This is something that people can claim to know from hindsight. When Facebook acquired it, Instagram was a photo sharing app that had 13 employees.
“There are network effects around social products and a finite number of different social mechanics to invent. Once someone wins at a specific mechanic, it’s difficult for others to supplant them without doing something different.”
“One way of looking at this is that what we’re really buying is time. Even if some new competitors springs up, buying Instagram, Path, Foursquare, etc now will give us a year or more to integrate their dynamics before anyone can get close to their scale again. Within that time, if we incorporate the social mechanics they were using, those new products won’t get much traction since we’ll already have their mechanics deployed at scale.”
Forty-five minutes later:
“I didn’t mean to imply that we’d be buying them to prevent them from competing with us in any way,”
Isn't what matters in the end is whether there is still an effective market left as a result?
It seems that Mark himself is arguing that by the nature of the network effects of social media, first movers have a natural monopoly advantage that's hard to break.
The regulators should be focusing on that - ie enforcing rules which limit the monopoly advantage due to network effects.
Take the telecomms space - if somebody got first mover on a phone system and it wasn't interoperable with any others - then once established they would have a monopoly. The way you break that is to force interoperability - not allow companies to use access to the network as a competition barrier.
An example in the Meta space - as far as I can tell it was not possible for me to send a message to somebody in Whatsapp without going via whatsapp - ie there is no network access from a different app.
This appears to be exactly what the EU is focussed on - enforcing interop.
https://engineering.fb.com/2024/03/06/security/whatsapp-mess... https://en.wikipedia.org/wiki/Digital_Markets_Act
The top reply to the top comment has some useful quotes for the purposes of this discussion...
> This is not going to be one of the best tech acquisitions of the next decade.
> Instagram is a photo service in a sea of other photo services.
> Bookmark this comment. See you in 2022.
Heh.
How about Google People? [1]
https://googleblog.blogspot.com/2010/02/introducing-google-b...
1. bullish 2. bullish 3. neutral 4. neutral 5. neutral 6. neutral 7. bullish 8. bearish 9. bearish 10. neutral
Of the top top-level comments, you have to go all the way to #8 to find a bearish comment.
Replies to the top comment are more bearish because they're directly responding to a bullish sentiment.
- Larrys 2012
This case is particularly wrong, as that iPod quote is from Slashdot. HN didn’t even exist in 2001.
https://slashdot.org/story/01/10/23/1816257/apple-releases-i...
FaceBook was literally collecting data on what apps people were using on their phones and empirically saw the rise of Instagram. Of course the rise of Instagram didn't need to continue but that's why you buy all the realistic competitors so even if most of them fail you have a moat of dead companies.
We don't seem to spend half as much energy taking major news outlets to task when they similarly guess wrong, unless we feel that somehow adding a question mark negates any responsibility (i.e. "The Ouya will revolutionize gaming" vs. "Will the Ouya revolutionize gaming?").
The top comment compares it to YouTube as a great acquisition.
If everyone knew, why was the purchase allowed?
Not sure anyone thinks thats true at all.
(WhatsApp only had, like, 50 employees when FB bought it for $19B, as a bit of evidence that headcount isn’t necessarily a measure of value.)
I believe intention and behaviour matters much more to antitrust than simply continuing to be a dominant market leader by smartly staying on top of what the public wants. Google search doing horizontal integration into Android and Chrome to cut off competition's market entry points at lower levels is far more plausible antitrust narrative IMO.
Since it didn't happen it's pretty moot to the discussion. M&As with massive market consolidation like that get challenged all the time in courts so it's hard to say what would have happened then.
FTC investigated the Instagram purchase in 2012 and chose not to interfere.
So failed acquisition doesn't make buying Instagram inherently an anticompetitive move, just maybe can be spun as their strategy at the time, but a decade later the market still has plenty of players so it will be a tough case to make. Although even a failed case gives the government leverage over Meta with threats of future ones so they might not care.
The FTC investigation specifically had a condition that they would reevaluate the acquisition in coming years. This was widely expected to be done, and everyone knew about it at the time of the acquisition.
The actual simple photo sharing site was Flickr.
