Sure, Zuckerberg is an entrepreneurial genius who founded one of the earliest, and by far the most successful, social media companies. Billions of people use Facebook and Instagram every month, and together with Google and Amazon, Facebook dominates the digital ad market. This produces a lot of cash to invest in the metaverse. The company has promised to drop $10 billion this year on Facebook Reality Labs to develop hardware, software and content.

Yet consider that for all the panic about Facebook’s monopoly power, it increasingly looks like a company at or near its peak. Forget the Russian conspiracy theories and the document leaks; Facebook’s biggest problem is that it has been struggling with younger users for years, and now Instagram appears to be losing its youthful luster as well. If Facebook doesn’t find some way to get the youths on board, it will eventually begin to shrink. Because the value of a social media service lies in the connections it makes to other users, a collapsing user base tends to be self-accelerating. With each decline, the network becomes less valuable to remaining users.

Zuckerberg has at least avoided one mistake frequently made by companies facing disruption: refusing to sacrifice short-term profitability of the legacy business to adapt to longer-term dangers. But many companies that see the approaching catastrophe and dutifully try to adapt fail to do so.