android and iOS. The feature which is now making its way to all users as part of a full-scale rollout, will allow users to curate their digital representation or personal avatar from a combination of hairstyles, facial features, and outfits, according to the company. WhatsApp will also provide 36 custom stickers that reflect different emotions and actions.

The instant messaging platform announced the new Avatars feature via a blog post on Wednesday. A user can set an Avatar as their WhatsApp profile photo, or use them as stickers. Meta says that these stickers will be available in 36 versions of popular emojis and actions, adding that avatars could provide users “a fast and fun way to share feelings with friends and family.”

Personalised avatars were first made popular on social media by Snapchat which now owns Bitmoji which was initially created by Bitstrips. Instagram, which is also owned by Meta, previously added support for Avatars, just like Facebook and Facebook Messenger.

WhatsApp’s support for Bitmoji-like 3D avatars appears to be the same set of models that are available on other Meta-owned apps. Facebook was the first amongst the Meta family to be introduced to Avatars through Messenger and the News Feed in 2019. A year later in 2020, the company added support for adding these digital avatars on Facebook comments and stories.

The company intends to serve Avatars as a mode for fun and creative expression as well as a privacy feature. Avatar can be a “great way to represent yourself without using your real photo so it feels more private,” added the company blog post.

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Users may access the Avatars feature by updating their WhatsApp to the latest version and navigating to Settings > Avatar > Create Your Avatar.

WhatsApp is also promising to bring future enhancements in the form of lighting, shading, hairstyle textures, and more that will improve the experience.

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The feature was previously tested with a few beta testers on WhatsApp beta version 2.22.23.9 for Android, about a month before it was eventually rolled out to all users.


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Instagram to Inform Creators When Posts Are Blocked From Being Recommended to Other Users

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Instagram, the Meta-owned photo and video-sharing social networking service, will now tell users if a post they have uploaded will not be recommended to other users. Instagram’s Head recently announced that the service will show creators and businesses if their posts are being blocked from appearing in certain parts of the app. Users and businesses will reportedly be able to appeal blocking of users posts from being recommended to other users on the service.

According to a tweet by Instagram Head Adam Mosseri, professional accounts on the photo and video-sharing service can now check if any of their posts are blocked from being recommended to users who don’t follow them. The feature to check the status of post recommendations can be accessed via the settings menu, under Account > Account status.

✅ Account Status Update ✅

We’re expanding Account Status so professional accounts can understand if their content may be eligible to be recommended to non-followers.

Here’s how to get to it: Profile -> Menu -> Settings -> Account -> Account Status pic.twitter.com/QbxjQF06vR

— Adam Mosseri (@mosseri) December 7, 2022

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Instagram shows users recommendation in places like the explore page and home feed. These recommendations are posts from accounts not followed by a user. Instagram is also facing increasing competition from rivals such as TikTok, which has grown in popularity in the US and other markets this year.

Meta reportedly has plans to more than double the amount of recommended content users see on the app by the end of next year.

In order to be eligible to appear on Explore and other places, Instagram posts must follow the platform’s Community Guidelines and rules around recommended content, according to the company.

For example, Instagram allows users to post content depicting violence, but the service may block those posts from being suggested to other users, which would reduce their reach. However, creators and businesses will reportedly be able to edit, delete, or appeal Instagram’s decision on posts flagged as being ineligible for recommendations.


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