Protocol - Ten years of InstaBook

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By Owen Thomas, Michelle Ma and the Source Code team
September 6, 2022


Good morning! This Tuesday, it’s ten years since Instagram was acquired by Facebook. But what have we really learned in that decade?

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Ten years of InstaBook 


On this day a decade ago, Instagram became part of Facebook. The deal epitomized the red-hot mobile startup moment: Apple and Google’s app stores catapulted the photo-sharing service into a global phenomenon, and Facebook CEO Mark Zuckerberg, facing up to his earlier failures to capitalize on smartphones, agreed to spend $1 billion on a company with 13 employees, 19 shareholders and 30 million users.

The deal is now at the heart of an antitrust lawsuit the Federal Trade Commission filed in 2020, which argues that Facebook identified nascent threats like Instagram and WhatsApp and bought them up rather than trying to compete with them. “It’s better to buy than compete,” Zuckerberg wrote in a 2008 email.

Letting Facebook buy Instagram seems like a huge mistake in retrospect. But hindsight is 20/20.

  • For a billion-dollar deal, the Instagram purchase moved quickly. Facebook announced the blockbuster deal in April. By late August, the FTC closed its antitrust review, taking no action but reserving the right to do so in the future.
  • A week after that, Instagram co-founder Kevin Systrom was sitting in an office in San Francisco testifying to the deal’s fairness to California officials. Because Instagram was so small and all its shareholders were in California, Facebook could use an expedited state review. California advertises the process as a “fast and cost-efficient alternative to federal registration,” not a deep or thorough one, and it only considers whether a transaction is “fair, just and equitable to the parties” involved, not its effect on the broader public.
  • Questions later arose about Systrom’s testimony — chiefly, whether Instagram had other offers, which he claimed it hadn’t. Twitter executives quietly groused to reporters that they had presented him with a $525 million bid. Nothing happened, though.

Buying a small fry is a classic Big Tech strategy. Antitrust enforcers are historically ill-equipped to block these kinds of deals.

  • Since the Reagan administration, antitrust enforcers have largely focused only on consumer harm. Since Facebook and Instagram both offer free apps, it’s hard to show the acquisition made users financially worse off.
  • Under chair Lina Khan, the FTC is trying to look more broadly at harms to competition.
  • And other regulators are restraining Zuckerberg’s company, now known as Meta: The U.K.’s Competition and Markets Authority ordered it last fall to sell Giphy.

It isn’t just that Facebook took out a potential competitor a decade ago: Meta now wields Instagram as a club against the likes of Snap and TikTok.

  • Those who remember Instagram as an artsy photo app complain about what Meta has done to Instagram along the way.
  • But the real question is how an independent Instagram might have competed not just with those upstarts but with Facebook’s big blue app. The answer might not please social media nostalgics.

It’s impossible to wind the clock back, but it is good to remember what things were like in 2012. Back then, Facebook was scared by a startup. Perhaps regulators don’t need to resurrect the Instagram that was; maybe they need to make room for what the next Instagram might be instead.

— Owen Thomas


Open URL

The government’s climate moonshot factory 


Relatively unknown outside of climate tech circles, the Advanced Research Projects Agency–Energy, or ARPA-E, has built a reputation among climate tech founders for game-changing funding that’s helped startups through their earliest stages.

  • Venture capital can play a role in helping nascent technologies, but ARPA-E fills a unique niche for startups with promising moonshot ideas that just require a little more TLC to realize their potential.

ARPA-E has provided over $3 billion in funding to more than 1,300 projects. Of those projects, 190 have together received more than $10 billion in private sector follow-on funding, and 25 have even had exits totaling over $21 billion. ARPA-E projects have also generated almost 900 patents and more than 5,700 peer-reviewed journal articles.

What makes ARPA-E special? Well, it was modeled on DARPA, the Defense Advanced Research Projects Agency, which helped fund projects that gave rise to the internet, GPS and drones.

  • Like DARPA, ARPA-E is focused not on funding incremental technologies but ones it deems transformative. The projects it backs seek to cut emissions, increase energy efficiency or reduce reliance on foreign fossil fuels.
  • Its organizational structure with expert program directors, grants that come with flexibility to pivot and explore new research areas, and forms of support and advice beyond just the funding all contribute all seem to set ARPA-E apart from other sources of funding.

Read the full story to find out more about ARPA-E’s work.

