When Facebook first went public, an older relative asked me if he should invest in Facebook. My only insight was being an internet user at the time and I said no, there was no reason that Facebook wouldn’t be another MySpace. Facebook's only value was their users and users were historically very finicky and moved around platforms at will. I argued that Facebook would make no money and wouldn’t be around in a couple of years. This obviously turned out wildly wrong but I always thought the user moat was always an issue and Facebook’s downfall would be related to it. I guess what this lawsuit says is that they essentially just bought their way out of people platform jumping.
Funnily enough, the co-founder of Onavo (Guy Rosen) is now Facebook's "VP of Integrity," which probably speaks to FB's (lack of) commitment to integrity.
So true - a lot of people (me included) thought a billion dollars for Instagram seemed insane at the time. But it was possibly the deal of the century.
At least in the case of instagram you didnt need hindsight to know it was a good deal. Lots of people thought they price they paid was incredible value on the day it was announced. Plenty of ink has been spilled that year about facebook potentially being in trouble with mobile and instagram seemed at the time to be an obvious solution to the problem.
That is not my recollection whatsoever. A quick read through the HN reactions that day (https://news.ycombinator.com/item?id=3817840) shows a mix of bewilderment and belief that this is a defensive play. Very few people actually opined that Instagram represented much actual value.
Yeah, I admit completely that I thought they were massively overpaying for Instagram at the time. I also shared the highest OP's sentiment that I didn't think FB was a good investment for the same reason (that people would migrate from FB to the next thing as fast as folks moved off of MySpace).
I was absolutely and utterly wrong on both accounts. Part of it was definitely wishful thinking, though, as I dislike FB by one or two orders of magnitude more than any other software company.
But yes, I'd say their acquisitions were not completely obvious slam dunks.
They also tried to be Snap, ofc, but my recollection is that Snap refused. Interestingly, folks have probably flip-flopped over the last few years in wondering whether that would've been good or bad for FB.
And it was a no-brainer that it was something that should never have been allowed to happen due to antitrust regulations. T-mobile had to jump through hoops to buy decrepit Sprint but tech companies get to buy whoever and whatever they want that allows them to expand even outside their niche and where their niche is going.
I would posit that you don't use that data to decide whether or not you should buy Instagram. You use that data to decide if you should clone Stories, build an events platform, etc. IOW, it's incredibly valuable to be able to see aggregate user behavior, which is why Amazon's ownership of so much of the commerce experience makes their introduction of competitive "Basics" so interesting/anti-competitive.
I don't have any inside info here, but they could have gotten much more granular information than how many people were using Instagram and WhatsApp.
For instance, daily time spent in using Instagram on a per-user basis, whether that use was associated with a drop in Facebook use, and how patterns in that relationship broke down across demographics.
I didn't think they were no-brainer acquisitions at the time, but they've certainly turned out to be in hindsight. Was Facebook just smart or lucky, or did they have a lot more data than we did to judge those decisions?
Facebook was smart, it wasn't just a social network, it also was an apps and games platform. Remember Farmville? And also many bands ended up putting their merch and tour dates up on FB because it was just so easy.
Then recently it grew a marketplace to take on craigslist and ebay, and added videos (making it a mini youtube or tiktok).
And let's not forget that FB groups are the go-to place for many hobbies. Into old cars? Or old sewing machines? You won't find an active forum for those things, or if you do, they're 1000x more hostile and trollish than FB's groups.
So my question is, where do you draw the line? Was FB marketplace anticompetitive because it pushed out craigslist?
I guess this whole thing is a fishing expedition to see if the justice department can find a smoking gun email where someone says, like, "Let's be anticompetitive with snapchat" or something...
There are other marketplaces that proved the value of identity and reputation like Mercari and offerup in p2p before fb marketplace launched its own.
I do think FB would stomp or buy other marketplaces, but that there is even a smidgen of opportunity in this space in the US is due to the neglect of buckmaster and newmark.
They went from benevolent dictators to doggedly avoiding any increase in value to users.
This has happened at great detriment to Craigslist users who have been scammed, dealt with well-known but terrible landlords and wasted countless lifetimes due to the shoddy communication features of the site.
