Posts show Instagram co-founder felt compelled to sell to Facebook

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  • Facebook CEO Mark Zuckerberg was among powerful tech executives who testified before lawmakers on Wednesday about potential violations of their companies’ antitrust laws.
  • During the hearing, unpublished messages were released explaining why Instagram co-founders Kevin Systrom and Mike Krieger felt compelled to sell their app to Facebook in 2012. Systrom and Instagram’s first investor Matt Cohler discussed what to say to Zuckerberg. future plans for the photo app.
  • In the text exchange, Systrom expresses concern about sending Zuckerberg into “destruction mode” if he refuses a takeover offer and not being able to “escape Mark’s wrath.”
  • Visit the Business Insider homepage for more stories.

Unpublished text messages from 2012 show how much the Instagram co-founders felt they needed to be cautious about Mark Zuckerberg’s “anger” in the months before Facebook acquired the photo-sharing app for $ 1 billion of dollars.

A text exchange between Instagram co-founder Kevin Systrom and first investor Matt Cohler, then a partner at Benchmark, shows the two commenting on what to disclose to Zuckerberg about the photo-sharing app’s future plans and about the decision of the co-founders to acquire or continue. on independently. In the text conversation, Systrom expresses concerns to Cohler about possible Zuckerberg being sent into “kill mode” or encountering “Mark’s wrath” if the Instagram co-founders repel Facebook’s interest in buying. the application.

The text messages were made public on Wednesday as Zuckerberg – along with CEOs of Apple, Google and Amazon – appeared before the House Judiciary’s antitrust subcommittee to answer questions from lawmakers about possible violations of the law. antitrust regulation. The exchange between Systrom and Cohler was just one of many documents the House subcommittee released during Wednesday’s hearing to demonstrate possible anti-competitive practices by the Big Four U.S. tech companies.

While Facebook’s purchases of Instagram in 2012 and WhatsApp in 2014 were not contested at the time, lawmakers at Wednesday’s hearing scrutinized the acquisitions. Some representatives have argued that Facebook’s app acquisitions and feature clones of other platforms – like Snapchat Stories and, more recently, TikTok – were evidence of monopolistic or anti-competitive behavior.

The committee also posted several discussion threads and online discussion logs showing the conversations that took place between Zuckerberg and various Facebook executives and employees to demonstrate the company’s mindset when acquiring billion dollars from Instagram.

In early 2012, Facebook announced that its company represented 95% of the social media market. However, Instagram was quickly threatening that lead: in March 2012, average daily Instagram users were growing at a rate of over 1,700% week-on-week and 9.2 million percent month-over-month. the other, according to documents released Wednesday.

In emails Zuckerberg sent in 2012, the CEO called Instagram a “threat,” and the reasons why buying Instagram would be a successful way to “neutralize” its success. Zuckerberg told his colleagues that Instagram “can do us a lot of harm without becoming a huge business” and that acquiring Instagram would “save” time for the business.

But Zuckerberg’s plans to take Instagram didn’t come as a surprise to the app’s co-founders, as the text exchange between Systrom and Cohler shows. Systrom said he was concerned that the denial of a Facebook takeover offer could put Zuckerberg in “destruction mode” – a concern Cohler claimed.

“Mark does not react emotionally, he reacts according to the competition,” Systrom later wrote to Cohler. “In the end, I don’t think we’ll ever escape the wrath of [M]ark. It depends on how long we avoid it. ”

Just two months after that conversation, Facebook acquired Instagram for $ 1 billion in April 2012.

Responding to questions from Representative Jerry Nadler at Wednesday’s hearing, Zuckerberg acknowledged that the company viewed Instagram “as a competitor and complement to our services” in 2012. The chairman of the large tech audience, Representative David Cicilline , later told Axios that Zuckerberg’s testimony proved that Facebook exhibited “classic monopoly behavior” and needed to be dismantled.

However, Zuckerberg also felt that Facebook had simply “adapted the features” of its competitors in response to lawmakers ‘grids about whether it was cloning its competitors’ products in order to maintain its dominance on social media. Zuckerberg also argued that Facebook still faces competition from platforms like YouTube and TikTok.

The Facebook CEO also disagreed with lawmakers’ description that his conversations with Facebook executives regarding acquisition targets were viewed as a threat “in any way.”

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