[dima_vm]

Instagram might not became that big, but it definitely was on track to become somewhat big, that's why Facebook bought it, in fear of competition.

Same, Youtube might go down, but the idea was out of the box now, someone else would do that. Technology (ContentID) was there as well. As a consumer, I don't mind if it'd be called differently done by different team. It might have been better or worse of course.

[shagie]

Instagram c. 2012 was just burning VC money and had no plans for how it could be profitable. It wasn't until Facebook bought them that there was some thought about how to make it profitable.

https://www.fastcompany.com/3019351/will-instagrams-vogue-li...

> On Thursday, the company announced that it would begin introducing photo and video advertisements on the service, its first attempt to generate revenue since Facebook acquired the startup for $1 billion.

> ...

> It’s a sentiment Systrom has repeated to me for years–and an idea that many revenue-free startups have begun parroting. For entrepreneurs without a business model, it’s become almost fashionable to declare that they’re simply creating a new model altogether: Whatever it is–by god–won’t involve pesky traditional ads. No! The ads won’t be disruptive or annoying–they’ll be wanted and loved! (I’m waiting for the call, SnapChat.) But when push comes to shove, more often than not, the ads turn out to be nothing more than, well, traditional advertisements. See: any Promoted Tweets.

Yes, it was on track to be something big... but it wasn't on track to be able to make any money and was more likely to flounder once it ran out of VC interest and get bought for cheap by Twitter.

https://www.businessofapps.com/data/instagram-statistics/

There's a reason that chart only starts listing revenue in 2015.

While Instagram might have been keeping Zuckerberg up at night with nightmares - one shouldn't pretend that it had a path to making money and being able to keep running.

[passwordoops]

And in a world where competition is allowed to see its course, Instagram would have disappeared. And further down the line, Facebook's poor decisions would have spelled oblivion for them too.

It also means the 2010s may have perhaps seen investors print billions into businesses that actually matter and deliver real innovation

[fallingknife]

If Instagram would have disappeared on its own, Facebook would have just built it in house. They spent $1 billion on it because it was cheaper to do that than to start from scratch. And how could anti-trust possibly stop that?

[kennywinker]

That's just wrong. It doesn't cost $1 billion to copy instagram, at most it'd cost a few million. By buying them, you not only get the app/feature set - more importantly you also remove them from the market as a competitor. This is exactly what we're seeing play out with tiktok. If FB could have bought tiktok, they would have - they couldn't, so they cloned it for far less than $1bil (fb reels) - but now we have a situation of two competing services that users can compare and contrast and prefer. The market it segmented. Which is bad for facebook's shareholders, but good for users, workers, and advertisers. This is exactly why we need good anti-trust

[mrkurt]

The point of antitrust is to encourage that. That's competition. We want Facebook to build net new things.

Facebook's not all that good at building new things, though. Most big companies aren't. Partially because they don't need to be.

[scarface74]

And how would that be a better outcome for the startups?

If you haven’t noticed, Microsoft and Apple have both been around for over four decades “creating new things”.

[salawat]

They really haven't. They've been acquiring startups, digesting and rebranding said startups innovations with an in house version, and (arguably innovating) in finding ways to plaster a transaction layer into solved problems that previously lacked a recurring revenue compatible transaction framework.

In short, subsidizing themselves by abandoning one time purchasable software, and replacing it with either ad serving or subscription based versions.

[mrkurt]

I don't mind startups failing. I would prefer that startups fail. I would prefer big companies fail. It's healthy for companies to die.

Apple and Amazon are more of a vertical integration problem. They expand their market power by monopolizing the vertical supply chain.

Microsoft acquires companies to increase their market power. Skype, GitHub, LinkedIn, now Activision.

[scarface74]

Or it just would have copied Instagram’s feature set like it’s done dozens of times with other competitors.

Or it would have just hired all of its founders to recreate it.

Do you now also want to stop acquihires?

[scarface74]

How was Instagram going to become profitable?

YouTube’s issue wasn’t just being sued, the storage and bandwidth costs are huge and YouTube was losing billions. Rumors are that YouTube is still not profitable.

[dima_vm]

"We run ads, senator." (c) Mark

[scarface74]

YouTube took years and only became slightly profitable after burning through billions of Google’s money and then only by piggybacking off of Google’s existing infrastructure and ad network.

[mrkurt]

YouTube is a tremendous antitrust fail. The very definition of price dumping.

It could have been profitable earlier, but it would have been much smaller and faced stiff competition. That isn't what Google needed from it.

[scarface74]

How could YouTube be profitable earlier as it’s bandwidth and storage costs grew?

Is every company that is not immediately producing a profitable product “price dumping” - including every startup YC funds?

[mrkurt]

Price dumping is a bigger deal when it's a company in a monopoly position doing it. It's not necessarily anti competitive to sell at below cost.

YouTube could have been profitable by charging for their services. Like Vimeo. They could not have been profitable with ads. Google couldn't afford for YouTube to be small, they needed a near monopoly on internet video to extend their ad empire.

[kennywinker]

Ads or a subscription service. Not that complicated. With that many eyeballs you don’t need to be a genius to make money off it.

[Tanoc]

Google over-leveraged advertising on Youtube however. Most Youtube viewers use an adblocker on PC, and adblock is becoming more common on Android with each passing month. All because AdSense went with a more lax policy of moderation for ads after the 2017 fallout caused by Matt Watson scared away big advertisers like Frito-Lay and Toyota. The result was all ads were either falsely advertised Android games, multi-level marketing scams, or even nakedly racist political ads in the runup to the 2018 congressional elections. Adblock rates exploded, cutting Youtube's income and causing a panic response of running even more ads and locking users into seeing them. To this day Youtube still has a lax vetting policy for advertising partners, and actively hateful, harmful, or overtly false ads stay up for weeks until enough users report them.

As for subscriptions... Well, they tried that with Youtube Red. And then Youtube Premium. And then Youtube Music. Every time people turned it down, because the benefits weren't worth the cost each month considering all the features touted could be found legally for free elsewhere. And when video creators outed Red by showing they'd get a paltry amount of that revenue, despite Youtube saying the money from subscriptions would be used to pay them, even more of the viewing audience turned against it.

When you're in the uniquely precarious position of hosting high cost user-generated content, it's very easy for outside forces to break you over their knee and send you into a death spiral.

[scarface74]

How are ad supported companies outside of Google and Facebook doing today?