I am no fan of Facebook, but have only crocodile tears for Craigslist.
Have you ever sold anything on Facebook Marketplace? It's shockingly easy. I'm relatively late to the party. When I used it for the first time earlier this year I felt like it was the wave of the future.
I was curious, so I just took a look. It feels like a flea market or a yard sale. Except there are people selling $1 PS5's and vehicles with 0 miles driven. Lots of noise on there. Plus you have to deal with selling face-to-face in a COVID environment. Honestly, it feels like Craigslist but somehow more scammy.
The location based nature really enhances the convenience. Also the connection with Facebook messenger and the fact that your camera is attached to the phone with the app. Like, I think if you decided to sell something right now and don't know anything about Marketplace then you could have an ad up within 3 minutes. It's sometimes even more convenient than throwing things away.
And don't FB have Jobs too? Their take on LinkedIN (and Glassdoor, etc) from 2017. I believe that didn't work out either, but I'm not sure, I see job posts floating in FB from time to time. Maybe another example of mixed domains that don't mix well, but I could be wrong.
I still think you were correct, you just underestimated how long it would take for this to happen if the company was actually competent (unlike MySpace), and all the money that could be made in the meantime.
Facebook The Platform's userbase keeps getting older and less engaged, millennials and younger have largely shifted to instagram. Taken by itself, Facebook the platform doesn't have great looking prospects.
Instagram is the current hot thing, and is keeping Facebook The Company on the growth trajectory, but it too will suffer the same problem eventually.
Now that Zuck is under so much scrutiny, he won't be allowed to acquire the next hot social platform. When instagram isn't the "it" platform anymore, Facebook is doomed.
My prediction: if the US government does nothing, Facebook the company will slowly peak and then start shrinking over the next 5-10 years and the problem will start solving itself.
Their data moat becomes infinitely less valuable if the graph of users and engagement is a downward slope instead of an upward one.
> Now that Zuck is under so much scrutiny, he won't be allowed to acquire the next hot social platform. When instagram isn't the "it" platform anymore, Facebook is doomed.
Zuck got around that problem copying competitors lock, stock and barrel and using his monopoly to attempt drive out that competition.
Instagram was under threat by two "It" networks. Both of them ended up being copied in Instagram
Facebook needs to be broken up into three companies to fix it all.
How would breaking up Facebook into three companies fix this though? Suppose Instagram is a separate company and a new competitor starts getting popular. Why wouldn’t Instagram still just copy the competitor’s features?
It’s hard to compete with Instagram because everyone is already on Instagram, not because everyone is also on Facebook. (A lot of IG users don’t use FB much, and vice versa.) A freestanding Instagram could still easily copy and crush competitors.
Because if FB were split in three it would signal a definitive shift towards antitrust regulators actively applying the law. In that reality, all move-the-needle mergers would be subject to antitrust regulations that should have (but weren't really) applied to FB's previous acquisitions thus constraining IG's freedom to copy and crush.
I think the only real failure of anti-trust regulation was in the EU. They definitely should not have allowed the Whatsapp acquisition to go ahead.
I'm not sure on what grounds the US regulators would have blocked the Whatsapp acquisition, as it basically had no competition implications in the US.
The Instagram one is harder. Sure, it was a better version fo Facebook done right for mobile, but it only had 10mn users when acquired.
I'm not convinced that IG would have been successful if it hadn't been bought by Facebook. For an example of how things can go wrong, look at Snapchat vs Instagram.
On the same note, a relative asked me the same thing when they IPO.I thought if Google could make money selling ads why couldn't Facebook. I bought in at IPO price for them. I sold for them about 2 years ago when the price was dropping due to privacy scandals.
I've been giving the wrong answer to "Should I buy Bitcoin" since 2011 or so. I was bearish on Amazon when its stock was at 60 because its P/E ratio was ridiculous. I've learned to just be comfortable with the fact that I'm wrong a lot.
I think I successfully communicated, and I'm getting upvoted, but my wording was imprecise. Would that I could edit to add: "[...] if you thought that is what it would do."
