Meta

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.

When Instagram ran a test showing one group more friends and family-focused content, it reported in 2016 that it found a 7 percent increase in time spent on the platform and a 7 percentage point increase in user retention. Turning to cross-examination, Meta’s attorney points out a lot has changed in the market since that period.

Meta CMO Alex Schultz is back on the stand after Mosseri finished testifying. In a 2014 email shortly after Facebook announced its WhatsApp acquisition, Schultz responded to an executive concerned that the Messenger team was “demotivated by the announcement.” Schultz said he was “more motivated than ever to still be working on messenger.” The first explanation he listed: “Have to keep things honest so the deal doesn’t fall through and prove there is competition.”

The FTC revisits the Kardashain-popularized meme pushing back on Instagram’s design overhaul that it later walked back. It’s walking through a 2022 interview with The Verge where Mosseri explained the decision. He testifies that people always complain about change, and that connecting with friends remains an important reason users come to the app, but Instagram has to to adapt the form in which they facilitate that in order to survive.

“I never met a creator who didn’t think they deserved more reach than they were getting,” Mosseri says. But the reality is, he adds, there’s two times as many creators this year than last, so the field is getting more and more saturated. “Even though Instagram might benefit, there are winners and losers within the creator ecosystem.”

Mosseri takes the jab at TikTok after the FTC asks about the reliability of TikTok’s data evaluating how much its features are used. The FTC may be underscoring a TikTok executive’s earlier testimony that it’s “friends” feed only makes up a small percentage of videos viewed on the app. That goes toward the FTC’s argument that users don’t primarily go to TikTok to connect with friends, as they more often do with Instagram.

That’s how Mosseri describes Facebook’s decision to buy Instagram in 2012. He says that both companies “benefited greatly” — Instagram, from Facebook’s resources and experience, and Facebook, from the founders’ talent for building compelling products.

Mosseri found himself in the middle of the tension between the two companies, having moved to Instagram from Facebook. He understood some of the concerns the Instagram founders had about things like discontinuing some links from Facebook to Instagram, and similarly disagreed with certain changes from Facebook, but “also thought they were being made more of than they needed to be.”

Mosseri estimates this is the most Instagram has spent in a given year on creator incentives. Instagram sees creators as a good source of content after many rank-and-file users began posting fewer of their own updates.

That’s how Mosseri describes the state of things in late 2021, where a chart in a board presentation shows relatively flat growth in time spent on Instagram. If you were to look at Instagram’s growth here in isolation, he says, it would look like Instagram had some positive, modest growth. But comparing it to TikTok’s explosive rise tells a different story.

In a March 2020 update to Instagram staff, Mosseri gave a bleak overview of the challenges the company was facing. “The engagement trends, particularly in the US, have been concerning. Time spent has dropped, stories consumption and production have plateaued, Feed’s decline has continued, and time in Explore has been sliding since the summer of 2018,” he wrote, blaming the slide, in part on some of the company’s own mistakes “and competition from TikTok and Snapchat.”

The first time around, Instagram tried to build its short-form video concept on top of Stories, which he says was “not a sound foundation” for the product. “I think we could have and should have been more aggressive,” he says about building Reels and competing with TikTok.

Mosseri says Meta is always focused on competition, but TikTok represented the greatest he’s seen during his time at the company. After seeing engagement plateau in 2019, however, the company has since bounced back thanks to building out Reels and better AI-powered recommendations. “We’ve seen a lot of growth for the overall app, though the percentage of the app spent on friend content has gone down,” Mosseri testifies.

Mosseri testifies that “growth is everything” to Instagram and the company was deeply concerned to see feed impressions declining and engagement on stories plateauing in 2019. “Competition from TikTok is a big concern,” a presentation from the time says, adding a “conservative estimate” that 40 percent of the decline in time spent on Instagram was due to TikTok, and 23 percent in the US in particular.

Mosseri says he used to think of those platforms as more “lean-back experiences,” but that’s changed in recent years. TikTok is now “every bit as participatory as we are at this point” and as YouTube has leaned into Shorts, it’s “brought them closer to us.” Mosseri notes that TikTok now has a friends tab, which a TikTok executive testified earlier in trial only accounts for about 1 percent of the videos viewed on the app.

In a January Reel, Mosseri announced a new feed within Instagram of videos their friends have liked in an effort to make sure Instagram is not just “a lean-back experience, but a participatory one, a social one.” It underscores how Instagram still sees connecting friends as a core experience on its app. Mosseri testifies he was distracted watching the video because “I’m mostly focusing on the one comment that said ‘definitely not a good idea.’”

In this 2024 video played in court, Mosseri explains that Instagram doesn’t plan to go after the long-form video market because it’s not as conducive to sharing and interacting with friends. Mosseri testifies that even today, “I still think friends are an important part of the experience.”

