Recently, the consumer Internet – a term that refers to products made to generate revenue from a network of massive people – has become very popular. The field, which has been empty of any new actors for the last 5 years, is once again experiencing a new vital experience. New products are attractive enough and growing fast enough that Facebook and other social networks have begun to reverse and essentially imitate them.
It’s still not easy to believe, but lately we are seeing signs that social media is once again becoming more competitive. In this article, we take a look at the strange and new perspectives of social media and talk about what governments’ efforts to control technology giants mean and do not mean.
Scene 1: How the competition ended
If we want to choose an exact date for the day when the competition between social networks in the United States ended, we have to go to the second day of August 2016. It was then that Instagram imitated Snapshot stories, announced that it wanted to be an active and challenging actor in its market, and shook the entire Snapshot startup ecosystem.
We don’t think imitation of capabilities is necessarily anti-competitive – in fact it can be argued that imitation means that the ecosystem is on its natural course – but the situation becomes more dramatic when we know that Facebook was in fact imitating. Snapshot was a big hit, and entrepreneurs and potential investors received a clear message: Facebook will always be looking to buy or imitate any new social product, and will dramatically reduce the chances of instant success. Likewise, the amount of investment decreased.
Last year, after the success of Twitter’s Periscope app, Facebook mimicked its live video capabilities, and the trend for both products grew over time. Similarly, Facebook mimicked the Houseparty live video feature shortly afterwards, and then Houseparty came under the control of Epic Games for an indefinite price.
It was this booming and stagnant atmosphere that led many to believe that allowing Facebook and Instagram to buy Instagram and WhatsApp was a big mistake. Instagram became the most popular social network for young people, and WhatsApp helped Facebook strengthen its foothold in the communications world. In a world where the two products remained independent, the space could have been much more competitive, even if neither Instagram nor WhatsApp had reached their current dimensions without Facebook oversight.
This is exactly the argument that the US Federal Bureau of Investigation is making in its lawsuit against Facebook, which was filed in December last year. The US government says Facebook is “building and paying for its own monopoly in the world of social media through multi-year anti-competitive approaches” and that if it succeeds, Facebook may be forced to sell Instagram and WhatsApp. This is a complex case. As Ben Thompson has previously explained, the government is trying to describe the market in which Facebook competes and builds monopolies.
At the same time, you might think that the US Exchange Commission case against Facebook is weak, and believe that between 2016 and 2021, we saw very little innovation among American social networks, at least in terms of behaviors that encourage users to do so. The social product market became very centralized: Facebook and Google created a dual monopoly in the world of digital advertising, and their enormous size and unpredictable effects sparked a wave of opposition from American tech giants.
If you think the whole thing is a problem, you can argue that there is one or two simple approaches to solving the problem. The first solution is government intervention, through antitrust lawsuits or new laws passed by Congress that limit the tech giants’ ability to buy smaller companies or create new barriers to entry and competition in an emerging market. . The second way is to do basically nothing and allow the nature of existence and the inevitable passage of time to eventually lead to the return of competition to the market.
If the second option seems silly, we must say that such a thing is not so unprecedented. In the late 1990s, Microsoft’s dominance of the PC market led the government to file an antitrust lawsuit against the company and its decision to bundle Internet Explorer in Windows. The concern was that with such a bundle, Microsoft would have complete and permanent dominance in the consumer PC market. In fact, cell phones were evolving, and then Apple came in with the iPhone. That way, no one is worried about Microsoft dominating the PC market today.
Scene 2: How the competition started
Facebook’s biggest competitor in 2021 is TickTock, which has been pulling users out of the Facebook app family since its launch in the US in 2018. TickTock has made it easy for people to make engaging and engaging videos, and owes all of its fame to a central feed that puts a wealth of interesting content in front of your eyes, even if you don’t know or follow anyone on TickTock. Tikotak eventually created a whole world of sound memes, visual effects and inner jokes among members of its community.
Eugene Wei, one of TickTock’s best analysts to date, recently published the third part of his article on the reasons for TickTock’s success. Among the many reasons he gives for TickTock’s success, the most prominent is that TickTock was able to make it difficult for Facebook (or YouTube) to emulate itself. he writes:
People will forever remember Instagram imitating Snapshot’s story capability, but the truth is that Snapshot was never meant to be an impenetrable ditch. Transient capabilities add a new and clever dimension to a social network, but they are easily imitated.
