Sunday, January 17, 2021

Mark Zuckerberg’s Blue Christmas | WIRED

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After this experience, Facebook spent blood and endless treasures to identify upstarts who invented something that Facebook does not have do, then try to buy them. Ironically, Zuckerberg found himself approaching the founders with an eerily similar proposition that he fiercely resisted in 2006 – a ton of money in return for giving up the dream of becoming an independent power. He conquered Instagram and WhatsApp not only by making huge preemptive offers, but by promising that while funneling resources into their operations to help them grow, he would grant them independence.

Antitrust filings accuse Zuckerberg of making these purchases for defensive purposes, to prevent the aforementioned transformation that could one day call into question its flagship product. Surprisingly, after buying them, he again didn’t want them meddling with Blue, although that would arguably make the entire Facebook business more valuable and empower the founders to be as creative as possible. In this 2019 interview with me, he explained that he doesn’t want his different properties to develop similar functionality.

Except, apparently, when it would help Facebook Blue, the one app Zuckerberg wanted everyone to use. When Instagram launched its Stories feature (itself stolen from Snapchat, a company where Zuckerberg’s acquisition push failed), Zuckerberg was so impressed with its success that he integrated it into Facebook Blue. Meanwhile, even as Instagram and WhatsApp properties flourished under his ownership, Zuckerberg was reluctant to let them flourish on their own. For example, despite the objection of the founders of WhatsApp, it removed the $ 1 per year subscription fee to the service. If it had kept it, WhatsApp could have helped Facebook develop a paywall-like model as an alternative to its advertising model, which relies on compiling a frightening record of data on its users.

The idea that other estates would fulfill the noble destinies of an independent leader was not on the table. Following the departure of the founders of Instagram and WhatsApp, Zuckerberg did not allow his successors to qualify as CEOs of these properties, a limitation that symbolized their limited status.

Ironically, Zuckerberg’s buy-and-drag strategy has taken Facebook to a point where government lawsuits could breach its defenses. The FTC has explicitly requested that Instagram and WhatsApp be removed from control of Facebook. And even if this drastic cure does not materialize, it is almost certain that Facebook will be forced into any attempt to buy the next hot social network. Under its current scrutiny, Facebook could never get approval to buy its current biggest rival, TikTok, regardless of the price.

Expect Zuckerberg and Facebook to fight to the end (or agree to painful settlement terms) to keep Instagram and WhatsApp in-house. Not because he loves them. But because it’s the moat that protects its once impermeable castle, Facebook Blue.

Time travel

In Facebook: the inner storyI write at length about Facebook’s efforts to buy off potential rivals. (I suspect there are a few well-leafed copies at the FTC and the New York State Attorney General’s Office.) One of the most dramatic interviews I have conducted for the book was with the WhatsApp co-founder Brian Acton. Facebook’s purchase of his business made him fabulously rich – but he now sees it as a shameful surrender:

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