HN Gopher Feed (2017-07-15) - page 1 of 10
The Man Who Helped Facebook Bring Snapchat Down to Its Knees
30 points by dansohttp://www.cnbc.com/2017/07/15/instagram-kevin-weil-helped-faceb...
adventured - 1 hours ago
At the time the DOJ began seriously looking into Microsoft about
anti-trust abuses derived from their monopoly, there were still a
vast number of medium to large software & tech companies that
competed head on with Microsoft. That of course meant there were a
large number of parties that could sign on to the aggrieved list
against Microsoft.As Facebook formally kills off Snapchat in the
next few years, it's a curious problem of which companies will
supply the ammunition to go after Facebook for anti-trust abuse.
Said companies will be the biggest motivating factor for the US
Government to act, their prompting will drive the case.Given the
scale we're talking about now (Facebook is already more profitable
non-inflation adjusted than what Microsoft was at the height of its
power; and they might double their profit in a few years up to $20
billion before any government action would come through). I would
expect companies to begin lining up with their hands out. Twitter
as one example, stands to easily land maybe $5 billion or more as
compensation for being one of the few survivors of Facebook's
social monopoly. Something that has changed a lot in the last 20
years, corporate fines & costs of negative legal outcomes have
skyrocketed in practically every industry. Google's worsening EU
disaster is just the latest example of that. Facebook will need
tens of billions of dollars set aside for settling with
governmental entities and competitors (even semi-dead competitors
like MySpace - its owners will show up with their hands out for a
settlement, and they'll definitely get some crumbs as Facebook will
settle just to move on as the lawsuits stack high after the blood
hits the water).As the world witnesses Facebook intentionally kill
off Snapchat by leveraging its monopoly in nearly every way it can,
there are going to be few people remaining in the Facebook defender
camp as the number of major social players in the US & EU markets
drifts toward just a few small competitors left standing. Snapchat
better have been worth it, as I can assure you that crushing
Netscape wasn't worth what it cost Microsoft.
boulos - 22 minutes ago
> Facebook is already more profitable non-inflation adjusted than
what Microsoft was at the height of its powerAs a nit, what's the
point of using a non-inflation adjusted comparison? You wouldn't
say have compared Facebook to Standard Oil :).It turns out that
1998 to today is only a 50% change according to CPI  and MSFT
had $4.5B in net income for FY 1998 . So your point still
stands given Facebook's massive ~$10B FY2016 net income .
adventured - 3 minutes ago
Ok, serious answer. I used the non-inflation adjustment
specifically because while I recognized enough time had passed
to cause a not-entirely-trivial adjustment, I didn't regard it
as enough time to matter enough to warrant a distraction to the
more core points. Inflation adjustment precision is a
notoriously disagreed upon thing, the more near term you get
the less valuable the matter becomes. I knew that someone might
lodge that point, so I wanted to potentially preempt it (hoping
that it would make the responding comment not worth bothering
with, that the person writing it would be too lazy to bother
writing a comment just to argue inflation adjustment numbers
for ~1997-2017). Why bother making the point at all then?
Because it highlights Facebook's obvious growing financial
power. If their net income isn't beyond Microsoft's on an
inflation adjusted basis today, it will be very soon (perhaps
by the end of fiscal 2017 or mid 2018 on a run rate). Further,
I suspected most people realize that while has been some
inflation since the late 1990s, it's not N hundred percent.
majani - 18 minutes ago
I voted you up for making good points, but I think Facebook's 3b
buyout offer(which many thought was on the high side at the time)
negates any accusations of abuse of power.
adventured - 11 minutes ago
Microsoft tried to buy Netscape. It doesn't negate it on the
part of Facebook, just as that did absolutely nothing for
Microsoft back then and for exactly the same reason.In fact it
enhances the negative view of the monopoly company in question
as a predator looking to dominate. That's how it'll be played
in the press, it's how it'll be spun by competitors and by the
government entities.The fact that it was perhaps high at the
time, will also be spun as proof that very clearly Facebook has
too much power, that they are deriving such immense profit from
their social monopoly that they can afford to overpay to
sustain their monopoly. You see, anti-trust is an intentionally
subjective field of law. It was designed to be vague, it
enables them to go after you for nearly any perceived abuse of
market power (with a tilt toward consumer well-being, but back
in reality the Microsoft case was overwhelmingly about powerful
competitors crying foul).
