In an internal email, as part of the Meta Antitrust test, the Meta-PDG Mark Zuckerberg has worried the potential that the company’s Instagram acquisition can cannibalize Facebook. If this happened, this could lead to “the collapse of the more engaging and more profitable product network,” Zuckerberg told other Meta leaders in a confidential message.
Zuckerberg has proposed several ways to prevent this cannibalization from occurring, in particular by creating more bridges between Meta’s applications to make them function as a single network (suggesting that Instagram contributed to the loss of cultural relevance of Facebook). He also wondered openly if Facebook would be better served by turning Instagram as a separate business.
In his trial against Meta, the Federal Trade American Commission (FTC) tries to prove that the company operates a monopoly on social networking and that its acquisition of competing applications like Instagram and WhatsApp has enabled it to maintain its dominant position on the market. As proof, the accusation surfaces emails and other messages that indicate that Zuckerberg understood the threat that Instagram posed on Facebook, even after it has become part of the largest family of Meta applications.
In an email dated May 2018, Zuckerberg explained to other Facebook leaders – notably the director of Meta -chief products, Chris Cox, now former COO Sheryl Sandberg, the former CTO Mike Schroepfer, the former growth director (now COO) Javier Olivan, and former financial director David Wehner – that he was concerned about the approach of the company.
Instagram injured Facebook’s growth
More specifically, Zuckerberg feared that Instagram’s growth could harm Facebook himself, saying that internal data show that when users have joined Instagram, their Facebook commitment “decreases considerably”.
“We are starting to get more data that suggests that this digging of Facebook use compounds is a more important percentage of the population on Instagram,” said Zuckerberg in a section of the e-mail entitled “Cannibalization and the collapse of the network.”
The more the company pushed Instagram’s growth, the more the Instagram threat posed on Facebook, Zuckerberg seemed to conclude.
“This raises the problem that our models for the future could be false,” said Zuckerberg. “We are currently expecting that Facebook and Instagram can grow, but it seems that this is the case that if we promote Instagram as being about the same size as Facebook, this will have significant negative effects on Facebook that we are not currently modeled,” he wrote. “That is to say, the Facebook network can probably maintain a decrease in engagement among some of its members, but if the commitment among its whole population is hollowed out, this can lead to clearly worse results than what we are currently expecting,” said Zuckerberg.
He also said that Instagram’s growth was mainly driven by the distribution of the Facebook application and its use of Facebook’s Facebook graphic.
“What it suggests is that, even if we hope to develop two products, there is a real chance that we can cause a collapse of the product network more engaging and more profitable to replace it with the less engaging and less profitable,” said Zuckerberg.
Consequently, he said that Facebook reduced his promotions to Instagram and that Instagram should introduce new integrations that would make the balance towards Facebook instead. He explained that he wanted the bridges to be built between the two networks so that the applications “work more and more as a single network with more respect”.
For example, Zuckerberg stressed that it should be easier for video creators with a general public to get involved more easily on both applications. In addition, he wanted to combine vocal and video call networks through WhatsApp, Messenger and Instagram to become a single network. (Meta finally introduced multiplatform messaging in 2020, before bringing it back for years later.)
Family applications strategy in relation to a spin-out
In particular, Zuckerberg also called the difficulties in building new products and services in Instagram and WhatsApp due to “their founding leadership”.
He deplored that management cannot openly discuss his concerns about Instagram in particular, because it could demoralize the team and prevent the company from keeping the co -founders of Instagram, Kevin Systerom and Mike Krieger.
He also put pressure for the company to rethink its product brand, so that the Facebook brand stayed in the center.
“When you open these applications, he would say” Instagram by Facebook “and” WhatsApp by Facebook “,” offered Zuckerberg in his e-mail. “We may even have to put the Facebook brand in the chrome of these applications where application names and logos are today to cement this relationship in the minds of people.”
Zuckerberg put pressure on Meta to re -enantan her brand so that Facebook stayed in the center.
In 2021, Facebook rather renamed Meta, whose logo now appears on all the applications of the company.
If the FTC wins its case, Meta may have to transform Instagram and WhatsApp as a distinct business. Ironically, it is something that Zuckerberg himself suggested in his 2018 email as an alternative strategy-and perhaps the “only structure” to achieve the objectives of the company. Instagram spinning mill could preserve Facebook’s growth, concentrate Meta teams and allow the company to keep Systrom, wrote Zuckerberg. (The founders of Instagram left later the same year, in September 2018.)
In the end, Meta chose not to transform her acquisitions. But Zuckerberg had warned the other managers of the email that there is a “non-trivial chance” that Meta could be forced to transform Instagram and WhatsApp over the next 5 to 10 years, making all his work a family of applications “something that we cannot keep”.
If the FTC succeeds in court, Zuckerberg will be proven.
Meta minimized the magnitude of these emails in a shared declaration with Techcrunch.
“Context documents and old on the context on the acquisitions that were examined by the FTC more than a decade will not obscure the realities of the competition we face or overcome the weak case of the FTC,” said a Meta spokesperson.
