At the same time, I do have serious rule-of-law reservations about undoing a deal eight years on, particularly given the fact that it appears that the advertising-supported space is doing better than I thought a few years ago: Snapchat in particular is building a great business, LinkedIn is doing much better, and TikTok is obviously on its way.
- Andy Grove famously said “Only the Paranoid Survive”, but the takeaway from many of these emails is that “Only the paranoid get sued for antitrust”; to put it another way, Facebook executives come across as worried about everything, especially Google, which, by the same token, comes across as completely asleep at the wheel (now that is a monopoly indicator if I’ve ever seen one!).
- Facebook’s stock was down less than 2% yesterday; that may reflect investor skepticism about the success of the lawsuit, but you could also argue that splitting up the company would actually unlock value: all three products would keep their audiences, but would have to monetize independently, which, given the fact that Facebook ad prices are set by auction, not artificially propped up as you would expect with an alleged monopolist, could absolutely lead to more revenue in aggregate, not less.
- Relatedly, it’s not clear that advertisers will benefit from a break-up. The entire reason why Facebook owning both Facebook and Instagram is a problem for other consumer tech companies is because advertisers benefit from a one-stop shop and don’t necessarily want to support multiple platforms.
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