According to Forbes, the FTC filed its lawsuit against Meta on December 8, 2020 targeting the company’s purchases of Instagram for $1 billion in 2012 and WhatsApp for $19 billion in 2014. Meta’s stock price actually dropped after both acquisitions – falling from $28 in November 2012 to $26.81 after the Instagram deal, and dropping $10 within a month of the WhatsApp purchase. The court ultimately dismissed the FTC’s case, revealing that markets initially viewed these deals as risky bets rather than monopoly-building moves. The article draws parallels to Barry Diller’s 1990s Home Shopping Network acquisition, which media insiders mocked but eventually became IAC through 155 transactions.
The investor reality check
Here’s the thing that gets lost in the monopoly conversation – shareholders absolutely hated these deals at the time. Meta’s stock dropping after both acquisitions tells you everything. Investors weren’t celebrating some master monopoly plan – they were punishing what looked like expensive, questionable bets on unproven platforms.
And let’s be honest – could anyone have predicted in 2012 that Instagram would become the cultural force it is today? Or that WhatsApp would dominate global messaging? These weren’t obvious winners – they were expensive experiments in a rapidly changing landscape.
Silicon Valley gambles
Look at what’s happening right now with AI. Meta’s throwing hundreds of billions at catching up with OpenAI’s ChatGPT moment from November 2022. Does that sound like a comfortable monopoly sitting pretty? Or a company desperately trying to avoid becoming irrelevant?
The truth is, in technology there are no permanent monopolies – just temporary advantages before the next disruption comes along. Remember when people thought Google had a permanent search monopoly? Or Microsoft with operating systems? The landscape shifts constantly.
business-foresight-myth”>The business foresight myth
Basically, the FTC’s case assumed Meta had some crystal ball showing exactly how these acquisitions would play out. But the stock market reaction proves nobody knew – including Meta’s own leadership. They were making expensive bets on what the future might look like, not executing some predetermined monopoly scheme.
And let’s not forget – for every Instagram and WhatsApp success story, there are dozens of billion-dollar acquisitions that completely flop. Remember Google buying Motorola? Or Microsoft buying Nokia? Big tech bets fail all the time.
innovation-requires-risk”>Innovation requires risk
So what’s the lesson here? That punishing companies for successful bets actually discourages the kind of risk-taking that drives innovation. If every acquisition that works out gets treated as anti-competitive, why would any company take chances on emerging technologies?
The Barry Diller comparison is perfect – everyone thought he was crazy for buying Home Shopping Network. Now he’s a billionaire internet pioneer. Sometimes the visionaries look like fools until they’re proven right. The market should reward that kind of foresight, not punish it with endless regulatory battles.
