In the summer of 2012 Instagram was the up and coming photo sharing app. Its quick expansion and increasing user activity made heads turn, most notably, Facebook’s leadership. Instagram added almost two million users within four months of launching. Users were uploading an incredible 30,000 photos a day! This extraordinary growth forced Facebook to re-evaluate their strategic alternatives, including purchasing the competing platform to avoid becoming leapfrogged by future competition.
That’s why Mark Zuckerberg, Facebook’s co-founder and CEO, immediately understood the existential threat that Instagram posed to his social media empire. Instagram’s user base is growing by leaps and bounds every few months. He pointed out that this tremendous growth would give the platform the opportunity to rapidly implement features as seen on Facebook. The prospect of Instagram integrating its functionalities into Facebook’s offerings raised concerns among executives that it could become a formidable competitor.
In early 2012, Zuckerberg expressed his apprehension regarding Instagram’s momentum. He continued, saying that, “If Instagram continues to win on mobile, or even if Google just buys them, they can very quickly copy our products over the next few years. He made a clear case about the urgency of the situation. For Facebook, the prospect of Instagram’s user base continuing to grow represents a big danger.
Facebook’s leaked internal conversations showed how, even internally, the company took a multi-pronged approach to addressing Instagram’s threat. Those executives were faced with the decision of either building their own photo-sharing app in-house or outright acquiring Instagram. Facebook’s former vice president of product, Samuel W. Lessin, got on the line with Zuckerberg. He talked about how important it was to keep transformative companies such as Instagram. He called for a stronger congressional strategy to maintain the products. This strategy would bring all of their teams directly into Facebook’s overall structure.
Zuckerberg laid out the larger acquisition strategy in more detail during question and answer sessions at Facebook’s IPO roadshow in February 2012. It was this conception of the need to buy time against competitors that drove the need to acquire platforms like Instagram. He explained, “Another way of understanding this is that the thing that we’re actually purchasing is time. Even if some new competitors spring up, buying Instagram will give us a year or more to integrate their dynamics before anyone can get close to their scale again.”
Despite considering the option of replicating Instagram’s functionalities, Facebook aimed to avoid alienating users by maintaining the integrity of Instagram’s platform post-acquisition. Zuckerberg promised that they would continue developing the product. They’re not going to keep building out more features. Rather, all future development will be on their core products. First, this plan speaks plainly about its desire to eliminate competition. It wants to use Instagram’s innovative new features to make Facebook better.
In this same time period, basic competition in the photo-sharing market began to increase as Dropbox had set their sights on the space. Zuckerberg was clearly worried about this potential new competition but recognized the value in Instagram’s attractiveness. He cautioned, “Instagram is growing like wildfire. They’ve gotten to 2 million users and 30,000 photo uploads per day in four months. That’s crazy amazing! We all should be watching this very carefully.
Users across demographics, from technical experts to laypeople, non-technical users and Facebook employees, rushed to Instagram. This further emphasized the immediate need for Facebook to address its competitive threats. Contribution shaming has, indeed, become a troubling trend on the Left. To put that in more concrete terms, users are preferring to share their photos on Instagram instead of Facebook, indicating a huge shift in their loyalty and engagement.
As conversations moved deeper inside Facebook, the pressure to do something grew stronger. Zuckerberg’s central argument was that not acting quickly enough would invite further and irreversible erosion of Facebook’s user base. He cautioned that for every two months we delay, it doubles the amount of time needed for their development. This leaves us in a deeper hole that’s harder and harder for us to climb out of.
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