Instagram was seen from the start as a SNS with photo sharing as a pretense. The other SNS were already photo centric either way.
I'm more concerned with YouTube owning all of social video. Movies are on a dozen streamers. Social stuff is on Instagram, TikTok, Reddit, and X. But video essays, independent animation, educational content, cultural critiques, music, video podcasts, trailers, gameplay, research, news - anything long form, serious, interesting - it's all trapped on YouTube as the only distribution platform. And they'll keep getting bigger with no possible alternative due to network effects.
I'm even more concerned with Amazon being a conglomerate [1] that is in online sales, hyperscaler infrastructure, consumer hardware, home automation systems, grocery stores, medicine, primary care, and movie production. And that they can leverage these synergies in grossly unfair ways.
I'm most concerned that the Apple / Google duopoly in mobile, web, and search has entrenched these two players across the vast majority of online transactions, interactions, and computational device usages. They collect margin on everything. They own your devices, they own search, they own the web, they own the apps, they have to be paid off to rank your business, have to be paid off to collect money, they regulate what you can do with your apps and websites, etc. etc. You jump through their hoops. This is their internet.
[1] Especially given the fact that Amazon can subsidize their efforts in these areas from profits in other business units and out-compete viable businesses in those markets. They can offer goods for free with an existing subscription and advertise far and wide across their retail website, plastered on their packaging, and emblazoned on the side of their delivery vehicles. Lord of the Rings got an 80 million dollar advertising package for free, whereas Bong Joon Ho's far more deserving film got next to nothing.
I think everybody on hackernews gets it. We're all pretty much on the same page.
Ain't nobody able to do anything about it though.
it is concern for someone outside western hemisphere, in Asia especially META dominance is even stronger
Yes, but: despite all of us adblocking them, this is all supported by their ad revenue.
The discovery effect is simply too powerful. I can't really see a way out of this because people are not going to go back to paying for media. Possibly the only way is something like the increasing control of social media from the EU forcing a separate EU Youtube, which might include things like the French TV rules forcing a certain amount of content to be in French, plus control over foreign disinformation influencers.
(you know what the only other social video platforms are with millions of users? Bilibili, xiaohungshu etc.)
Sure, but it was a serious threat to Facebook with hordes of especially younger people moving away from FB in favor of more activity on Instagram, which at that time had evolved from "just" a photo making/sharing app to a social network.
Any one of them could have taken off and eaten facebook's lunch. Instagram was the winner in a sea of camera apps because facebook threw unlimited resources into the hip app of the moment.
And growing quickly, so:
> In his opening remarks, Mr. Matheson mentioned documents, including what he described as a “smoking gun” February 2012 email in which Mr. Zuckerberg discussed the rise of Instagram and the importance of “neutralizing a potential competitor.” In another email, in November 2012 to Ms. Sandberg, the chief operating officer at the time, Mr. Zuckerberg wrote, “Messenger isn’t beating WhatsApp, Instagram was growing so much faster than us that we had to buy them for $1 billion.”
> The F.T.C. showed Mr. Zuckerberg a 2011 email in which he wrote, “We really need to get our act together quickly on this since Instagram is growing so fast.”
* https://archive.is/https://www.nytimes.com/2025/04/14/techno...
> It’s a combination of neutralizing a competitor and improving Facebook, Zuckerberg said in a reply. “There are network effects around social products and a finite number of different social mechanics to invent. Once someone wins at a specific mechanic, it’s difficult for others to supplant them without doing something different.”
> Zuckerberg continued: “One way of looking at this is that what we’re really buying is time. Even if some new competitors springs up, buying Instagram, Path, Foursquare, etc now will give us a year or more to integrate their dynamics before anyone can get close to their scale again. Within that time, if we incorporate the social mechanics they were using, those new products won’t get much traction since we’ll already have their mechanics deployed at scale.”
> Forty-five minutes later, Zuckerberg sent a carefully worded clarification to his earlier, looser remarks.
> “I didn’t mean to imply that we’d be buying them to prevent them from competing with us in any way,” he wrote.
* https://www.theverge.com/2020/7/29/21345723/facebook-instagr...
Facebook knew what it was doing and the emails plainly reflect that