abalone - 27 minutes ago
The interesting flipside to the copycat issue is that Snapchat
intentionally did not copy Instagram. And that was probably a
mistake.Spiegel was explicitly against the concept of
"accumulative" profiles. The accumulative feature they rolled
out last year was Memories, a private gallery that only the user
could see and show to people in person. And he was explicitly
against making it easy to add tons of friends on Snapchat. He
wanted it to be about your "seven most important people."Well,
turns out people do in fact like their Instagram accumulative
profiles to store and share highlights with their followers. And it
turns out people like getting engagement and adulation from a
broader network of followers.So, as much as I dislike the crass
copying that Instagram/Weil did and his attempt to pass it off as
just a "format" -- that's bullshit, they copied vast aspects of
Snapchat stories and messaging.. calling it a "format" is naked
intellectual dishonesty. I noticed Weil back in the Twitter days
and this intellectual dishonesty makes me respect him less.But
Snapchat also did not make the right strategic product decisions
here. Spiegel, to his credit, went with a bold vision and strategic
analysis about what people want. Turns out it was just wrong with
respect to how people want to engage with and present their
experiences to a broader set of friends.
ouid - 22 minutes ago
I sometimes use snapchat, I never use instagram. There's nothing
wrong with occupying a niche.
jdavis703 - 4 minutes ago
Except for when you go public and that "niche" isn't big enough
to drive the returns public investors want. There seems to be
many social media companies that should take the non-profit and
open source route that Mozilla took. Twitter feels like a prime
candidate, they provide an extraordinary useful service that
might be impossible to monetize without losing some of the
briandear - 1 hours ago
Instagrams revenues are increasing because Facebook advertisers
unwittingly are having their ads run in Instragram. You have to
opt-out. Found that out after blowing through and ad budget that
got consumed more quickly because of Instragram.Instagram users as
a cohort are the worst audience for advertising. Low conversions,
lots of impressions and just all around less profitable than the
exact same ad on Facebook itself.Even music acts that would seem to
be a tailor made product for Instragram ? still, in my anecdotal
experience, a complete waste of money. Instagram the ?thing? might
be a fun product, but Instagram as a provider of cost-effective
advertising, no way.
quickthrower - 57 minutes ago
Ultimately this should hurt Facebook if advertisers are tracking
ROI they may just stop campaigns and go into other channels
briandear - 46 minutes ago
One would think, but I think big brands don?t care. They are
after ?awareness? and not actual conversions. It?s like TV, how
does one measure the ROI on a national Coca Cola ad? (I
actually don?t know.)
askafriend - 36 minutes ago
I have to say that as a consumer, Instagram Ads sway my opinion
far more than and grab my attention far more than Ads on any
other platform. I'm a heavy user, but it's also something about
the format and the quality photography that just gets me.The
targeting is incredibly good too. I've discovered random brands
on Instagram that I've bought clothing from which I never would
have expected to do. I would never consider such a thing if I see
the same kind of advertising on Facebook or Twitter for
example.Instagram is extremely trendy right now, possibly far
more than in the past when it was smaller.
debt - 1 hours ago
Most of this will come down to brand equity anyway. I have to
assume there are people using Lyft over Uber because those people
have negative associations with the Uber brand. Uber and Lyft both
provide the same products, but people prefer one brand over
another.People prefer Gucci over Versace, North Face over Patagonia
etc.Inevitably, the same will be true for Facebook vs Snapchat.
