Schultz says he “quibble[s]” with the idea that Instagram had good engagement pre-acquisition. “I didn’t think it had the highest engagement when I got to see the numbers when it was inside,” he says.
The FTC’s theory that Meta’s power is only constrained by these two apps is “ridiculous,” Schultz testifies, concluding his examination by Meta’s attorney.
Creating a social graph of users’ friends, likes, and interests isn’t as meaningful for social apps as it used to be, Schultz says. That’s thanks to advances in AI, which has made it easier to predict and serve content to users they might not have even known they’d like. The FTC says Meta’s network effects and extensive mapping of users’ connections makes it difficult for upstarts to dislodge it.
Had Meta never bought the app, Schultz says Instagram would have continued to copy Twitter. “I think Twitter had a less effective growth team than us,” he says.
After a brief dip in Instagram’s growth rate in 2018 due to changes in how Facebook promoted it, the app’s growth rate recovered and continued to go up and to the right, a chart shown in court shows. Schultz says the results mean the change wasn’t as dire as Systrom might have believed.
For all the tension that came from Facebook’s decision to promote Instagram less from its app, it wasn’t all that consequential for Instagram’s growth in the end, Schultz testifies. Instagram’s growth rate dipped 14 percent, but it was still growing users overall. Ultimately, Schultz says, it was a “blip.”
Schultz acknowledges there was tension between his central growth team and Systrom in the mid-2010s, which we heard about from Systrom’s perspective a few weeks ago. While Systrom described a situation where Meta pulled back growth staff for Instagram, Schultz says Systrom was uninterested in the tweaks his team suggested to grow the app. It was only after the growth team pulled back from Instagram that Systrom realized their value and wanted them back, Schultz recalls.
The FTC is expected to wrap up its case this week, meaning Meta will then get the chance to call its own witnesses for its case-in-chief. Meta CMO Alex Schultz is back on the stand testifying about the staffing and expertise the company gave Instagram after its 2012 acquisition. He says that for the first three to four years post-deal, Meta gave Instagram co-founder Kevin Systrom pretty much “everything he wanted.”
Schultz says when he took on the task of leading the company’s brand reputation, it was like “catching a falling knife.” But things have since gotten better. He says relative brand sentiment for Meta falls somewhere in the middle of other companies it measures against, putting it pretty close to the bank that in 2020 settled a criminal investigation with the US government over alleged fraud.