That’s why the effects of the TickTook Creativity Network are so important. You cannot copy a single feature to emulate a tick. You have to take everything together. Not just the features, but how users use those features and how the final videos interact with each other in the feed. You need to mimic all the features built into the TickTock ecosystem, all of which are interconnected. You may be able to copy some of the atoms, but real magic is displayed at the molecular level.
TickTock’s success has caused a real deal of concern among Facebook employees, who ask Facebook CEO Mark Zuckerberg about TickTock in almost all in-house Q&A sessions. The company now has a competitor called Reels embedded in Instagram that is likely to succeed. But the bigger point is that Facebook now either has to compete with TickTock or risk losing a whole generation of users.
You probably already know this. (Unless you are a member of the Federal Exchange Commission who, strangely enough, did not mention TickTock in all of his complaints against the Facebook monopoly). But when it comes to short videos in mobile form, Facebook and YouTube face a real challenge.
But where else has Facebook suddenly found itself competing?
First of all, we have the sound field. Although the app is still available by invitation, Clubhouse recently reached 10 million downloads. Celebrities such as Tiffany Hadish, Ilan Musk, Joe Rogen and Zuckerberg himself have left the app, and the startup, which has been operating for less than a year, is now becoming the source of a kind of cultural revolution. Clubhouse raised more than $ 1 billion last month, up from what Facebook eventually paid to buy Instagram.
Because we’re on the side of a voice app, Clubhouse is not as much of a threat as TickTock: in theory, you can still listen to a chat in Clubhouse and simultaneously scroll through Instagram or post WhatsApp. But Facebook has been affected by the rapid growth of the Clubhouse, and according to a new report in the New York Times, it is considering options to copy the app. Twitter, on the other hand, has created a clone of the Clubhouse called Spaces, which is in beta. It is unclear whether Clubhouse will pose a serious threat to either company. But both Twitter and Facebook see it as a challenge.
After years of investing heavily in the most challenging media, video, augmented reality and virtual reality, Facebook now wants to rethink its approach to text. The advent of Substack over the past year has seen millions of new text creators divert millions from social media feeds and into the relatively quiet world of inboxes. Many people simply turn to email newsletters because their social feeds seem like a very worthless place to get the latest news.
Interestingly, Facebook has also apparently shown interest in these new possibilities. The Times reported last month that Facebook was developing newsletter tools for reporters and writers. Just like Clubhouse, newsletters are hardly an existential threat to Facebook. But these new innovations are taking users’ time and diverting attention away from Facebook apps. And in a world where news is not even available on Facebook in some parts of the world, it would be wise to enter other areas. Twitter also shares this view, and last month Revue bought Substack, its main competitor.
This means that Facebook is facing a host of rapidly growing rich competitors in very different markets. And although we are still in the early stages, it is conceivable that Facebook will soon have a competitor in the world of imaging.
For example, we can look at Dispo, which is an invitation image sharing application, but with one special feature: Users can not view the images they have captured with the application for up to 24 hours after registration. This application sends you a notification push every day at 9:00 AM and, along with several other similar features, encourages users to consume daily. App creator David Dobrick is one of the most popular YouTubers in the world, and Dispo has been available for over a year.
But over the past month, a beta version of the app with social features was released on iOS and soon reached its 10,000-capacity capacity in Apple’s TestFlight software. In October, Dispo was able to raise $ 4 million, and we would not be surprised if Dispo soon became a new phenomenon, assuming that public excitement did not subside.
Audio, video, image and text: Facebook has never in its history been forced to participate in such an all-out competition. We do not remember the last time Facebook participated in such battles simultaneously.
Scene 3: What does all this mean?
When we argue that social media has become competitive again, we do not mean:
- That Facebook has not taken anti-competitive approaches in its history.
- That Facebook should no longer be prosecuted for its role in anti-terrorism laws, or that the government should drop its lawsuit.
- Given all this new competition, Facebook should be allowed to buy competing social networks in the future.
- That Facebook will not remain the world’s largest social network for a very long time or that its business will suffer in the short term.
In fact, it can be said that the US government’s pressures in particular were what initially led to the return of competition to the world of social media. If Clubhouse or Substack appeared in 2013 or 2014, Facebook would simply buy them and remove them from the equation. But in 2021, when Facebook is confronted with official antitrust lawsuits over the purchase of a broken GIF file search engine in the UK, the company can simply lean back in its seat and imitate what others are doing better.