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Photo Illustration: Eniola Odetunde/Axios. Photos: Picture Alliance, Amy Osborne/Getty Images

Year-end sales numbers are telling Facebook executives that their big bet on hardware is starting to pay off.

Driving the news: Facebook's hardware team found itself just where it hoped to be for the holiday shopping season: under the Christmas tree, with both Quest 2 VR systems and Portal smart screens delivering better-than-expected sales.

Why it matters: Hardware isn't where Facebook makes its money, but homegrown devices are key to its strategic future.

  • When Facebook builds a device, it has much more control over the experience, and the business, than when it creates software to run on other companies' devices — particularly those made by Apple, with whom the company is increasingly at odds.

Facebook hardware chief Andrew Bosworth, a longtime executive known for frank assessments of Facebook's wins and missteps, told Axios he was encouraged that it took just seven weeks in the market for the Oculus Quest 2 to surpass the original Quest in terms of active monthly users.

  • "The curve has a really nice shape to it," said Bosworth, who cites the data in a post going live today.
  • Observers also noted that the Oculus app was near the top of the iOS download charts just after Christmas. (A spike in app downloads is often a good indicator of how many people just got new hardware for the holidays.)

"Christmas Day unboxing was a fun day for us," Bosworth said.

  • Facebook also built enough of the new Oculus to avoid the shortages that plagued the first Oculus Quest through much of 2020.

The big picture: Bosworth isn't sharing hard sales numbers. He said they're less important to Facebook right now than ensuring developers can finally make money building apps for VR.

  • "For a long time, VR has been a leap of faith for developers," he said. "We now have lots of successful profitable VR developers."

Bosworth recalled a comment Bill Gates made while visiting Facebook: In order for a platform to be a success, according to Gates, the companies who build on top of your product have to make more money than you do from selling it.

Of note: The VR category is finally breaking past the hardcore gamer set, which tends to be dominated by men.

  • "The number of women in VR is growing. It's bigger than people realize," Bosworth said.

That makes a difference for Facebook's long-term ambition to turn virtual-reality environments into places for social interaction.

  • Too many dudes, and the experience seems more like an episode of "Silicon Valley" than a night at a hip club or bar.

Facebook's Portal "had a huge Christmas too," Bosworth said.

  • The smart display line has added support for Zoom, WebEx and other work video conferencing apps in recent months.
  • Bosworth said most Facebook employees have the devices, which helps the company provide good support for new apps.
  • One factor behind Portal growth, he adds, is that consumers buy them in multiples — so, for example, a grandparent can easily communicate with a grandchild.

What's next: One of Facebook's big product debuts this year will be smart glasses it's making in partnership with Ray-Ban's parent company.

Go deeper

App rush: Talent over trash

Data: Knight First Amendment Institute at Columbia University. Chart: Michelle McGhee/Axios

Amid the sea of pollution on social media, another class of apps is soaring in popularity: The creators are paid, putting a premium on talent instead of just noise.

The big picture: Creator-economy platforms like Patreon, Substack and OnlyFans are built around content makers who are paid. It's a contrast to platforms like Facebook that are mostly powered by everyday users’ unpaid posts and interactions.

Jan 29, 2021 - Technology

Facebook developing a tool to help advertisers avoid bad news

Photo Illustration: Avishek Das/SOPA Images/LightRocket via Getty Images

Facebook on Friday said it's testing new advertiser "topic exclusion controls" to help address concerns marketers may have that their ads are appearing next to topics in Facebook's News Feed that they consider bad for their brand.  

Why it matters: As Axios has previously noted, the chaotic nature of the modern news cycle and digital advertising landscape has made it nearly impossible for brands to run ads against quality content in an automated fashion without encountering bad content.

Jan 29, 2021 - Technology

Big Tech is outsourcing its hardest content moderation decisions

Illustration: Aïda Amer/Axios

Faced with the increasingly daunting task of consistent content moderation at scale, Big Tech companies are tossing their hardest decisions to outsiders, hoping to deflect some of the pressure they face for how they govern their platforms.

Why it matters: Every policy change, enforcement action or lack thereof prompts accusations that platforms like Facebook and Twitter are making politically motivated decisions to either be too lax or too harsh. Ceding responsibility to others outside the company may be the future of content moderation if it works.