Case 1:20-cv-03590-JEB Document 51 Filed 01/13/21 Page 26 of 53
88. By February 2012, Mr. Zuckerberg predicted that an independent Instagram could
soon achieve massive scale, and suggested that Facebook should move to acquire it:
If [my analytical] framework holds true, then we should expect apps like Instagram
to be able to grow quite large. If it has 15m users now, it might be able to reach
100-200m in the next 1-2 years. (Intuitively this is not crazy because in the next
year alone iOS should double and it should spread to Android, so even without
further increase in market share it should grow by at least 4x this year.) If those
assumptions hold true, then we should perhaps be more open to buying these
companies than we currently seem to be. (Emphasis added.)
89. Throughout this period, Mr. Zuckerberg repeatedly explained the case for
acquisition in terms of Instagram’s threat as a personal social networking competitor. In February
2012, he wrote:
I wonder if we should consider buying Instagram, even if it costs ~$500m. . . . For
the network piece, one concerning trend is that a huge number of people are using
Instagram every day -- including everyone ranging from non-technical high school
friends to even FB employees -- and they’re only uploading some of their photos to
FB. This creates a huge hole for us and one that I’m [sic] sure anything we’re going
to do on platform or with social dynamics will completely solve. Sometimes you
don’t want to bug all your FB friends with a lot of photos so you put them in the
photo-posting place instead. With [Facebook] Snap, our basic thesis is that what
people need is a good way to post a bunch of photos on FB. We’re doing some
work on filters but not a ton, and the team is approaching this more as a nice feature
and somewhat of a gimmick. Instagram, on the other hand, is approaching this
problem from the perspective of how to help people take beautiful photos. I think
it’s quite possible that our initial thesis was wrong and that theirs is right -- that
what people want is more to take the best photos than to put them on FB. If so,
[Facebook] Snap might be a good first step but we’d be very behind in both
functionality and brand on how one of the core use cases of Facebook will evolve
in the mobile world, which is really scary and why we might want to consider
paying a lot of money for this. (Emphasis added.)
90. Later that month, Mr. Zuckerberg wrote in similar terms to Mr. Ebersman:
One business questions [sic] I’ve been thinking about recently is how much we
should be willing to pay to acquire mobile app companies like Instagram and Path
that are building networks that are competitive with our own. These companies
have the properties where they have millions of users (up to about 20m at the
moment for Instagram), fast growth, a small team (10-25 employees) and no
revenue. The businesses are nascent but the networks are established, the brands
are already meaningful and if they grow to a large scale they could be very
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