SAN ANSELMO, CALIFORNIA – OCTOBER 04: In this photo illustration, the Facebook and Instagram apps are seen on the screen of an iPhone on October 04, 2021 in San Anselmo, California. Social media applications Facebook, Instagram and WhatsApp are experiencing a global outage that started before 9 a.m. (P.S.T.) on Monday morning. (Photo Illustration by Justin Sullivan/Getty Images)
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“This is the dumbest thing I’ve ever heard – and you’ll never be heard from again.” That’s what Michael Ovitz, long known as the most powerful man in Hollywood, told Barry Diller when the former head of both Paramount and Fox informed Ovitz of his next act in business.
It was the early 1990s, and Diller sensed the future was in screens “interacting with customers.” Diller sought and achieved control over the Home Shopping Network. Media types were aghast!
Diller’s time in the proverbial wilderness rates thought as you read this, and you contemplate the meaning of the dismissal of the FTC’s case against Meta. The FTC filed suit against Meta on December 8, 2020 based on Meta’s prior purchases of Instagram ($1 billion) and WhatsApp ($19 billion) in 2012 and 2014 respectively. But if there had been strong evidence in 2012 and 2014 that Meta was buying monopoly power, then the latter would have revealed itself through exponentially higher price tags for both Instagram and WhatsApp. It’s really that simple.
That they both could be purchased for a fraction of their present worth is all the evidence we need that as opposed to buying monopoly control of the social media sector, Meta (Facebook at the time) was taking on substantial, possibly existential risk with its purchases. Leaps into the future are expensive, and shareholders not infrequently revolt if they’re wrong.
Which brings us to Meta’s share price 15 and 13 years ago. It was higher in November of 2012 (it closed the month at $28) than it was after the purchase of Instagram ($26.81) in December of 2012. As for WhatsApp, Meta shares were down $1 a month after the purchase, and $10 by the following month. Markets are a look ahead, but as evidenced by the share-price movement of Meta after it added Instagram and WhatsApp to its suite of free offerings for users, neither impressed investors.
It’s a reminder that it took the information-pregnant marketplace a long time to reward Facebook’s vision. Which is telling.
The crucial truth revealed through Meta’s stock price is that Facebook couldn’t have known it was purchasing monopoly power, let alone businesses that would subsequently exceed their purchase price worth, simply because no one knew. In business, tomorrow is another century. Which similarly requires thought as this opinion piece inches toward its conclusion.
It was on November 30, 2022 that a little known (at least to the public) non-profit organization called OpenAI released ChatGPT, and in doing so, profoundly changed the present and future of Silicon Valley. Since then, Meta, once thought to be a “monopoly,” has invested hundreds of billions in a frenzied attempt to yet again discover a future that changes all the time based on developments in the present.
It’s yet another reminder that in Silicon Valley, there are no monopoly purchases as is. There’s just investment in an ever-changing future that’s impossible to accurately foresee. This truth seems to have informed the court proceedings in the FTC’s dismissed lawsuit against Meta.
Back to Ovitz and Diller, somewhere they’re nodding their heads in agreement. Foolish as Diller’s acquisition of HSN looked at the time, it proved a vehicle for him to become a billionaire internet entrepreneur though 155 different transactions over the years whereby much disdained HSN became the much revered IAC, or InterActiveCorp.
Once briefly ridiculed, Diller is now lionized. In our dynamic economy there’s no buying dominance or “monopoly,” there’s just intrepid leaps into the future. That’s what Meta successfully did in risky fashion, thus the wise dismissal of the FTC’s lawsuit.
Source: https://www.forbes.com/sites/johntamny/2025/11/19/meta-never-bought-monopoly-power-it-simply-discovered-the-future/