Snapchat will likely prevail in a way because the "brand"
ecosystem, talent pool(pr, actors, producers etc.) are concentrated
largely in Los Angeles due to the existing Hollywood
system.Proximity to the talent might not have much to do with it,
but I imagine Snapchat has been developing those relationships for
raz32dust - 5 minutes ago
I am curious how many people actually feel this is cool that
Facebook can simply copy everything Snapchat comes up with? I
understand that this is the way of the world. Big fish eats smaller
fish yada yada. But is it good in the long run? I don't know how to
do this, and I understand any solution will probably be riddled to
the core with loopholes. But I do feel like there should be some
way to prevent this kind of monopolization. What do you all think
from a long-term, idealistic perspective?
ensiferum - 2 minutes ago
And ofc you need this story with some 30-sonething superstars
self promoting hotshot CEO who is the capable of coming up with
the solution of simply copying the competition.
nancyp - 1 hours ago
I'd rewrite the title: "Man who helped Facebook shamelessly copy
Snapchat's best features without giving any credit"
qq66 - 30 minutes ago
Actually, credit was given. FB's head of product publicly
admitted to copying Snapchat's features.
xxSparkleSxx - 20 minutes ago
Nail salon opens with same services as the million nail salons
before it.Big deal.
dsacco - 57 minutes ago
There is nothing inherently righteous or honorable about allowing
another company to lay exclusive claim to features. That
"shameless copying" is an example of competition, and it's what
turns the wheels of capitalism.What would you have Facebook do?
"Well, darn. I guess we can't implement those features, Snapchat
beat us to it! Time to just lay over and let them churn our
users." This is not how any rational company works, and every
major tech company has copied others many times.
ouid - 30 minutes ago
>an example of competitionNot when you are leveraging monopoly
power to gain market share somewhere else. This kind of
capitalism tends to degenerate.
majani - 20 minutes ago
They gave a massive buyout offer before copying. There was
only one thing left to do after that.
ouid - 13 minutes ago
If you're arguing that Facebook behaved rationally, then we
aren't in disagreement. If you're arguing that Facebook
acted in the public interest, then you're going to need a
rhizome - 55 minutes ago
Right. How about a story that says, "Person who failed to make
Snapchat's features uncopyable?" Just as interesting!The US does
not have moral rights in IP, so you better conduct your business
in a way that doesn't rely on their mere existence.
godzillabrennus - 10 minutes ago
Embrace, extend, extinguish.
briandear - 50 minutes ago
Would a nice thank you note be appropriate?
askafriend - 41 minutes ago
There is copying and then there is copying well.Almost every
companies copies in some form or fashion - you'd be hard pressed
to find one that doesn't - but few really do it well. I would
argue that Instagram did it very well and you can see it in the
success. The product is well designed, extremely polished, is far
more stable, is more engaging (for me), and more complete in my
opinion.I don't think your intended criticism has any value in
the real world. It's a tired argument and deeply flawed.I think
the reverse argument is a stronger one. That is to say that
SnapChat's core innovations that got them this far were closer to
a commodity than is ideal for a business like theirs. This is
something that SnapChat acknowledges in their own S1.What I think
investors didn't see or expect is: * The extent to which the
SnapChat feature-set was a commodity in a world where several
other similar friendship and interest graphs exist. * The speed
and potency with which competitors like Facebook would attempt to
compete. I think Facebook's strategy was far more successful than
people were prepared for and that's reflected somewhat in the
SnapChat stock price swings and analyst sentiment swings.
danso - 20 minutes ago
I agree; success was not inevitable. After FB failed to buy
Snapchat, they attempted to copy it with their Pokes App, back
in 2012: https://www.google.com/amp/s/techcrunch.com/2012/12/21
/faceb...I don't believe copying was inevitable either. Snap's
main appeal at that time -- disappearing content -- was seen as
completely anathema to FB's practice data hoarding. And adding
features of any sort risks alienating the current user base. I
confess that as a casual Instagram user, and a non-Snapchat
user, I'm completely lost with all the new features and end
points to what was a straightforward photo app.
mkagenius - 1 hours ago
Its a game -- everyone is aware of the rules, so lets not get too
tensor - 58 minutes ago
Mind, the title is pretty emotionally charged. I suppose a
title like "Large company uses size to crowd out smaller
company" isn't as catchy.
danso - 1 hours ago
How should credit be paid for copying such features? Through
patents and licensing fees?
hyperbovine - 1 hours ago
Patent those features or be left crying into your beer.