In an email thread from 2018, Mosseri checked in with Zuckerberg from paternity leave to try to communicate concerns the Instagram co-founders Kevin Systrom and Mike Krieger had with strategy changes for the app. Mosseri wrote that after catching up with Systrom, it was “hard for me to get a read on what’s going on as the relationship is strained.” He told Zuckerberg, “The core tension seems to be twofold: (1) you believe slowing down Instagram will help more than some others do, and (2) your tolerance for handicapping Instagram is expectedly higher than the Instagram team’s.”

Zuckerberg told Mosseri in a 2018 email that even as Instagram grows to include more public entertainment posts, it “can never exclusively be for public figures or it will cease to be a social product.” Meta has been arguing that the social media market has changed so much that entertainment is a key focus of social apps including Instagram and TikTok, but the email suggests that at least at the time, Meta’s CEO felt that connecting with friends would always need to be remain a core use case.

The Verge’s Editor-in-Chief Nilay Patel gets a shoutout in court when the government plays a clip of Mosseri’s January 2021 podcast interview. In the clip, Mosseri talks about joining Instagram and making changes to the safety and integrity operations. Mosseri says on the stand that he indeed “vaguely remember[s] talking to Nilay.” Here’s part of the transcript from the clip they played in court:

But the team decided to make it a standalone app because they wanted to replicate how within Twitter, replies are as prominent as the original posts — something that’s not typically the case on Instagram. The group decided it would be too confusing to users to squeeze in this different model. “That was a very contentious decision internally,” Mosseri testifies.

That’s how Meta viewed the app when it was evaluating launching a competitor that would eventually be called Threads. The FTC is trying to use Meta’s internal evaluations of Twitter to show that it doesn’t see the primary reason for going to Twitter as connecting with friends and family — and therefore, it’s arguing, in a different market from the one it says Facebook and Instagram monopolize.

Mosseri says the app finds the most success in blending entertainment with interacting with friends. That could look like commenting on a public post about a sporting event and interacting with a friend in the comments, he says. That’s important since Meta noted in documents around 2018 that people were sharing less in their feeds, and public content was increasing. The FTC is trying to point out that even if posting to the apps has declined, there’s still friends and family interaction happening.

The FTC is beginning its questioning of the Meta executive by fleshing out what users want out of Instagram. The testimony will help shape how the judge thinks about the market Meta competes in: a limited market in social media networking to keep up with friends and family, or a broader market including entertainment that encompasses apps like TikTok and YouTube.

Schultz began testifying about how Meta tracked the rise of mobile messaging apps. Mosseri is expected to take the stand tomorrow and we’ll go live again then.

Alex Schultz, who’s worked at Meta for years in growth and analytics, is now testifying. He clarifies during the FTC’s introductory questions that while there are multiple VPs of analytics, he is “the” VP of analytics. While I was across the courthouse covering Apple executive Eddy Cue’s testimony in the Google remedies case, WhatsApp chief Will Cathcart was testifying earlier today, followed by an FTC expert who surveyed users about their main motivations for using various social media apps.

The WhatsApp beta for Android 2.25.15.12 update includes an in-development AI feature that summarizes messages in chats, groups, and channels using the Private Processing AI tech Meta announced last week, allowing users to quickly catch up on lengthy conversations.

The judge opted to watch video testimony slated for the day in his chambers, so we’re done for the day. We’ll go live again this week when the trial continues.

A 2014 chat log between Systrom and Deng seems to undercut Deng’s testimony that he doesn’t recall Meta scaling back growth resources for Instagram. Deng says he doesn’t have enough context to confirm what he and Systrom were discussing, but described the chat as a “knee-jerk reaction” to an email they mentioned at the time. “Am I reading correctly we now have less growth support, not more?” Systrom asked. “This isn’t great for us,” Deng wrote at the time.

Deng, who moved to Instagram in 2013 until 2015 after working on Facebook Messenger, is challenging Instagram co-founder Kevin Systrom’s testimony that the app could have reached the same success without Meta and that the company deprived it of resources. Deng says Meta helped Instagram with speeding up high quality hiring, and sharing infrastructure and growth team staff. Still, Deng left Instagram several years before Systrom departed the company.

Deng, who led product for Facebook’s messenger product in the early 2010s, says he was not worried about WhatsApp growing into a big rival in the US. Since many people in the US had iPhones where they could send mobile messages including photos through iMessage, he says, “people just expected more here than just text messaging,” which was the focus of the simple WhatsApp service. “There’s nothing about what they did that signaled they remotely wanted to get into more expressive messaging.” he says.

Former product executive Peter Deng warned colleagues about the existential threat of mobile messaging apps moving into Facebook’s core space. In an October 2012 email, he called messaging rivals “the biggest threat to our product that I’ve ever seen in my 5 years here at Facebook; it’s bigger than G+, and we’re all terrified,” he wrote, referring to Google’s now-defunct social media competitor. “These guys actually have a credible strategy: start with the most intimate social graph (i.e. The ones you message on mobile), and build from there.” Deng testifies he was referring to the three mobile apps that had started adding such features, and not the one Facebook ultimately acquired: WhatsApp.