‘$1 Billion Is Very Expensive’: Mark Zuckerberg Regrets Paying So Much for Instagram

Meta’s chief, Mark Zuckerberg, in a resigned tone, has admitted that Instagram’s takeover cost the company a lot, and even though it was necessary to crush the emerging competition, it could have been avoided. During the long-awaited trial between Meta and the Federal Trade Commission (FTC), Zuckerberg opened up about one of the company’s most valuable — and equally controversial — acquisitions, addressing concerns around illegal market monopolisation.

“I guess so, yeah, $1 billion is very expensive,” Zuckerberg said, conceding that he wanted Meta’s (formerly Facebook) in-house photo-sharing platform to succeed, so he did not have to pay a steep price tag back in 2012. Instagram’s initial funding was $500,000, followed by an investment of $57.5 million.

Facebook launched an Instagram competitor called Facebook Camera for iPhone days after announcing its plans to acquire Instagram. However, Instagram, which was quickly emerging as the most popular photo-sharing platform, took over Facebook’s homegrown app in popularity. The Facebook Camera for iPhone app offered the same functionalities as Instagram and even offered Facebook’s users a seamless integration to share photos directly.

Started by Kevin Systrom and Mike Krieger, Instagram was conceived as a portmanteau of “instant camera” and “telegram.” According to Zuckerberg, Facebook resorted to buying Instagram to “neutralise a potential competitor.” However, while Facebook wanted to put a stop to the growing competition, the company maximised Instagram’s value — a hard bargain for Zuckerberg, who acquiesced to the takeover as a measure to take the competition off the market.

After Meta proceeded with Instagram’s takeover, it did not have immediate plans to grow it into the kind of platform it has become today. The company also did not want to kill the app, partly because it wanted to “prevent everyone from hating us.” According to Zuckerberg, the company ensured it did not “immediately create a hole in the market for someone else to fill but all future development would go towards our core products.” Unfortunately, Facebook’s counterpart to Instagram failed to take off, giving room for Instagram to grow.

Meta’s trial against the FTC will help the case concerning the spinoff of Instagram and WhatsApp.

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