In January 2013, Zuckerberg said he thought his team “should block WeChat, Kakao and Line ads. Those companies are trying to build social networks and replace us. The revenue is immaterial to us compared to any risk.” On the stand, he acknowledges that “we worried about them broadly competing with us” ahead of his purchase of WhatsApp.
Zuckerberg concedes that in a perfect world, he probably would have preferred Facebook’s in-house Instagram competitor to succeed so that he didn’t have to shell out for Instagram.
“$1 billion is very expensive,” he says.
We got a brief glance into some more casual conversation between Zuckerberg and his then-COO Sheryl Sandberg. “I want to learn settlers of catan too so we can play,” Sandberg messaged her boss in November 2012. “I can definitely teach you Settlers of Catan,” Zuckerberg replied. “It’s very easy to learn.”
The Meta CEO is testifying about a February 2012 exchange with then-CFO David Ebersman, who said one (potentially bad) reason to buy a company is to “neutralize a potential competitor.” Seeming to ignore Ebersman’s opinion, Zuckerberg said that was one of the reasons he’d actually consider buying Instagram.
On the stand, Zuckerberg says that when you buy a company, you’re obviously taking a competitor off the market, but he thinks Meta maximized Instagram’s value.
The antitrust trial started with hours of Mark’s testimony, while Meta and the FTC squabbled over defining the market.
The government just posted slides from its opening statement. They give a good roadmap of who we’ll hear from in the coming weeks. The presentation also previews some of the internal Meta documents we’ll see and how the FTC thinks it can win its case.
[ftc.gov]
In a February 2012 message, Mark Zuckerberg floated the idea of acquiring Instagram but not doing much with it so that new competitors wouldn’t creep into the market. On the stand, Zuckerberg deflects this as early thinking and says Facebook ultimately didn’t take this route. The FTC’s attorney points out that this was only a couple of months before the acquisition. From Zuckerberg’s message at the time:
“By not killing their products we prevent everyone from hating us and we make sure we don’t immediately create a hole in the market for someone else to fill but all future development would go towards our core products.”
Zuckerberg is walking through his mindset in February 2012 when he was considering acquiring the rapidly growing photo app. He asked colleagues if a purchase might be worth it even if it costs $500 million. “Theoretically we could go build this technology, but I’m worried we’re so far behind,” he wrote. Zuckerberg testifies he was considering this move ahead of their IPO when, for the first time, the company would have money to consider buying some products.
The FTC is pointing to internal messages from 2011 where Zuckerberg complained that the company was moving too slow on its Facebook Camera app while Instagram was growing rapidly. It turns out, according to messages from other executives at the time, that this was in part because Facebook had interns working on the critical project, rather than more experienced engineers.
There are no fireworks yet. The government is working to elicit answers that might help it establish its view that the relevant part of the social media market Meta dominates is about connecting with friends. Zuckerberg testifies that engaging with friends’ posts is not as much a part of the experience as it was in the past, but concedes that as the service has grown, it’s still a big part of users’ experiences in absolute terms.