Sandberg is echoing something we heard from Zuckerberg, her former boss, over the past few days. These execs argue that consumers seeing more ads in Meta’s apps doesn’t mean the experience is getting worse. Sandberg says ads in features like stories are not very intrusive, and Meta can tell users are still having a good experience based on whether they stop and engage with the ads.
She’s being questioned by Meta’s attorney now, and we’re hearing about her experience working on Google’s advertising business in the early 2000s.
The then-COO had told Zuckerberg in 2012 she thought they were paying too much to acquire Instagram. In retrospect, she testifies, “I was wrong. Like, very wrong.” No one today would say they paid too much for Instagram, she adds, before leaving the stand for the day. We expect she’ll continue her testimony tomorrow.
Sandberg says that network effects — the idea that having more connected users on a platform can make it more valuable — have not done much to help it outcompete rivals in recent years. She points to the popularity of TikTok, which serves content largely from people you already know, and says that “the network effect of having a friends and family graph was much less important over time.”
The FTC is showing Sandberg a 2018 board presentation from soon after the news of the Facebook Cambridge Analytica data scandal broke. Despite a decline in the perceptions users had of Facebook, the company reported to its board that there had been “no visible impact to core engagement metrics” globally or in the US to metrics like time spent.
That’s how Sandberg remembers the discussions leading up to the acquisition. She also acknowledges that Facebook eventually ended its own photos app project after acquiring Instagram.
In a 2011 email, Sandberg told colleagues that Google’s social network meant that “for the first time, we have real competition and consumers have real choice.” She wrote that it would mean “will have to be better to win, our margins may go down over time, we will no longer be able to make as many mistakes and hold onto our core users.” Sandberg testifies she was concerned because Google “created almost an exact replica” of Facebook.
She’s the second witness in the case, and will likely be here for several hours.
The CEO spent around 13 hours testifying over the past three days and he’s finally finished. We heard about his wild ideas for Meta throughout the years, as well as how he views the social media market, and his mindset leading up to his consequential acquisitions of Instagram and WhatsApp, the central focus of the case.
The CEO testifies that it was reasonable for him to take a more assertive role in scaling advertising on Instagram several years post-acquisition. Early on, he says, Instagram co-founder Kevin Systrom “wanted to personally approve every ad that went on Instagram himself.” And while Zuckerberg was initially “happy to oblige,” he says it later made sense to make the app bear more responsibility for generating revenue.