— Michelle Ma


Capital One’s adoption of modern cloud and data capabilities led us to create tools to operate at scale in the cloud. Capital One Software is bringing these solutions to market to help you accelerate your cloud and data journey. Get started with Slingshot, a data management solution for Snowflake customers.

Learn more

People are talking


John Stark, who founded the SEC’s Office of Internet Enforcement, said crypto enthusiasts are far too aspirational:

  • “It's not this panacea that people make it out to be.”

​Coming this week


Apple’s bringing employees back to the office this week. The official return date was yesterday, and employees are required to work in person three days a week.

Code 2022 starts today. Tim Cook, Andy Jassy and other tech leaders are expected to speak.

Into The Box 2022 also begins today in Houston, Texas.

Inbound starts today in Boston. It’ll cover topics ranging from privacy to the future of sales and marketing.

The Chief Product Officer Summit is happening tomorrow. Execs from Google, Meta, Uber and others are expected to speak.

Apple’s “Far Out” event is tomorrow. Get ready for new iPhones and watches.

Peiter Zatko is expected to appear for a deposition on Friday as part of Twitter and Elon Musk’s legal battle.

Former Uber security chief Joe Sullivan heads to court this week, facing criminal charges for allegedly covering up a data breach at the ride-hailing company.

​Modernizing payments


NACHA and other industry groups and regulators are pushing for big changes. In this virtual event In this virtual event on Sept. 8 at 1 p.m. ET, we'll speak with a panel of payment experts and regulators to discuss how banks can stay ahead of the curve and ensure the U.S. can catch up with innovation overseas.

RSVP here

Making moves


Meta bought Lofelt, a Berlin startup that creates tech to mirror the illusion of touch in VR, for an undetermined amount of money.

Masayasu Ito is retiring from Sony at the end of the month. Ito was PlayStation's longtime hardware architect and has been with Sony for five decades.

Meredith Whittaker is now president of Signal. An AI expert and former FTC adviser, Whittaker will help Signal on policy and strategy in the newly created role.

SK Hynix will invest $11 billion in a new chip plant in South Korea.

Meta and Qualcomm are teaming up to make VR chips which will eventually power Meta’s Quest projects.

In other news


Meta was fined $400 million by Ireland’s Data Protection Commission for violating EU privacy laws with the way it handled childrens’ data on Instagram.

The FTC is looking into Amazon’s iRobot purchase, sources told POLITICO. The commission asked One Medical for information about its sale to Amazon, too.

Cloudflare blocked Kiwi Farms because of “specific, targeted threats” on its site. A major protest broke out last week over Cloudflare’s role in protecting the forum.

The EU opened a new office in San Francisco. Gerard de Graaf, who helped push forward the Digital Markets Act and Digital Services Act, will lead the office.

The Department of Commerce released guidelines for distributing funds from the CHIPS bill. It'll take applications for funding no later than February and could start dispersing money by the spring.

Amazon’s “The Rings of Power” is a hit. Over 25 million people watched the new “Lord of the Rings” series on its first day, the biggest-ever debut for Prime Video.

The Integrity Institute has received over $1 million in donations since its launch in October, including grants from The Knight Foundation, the Omidyar Network and others.

More Apple store workers want to unionize, this time in Oklahoma City. More than 70% of the store’s employees signed union interest cards.

California passed two bills that would protect data related to gender-affirming care for out-of-state minors and those who access abortion care in the state.

SoftBank cut at least 100 positions, or around 20% of staff, from its Vision Fund following the firm’s $50 billion in losses since the start of the year.

Tesla’s battery R&D is going slower than it might like, according to experts who spoke to Reuters. Some of the techniques it’s using are apparently proving tricky to scale up.

AI enters health care


MIT researchers have created an AI tool that can predict parkinsons earlier than ever by analyzing a person’s breathing pattern while sleeping, aiming to improve treatment for the disease. But medical ethicists worry that the technology is not advanced enough yet, and could yield false-positive diagnoses. “There's a vast amount of overselling … that AI is going to solve vast amounts of practical problems,” one expert told The Washington Post.


Capital One’s adoption of modern cloud and data capabilities led us to create tools to operate at scale in the cloud. Capital One Software is bringing these solutions to market to help you accelerate your cloud and data journey. Get started with Slingshot, a data management solution for Snowflake customers.

Learn more


Thoughts, questions, tips? Send them to, or our tips line, Enjoy your day, see you tomorrow.


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