> Why are we assuming that short term changes in share price
I don't think the parent is making a strong claim in this direction, moreso that Facebook/Meta has very few new innovations and prefers to acquire them.
Other companies are also quite profitable or have strong market caps but are also not innovating and prefer to acquire new innovations (Oracle being a prime example).
> moreso that Facebook/Meta has very few new innovations and prefers to acquire them.
This isn't unique to facebook/Meta though: plenty of companies switch more toward the acquisition of innovation than the creation of it. Microsoft was like this for a long time. Apple, Google, and Amazon have also made their fair share of acquisitions over the years.
Introducing new products/value propositions is hard, even in adjacent markets, and most will fail. It's often easier to acquire something instead once you reach the point where you can afford to do so.
I read the comment as being critical of Facebook. "Not being able to innovate" seems like a critical statement, indicating a failure on their part. However, they are an incredibly successful company. If Facebook is successful not innovating, why would they want to hire innovators? Their hiring process should be specifically geared towards hiring the people that will execute the way Facebook wants to execute. Given that, they seem to have a successful hiring process.
> If Facebook is successful not innovating, why would they want to hire innovators?
There's a larger question that I'm still trying to work out.
Meta has something like 71K employees at this point and spends over $21B a year in research and development.
They don't give head counts for how many personnel are performing R&D work, but if you assume that most of their R&D costs go to employee salaries and that the mean salary at Meta is around 500K, it looks like at least half of their workforce is engaged in R&D.
What are they getting for this investment? Instagram, WhatsApp, and Oculus were all acquisitions. Facebook Messenger came out in 2008.
I get that some of them are working to optimize their advertising revenue stream. Does this require 20-30K+ highly qualified engineers and support FTEs?
Something else is going on. My guess is that it's a form of Parkinson's Law, only with IT engineers instead of British civil servants.
> I've been dabbling in AI recently, and I keep seeing FB's name appear all over the place. They were associated with some work that wrote human readable instructions on how to cook something- given only a list of ingredients. I have no idea why they are interested in cooking, but there logo was watermarked on every page of the deck. I've also read how they are building a really big and fast computer cluster to do ML. I don't know what they are doing on it, but they probably doing some R and some D. So, yeah, I have FB on my list of innovators.
Don't get me wrong. There's a lot of innovation going on at Facebook. That's guaranteed to happen when you have as much talent as they do.
Why isn't it translating over to their core business? Why do they have to continue to acquire companies (e.g., Oculus) to have potential areas for growth?
It doesn't make any sense. They would have more significantly success if they simply took half of their engineers, organized them into teams of 3-4 people, and gave each team $1-2M in startup capital VC style. Let's say they can create 2.5K teams. This would cost them $2.5B - $5B, or about than one tenth of what they spent last year in stock repurchases.
I've been dabbling in AI recently, and I keep seeing FB's name appear all over the place. They were associated with some work that wrote human readable instructions on how to cook something- given only a list of ingredients. I have no idea why they are interested in cooking, but there logo was watermarked on every page of the deck. I've also read how they are building a really big and fast computer cluster to do ML. I don't know what they are doing on it, but they probably doing some R and some D.
This isn't relevant to the question you raise - but as an accounting matter - plenty of "keep the lights on" type engineering work is almost certainly identified as R&D in those figures. I suspect there is much smaller amount going to what most people would consider more transformative innovation or basic/applied research.
This seems like the perennial HN "I could build this app with 5 engineers" comment. Every visible FB feature (NewsFeed ranking, ads, Marketplace, ...) has a team, as well as less visible ones like Infra and Trust & Safety. Multiply that by all the different apps you've mentioned, and add people working on the new Metaverse, and 20-30K doesn't seem unreasonable.
>>If Facebook is successful not innovating, why would they want to hire innovators?
These companies have one cash cow business, and they want to hire the best people they can to keep the lights on. These people tend to go around selling their skills to other places who want the same.
That's pretty much all there is to it. Innovation isn't even the goal of middle management in any large people operation. If anything its the opposite, no body wants disruption in established order of things.
I don't think the parent is making a strong claim in this direction, moreso that Facebook/Meta has very few new innovations and prefers to acquire them.
Other companies are also quite profitable or have strong market caps but are also not innovating and prefer to acquire new innovations (Oracle being a prime example).