Yesterday was a historic moment in the United States, as the Congress of that country summoned the CEO’s of 4 of the most important corporations in the USA to speak about monopoly and anti-competitive competition.
Google, Amazon, Facebook and Apple were virtually in Congress to defend their positions, and of course, Zuckerberg was one of the most questioned, especially after they will show him emails exchanged with one of his executives in which he clearly reveals the real reason you bought Instagram.
Zuckerberg explained yesterday that the purchases from Instagram or WhatsApp were not a reflection of a search for wanting to “eliminate competitors”, but in order to improve their services for users, although that is not exactly what the emails said before of the Instagram purchase.
Instagram was dangerous for Facebook
In an email conversation between Mark Zuckerberg and his chief financial officer David Ebersman in late 2012, the founder of Facebook reveals his concerns about Instagram and even reveals what he thought Google+, the social network of Google that at the time competed against Facebook.
Conversation between Mark Zuckerberg and David Ebersman in 4 emails made between February 27 and 28, 2012.
Zuckerberg:
“These businesses are nascent, but the networks are already established, the brands are already significant, and if they grow on a large scale it could be very harmful for us”
Ebersman:
“I just want to ask you to have a compelling reason to make the purchase:
1 to neutralize a potential competitor?
2) Acquire talent.
3) Integrate your products with ours
4) Any other?
I will be happy to discuss it with you later. ”
Zuckerberg:
“It is a combination of option 1 and 3. They have an efficient network related to social products. The integration plan is based on integrating your mechanics into our products instead of directly integrating your products. But in reality what we are buying is time, because buying Instagram, Path, Foursquare, etc. It gives us a year or more to integrate its dynamics before another competitor scales enough to get close.
I don’t want to imply that we are buying them to prevent us from being a competitor against us. ”
Jerry Nadler, US politician mentioned in Congress that “Facebook did see Instagram as a threat that could potentially overcome their company. So instead of competing against them, he preferred to buy them, and this is just the type of anti-competitive acquisitions that the antitrust laws are. ”
The Verge mentioned that in another email, Zuckerberg revealed a few days before making a formal offer on Instagram, he mentioned the following:
“I just have to decide if we are buying Instagram. The platform can do us significant harm without becoming big business.”
Regarding Google+, many people believed that Google had the perfect rival against Facebook, however, in an internal post an engineer from the company mentioned the following:
“Google+ is a smokescreen, we are distracting ourselves with a crappy clone as Instagram and Pinterest grow and create new markets that we should have seen coming.”
After the acquisition of Instagram, Zuckerberg wrote him an email in which he mentioned the following:
“I remember your internal post about how Instagram was actually our threat and not Google+. Basically you were right. Something about startups is that you can often buy them.”