You can get USD for BTC right now, you've been able to get if for nearly a decade and there have never been as many reputable exchanges as there are now.
You said they "tend go down for maintenance" on "any big price swings" but were only able to muster one example of one exchange going down "for maintenance" on one price swing (Bitfinex).
The others, as the articles point out, were trade volume related (which is also a problem, but much less sinister).
There's no evidence this is some kind of grand conspiracy like you implied. There's plenty to criticise in Crypto, but little evidence for what you actually claimed.
No, I'm not challenging the premise, I'm challenging your framing.
Your comment implied sinister intent: That exchanges go offline at key times in order to scam people.
No evidence was provided of that. The sources you provided point to technical problems that are perfectly understandable during a massive, unpredicted surge in such a technically complex field.
there is no end. crypto will continue to swallow up all the world's capital and you'll be furious at how many leading zeros there are in your BTC-priced paycheck.
that's just delusion and cope. if the price keeps going up for years, then no matter what you think you're wrong. the market isn't being irrational, you are.
hahaha, don't sweat it mate. I'm right along there with you. I was surrounded by people dropping buckets of cash for GPUs back at the dawn of deep learning and was therefore naturally tempted to buy Nvidia's stock price (30$ at the time). In the end, I shied away due to the high PE too.
I take solace in the fact that some of biggest regrets or mistakes that Warren Buffet & Charlie Munger say they have made are those that you don't see - the deals they could have done but didn't and, in retrospect, should have.
I actually think it's good to have the community enforce/explain our standards from time to time, within reason. Dang can't see everything, and where he does it takes time to respond. Downvoting/flagging works too, but some may legitimately not know that they've broken a guideline.
Not huffing at all, you basically just confirmed yourself my very affirmation: you pulled that out of thin air. Feel free to think it, still doesn't make it neither neither true, false nor demonstrable.
As to the pretentiousness of the thing, that's usually my take on people who feel fine talking about 330mil+ MAUs as a single person.
Opinion is opinion, thus me explicitly calling it opinion.
My take is honestly supported by the very concept of faulty generalization fallacy - given that you did confirm you based this claim on anecdotal evidence - if you ask me, but maybe that's just me.
One big difference between FB/MySpace is OAuth - you can dump FB the social network, but much harder to dump FB the identity verification service. OAuth in theory is great, in practice it has been an anti-competitive/anti-privacy Trojan Horse.
In hindsight, i think a big part is that myspace's reach extended mostly to early adopter internet users. Early adopters jump on ships early, but also jump off easily too. Once everyone's parents and grandparents jumped on to facebook, that's a much better moat.
Yes, I'm curious as to why DOJ announced Google and FTC announced Facebook actions right before the same group of people who nurtured their rise to monopoly status retake power.
The way facebook is different is that it isn't just a social network, it IS your online identity. The fact that they make you use your real name rather than just some username is what made it work. And what continues to make it a more permanent part of who you are digitally. Facebook login makes it even more intertwined and hard to remove.
The lesson is never to answer the question with yes/no. Get them to come up with their own opinion, do their own research, and decide how much to invest in Facebook, if anything at all (it's not really a YES/NO but how much, and for how long...). If they don't want to do all this work... recommend SPY.
My mom asked me the same thing back in 2014 and I essentially felt the same way as you so I said the same thing. She bought some anyway though, and later sold when it hit $200. Glad she didn't listen to me.
That's good for you, but your tone is a little self-congratulatory here.
Not everybody's mental model of the world matches how events play out. It's a hard problem and a lot of folks conflate ideals with reality. It's also hard to see the big picture if you focus on certain aspects. It also doesn't help that not everyone plays with the same rule set.
Sometimes the more you know the harder it becomes.
>lol should have consulted me. been bullish on long on FB since the $30s .
Yeah that means absolutely nothing, you could have made 10x more bad trades in the same time. I'll "ask you" as you say when you have a proven strategy, not a simple lucky call.
I first bought after the clearly emotionally driven price dip at just under $20. It was obvious no one looked at the amount of hard cash they pulled in, and thought using their emotions.
