Key Takeaways:

• Zuckerberg previously considered spinning off Instagram himself in 2018
• He worried Instagram and WhatsApp would threaten Facebook before acquiring them
• "Friending" on Facebook is declining while messaging is growing
• Zuckerberg views YouTube as a major competitor, claiming people spend more time there than on Facebook and Instagram combined
• Meta could be forced to divest Instagram and WhatsApp if it loses the FTC case
• Zuckerberg testified for over 10 hours defending Meta against monopoly allegations

The FTC's Monopoly Case Against Meta

Meta CEO Mark Zuckerberg spent more than 10 hours testifying this week in the Federal Trade Commission's antitrust lawsuit against his company. The case centers on allegations that Meta built an illegal "social network monopoly" by acquiring potential competitors Instagram and WhatsApp.

The stakes are incredibly high for Meta. If the company loses, it could be forced to spin off Instagram and WhatsApp - two of its most valuable properties. The testimony revealed fascinating insights into how Zuckerberg views competition in social media and his own company's position.

Zuckerberg Considered Spinning Off Instagram Years Ago

In a surprising revelation, Zuckerberg himself considered breaking off Instagram from Facebook back in 2018. Court documents showed an email where he raised concerns about growing calls to break up big tech companies.

"As calls to break up the big tech companies grow, there is a non-trivial chance that we will be forced to spin out Instagram and perhaps WhatsApp in the next 5-10 years anyway," Zuckerberg wrote to other executives.

He even suggested that spinning off Instagram might be beneficial because most companies "actually perform better after they've been split up." This admission could prove challenging for Meta's defense, as it shows Zuckerberg himself thought separation might be viable.

Fear of Competition Drove Major Acquisitions

The trial revealed evidence that Zuckerberg was worried about both Instagram and WhatsApp threatening Facebook's dominance before acquiring them.

In 2011, Zuckerberg admitted in an email that Facebook's camera service was falling behind Instagram: "In the time it has taken us to get our act together on this, Instagram has become a large and viable competitor to us on mobile photos, which will increasingly be the future of photos."

Facebook purchased Instagram for $1 billion in April 2012.

Similarly, in 2013, Zuckerberg told then-growth head Javier Olivan that he worried WhatsApp would develop features similar to Facebook and Instagram and could "start winning in the US and other markets." Olivan responded that he had been having "sleepless nights" worried that WhatsApp was "the real deal."

Facebook acquired WhatsApp in 2014 for $19 billion.

During cross-examination, Zuckerberg claimed that Meta made both platforms better for users by acquiring them. He also testified that after his first meeting with WhatsApp co-founder Jan Koum, he thought it was "extremely unlikely" that WhatsApp would build competitive features.

The Decline of "Friending" on Facebook

One interesting revelation from the testimony was Zuckerberg's acknowledgment that traditional Facebook activities like adding friends and sharing with them are declining.

"The amount that people are sharing with friends on Facebook, especially, has been declining," Zuckerberg said. "Even the amount of new friends that people add... I think has been declining. But I don't know the exact numbers."

The FTC's lawyer referenced an internal document from 2022 that indicated "friending and friend sharing are losing steam." This supports the idea that Facebook's original core function - connecting with friends and family - is becoming less central to how people use social media.

Instead, Zuckerberg noted that messaging between individuals or friend groups is growing dramatically, while "sharing with friends in feeds has been declining." This shift in user behavior has major implications for Meta's products and the broader social media landscape.

YouTube Emerges as a Major Competitor

While much attention has been paid to TikTok as Meta's main rival, Zuckerberg highlighted YouTube as another major competitor. He testified that "YouTube is the most competitive for creators," referring to online personalities who build large followings through video content.

"My understanding... is that people spend more time on YouTube than on Facebook and Instagram combined, certainly more than either one independently," Zuckerberg said.

This aligns with research showing YouTube's dominance among younger users. According to Pew Research cited in the article, nine in ten US teens use YouTube, while Facebook usage has "steeply declined" over the past decade among that age group.

Zuckerberg attributed this partly to the rise of "richer forms of media" like video, which has become more prevalent as mobile networks have improved over the last decade.

Despite these challenges, Meta still maintains a strong position in social media. Pew Research indicates that Meta operates a quarter of the most widely-used social media platforms in the US.

Sheryl Sandberg's Testimony

The article also mentions that former Facebook Chief Operating Officer Sheryl Sandberg testified on Wednesday following Zuckerberg's appearance. While details of her testimony weren't provided, her presence underscores the significance of the case.

As one of Zuckerberg's most trusted lieutenants during Facebook's periods of rapid growth and acquisition, Sandberg likely provided important context about the company's strategic decision-making during the purchases of Instagram and WhatsApp.

Implications for Meta's Future

The outcome of this trial could fundamentally reshape Meta's business. If the FTC prevails, forcing Meta to divest Instagram and WhatsApp would dramatically reduce the company's reach and influence in social media.

Given that Instagram and WhatsApp represent two of Meta's most valuable assets - particularly as the core Facebook platform faces challenges with younger users - such a breakup would have major financial implications for the company.

The case also highlights the evolving nature of competition in social media. Zuckerberg's testimony about YouTube's strength, the rise of video content, and changing user behaviors demonstrates how rapidly the landscape continues to shift, making it challenging for both companies and regulators to define market boundaries.

Trump's Reaction to the Trial

In related news, the article headline mentioned that "Trump blasts Fed Chair Powell, saying his 'termination cannot come fast enough'," though details weren't provided in the content. This suggests ongoing tensions between the president and the Federal Reserve that may be connected to economic policies and market reactions.

Frequently Asked Questions

Why is the FTC suing Meta?

The Federal Trade Commission has filed an antitrust lawsuit claiming Meta (formerly Facebook) has built an illegal "social network monopoly" by acquiring potential competitors, specifically Instagram and WhatsApp.

What could happen if Meta loses the case?

If Meta loses, it could be forced to divest (sell off) Instagram and WhatsApp, fundamentally reshaping the company and dramatically reducing its market presence.

Did Zuckerberg ever consider breaking up his company?

Yes, court documents revealed that in 2018, Zuckerberg himself raised the possibility of spinning off Instagram, noting that "most companies actually perform better after they've been split up."

Why did Facebook acquire Instagram and WhatsApp?

While Meta claims the acquisitions were meant to improve the platforms for users, internal emails revealed Zuckerberg was concerned about both platforms becoming serious competitors to Facebook.

How much did Meta pay for Instagram and WhatsApp?

Meta (then Facebook) purchased Instagram for $1 billion in April 2012 and WhatsApp for $19 billion in 2014.

What trends in social media did Zuckerberg identify?

Zuckerberg noted that traditional Facebook activities like adding friends and sharing content are declining, while private messaging is growing. He also highlighted the rise of video content and platforms like YouTube that dominate users' time.

Who does Meta view as its biggest competitors?

Zuckerberg specifically mentioned YouTube as a major competitor, claiming people spend more time there than on Facebook and Instagram combined. TikTok and Snapchat were also referenced as significant rivals.

How are younger users engaging with Meta's platforms?

According to Pew Research cited in the article, Facebook usage has "steeply declined" among US teens over the past decade, while platforms like YouTube have seen stronger engagement.