| The MySpace vs Facebook example is very old. The modern social media landscape is actually a great example of how the system in the US is broken. Where is the competition to Facebook? Instagram and Whatsapp were compelling alternatives that achieved traction. The US government allowed Facebook to acquire them, reducing competition, and thus the incumbent's incentive to innovate. Recently a new competitor achieved traction, with 500M users and over 1B downloads: TikTok. What's different about TikTok? It's from China, and the Chinese government won't let Facebook buy it. (Heck, they won't even let Facebook compete against it in its home market.) So, American industry may lose much of the social media market to a Chinese competitor, because American regulators have been asleep on the job, and our incumbents are no longer responsive to changes in market demand. This is how many US industries have become less competitive as a shrinking number of large firms have gobbled up their competitors. By the way, your comments in this thread seem a bit uncharitable toward those of us who hold opposing views, we are not idiots. No one is advocating that there should be a law requiring firms to hold no more than 5% of the market. I argue that big firms in markets with oligopoly or monopoly characteristics shouldn't be allowed to acquire their competitors willy-nilly, which is in fact pretty much the antitrust law that's on the books today. |
What are the chances that they wouldn’t have run out of money before being profitable? Their only realistic means of survival was being acquired. They need Facebook’s advertising infrastructure to be profitable. Who else would have acquired them Twitter? They were constantly crashing around then. Google? Apple? Microsoft?
What was to stop Facebook from crushing Instagram without acquiring them by building their best features - like they are doing with SnapChat?