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They use their market power against Company 2 competitors. Its waaay too hard to get a Company 2 type company off the ground, because you have to build/buy/lea
by basch 8y ago
They use their market power against Company 2 competitors. Its waaay too hard to get a Company 2 type company off the ground, because you have to build/buy/lease the equivelant Company 1 services (from AWS etc) and assemble them in a logical way, all while getting a product off the ground before Company 2 can clone you. Giving people a huge head start, by eliminating the need to recreate Company 1, means the Public will see more competing social networks, and those social networks will have less incentive to sell to FB, because they can benefit from Company 1 engineering and anti-evil services without being gobbled up by the mothership.
Social Graph SERVICES are Company 1, the FB Social Graph would be Company 2.
I actually think Company 2 would retain most of the value, Company 1 would only gain value after non-Company 2 clients start buying their services. Company 1 has high fixed costs, and makes money at scale. Company 2 is where all the data about people is stored in a usable, actionable way. Company 1 can only see it in an abstract or encrypted set, they cant actually see what Company 2 or Company 2 competitors are holding. Company 1 builds the Ad infrastructure itself, allowing Company 2 competitors to spin up their own ad marketplaces, (like shopify for ads), but Company 2 is the one profiting off matching Ad customers to datasets and displaying the ads, and keeping peoples eyeball attention on them. It's like Azure, Microsoft isnt looking inside what people are doing at their data for product ideas or extracting the customer held data for its own advertising purposes (Amazon might be, but they shouldnt be.) Company 1 would be a completely agnostic company, it wouldnt know ANYTHING about the data it holds. Just database/graph/toolkit leasing service.
>FB, IG and WA all have separate social graphs
That wouldnt be the case, because Company 2 can compare, merge social graphs at will. What they cant do is look at competing social graphs hosted by Company 1. Company 2 could buy competitors to acquire their social graph or client app or userbase.
- jmastrangelo 8y agoEssentially then, you're advocating for FB's core infra to become a competitor to AWS/Azure/GCP? I guess I just don't see why this is necessary at all. Company 2 is essentially exactly the same as FB would be now if it switched its infra to AWS, with pretty much the same pros and cons as a company. Facebook would have a stressful couple years of transition, and then we'd all be right back at square one.
- basch 8y agoAFAIK nobody is offering PaaS for social networks. Youre missing the part where "ads, anti-evil, localization, social graph, development tools, frameworks, runtimes" are part of Company 1. If I want to spin up my own ad network, or social graph, identity service, spam blocking service, I can go to Company 1 and lease their technology, and plug it into my product. They wont have access to the data in the social graph, or in the ad network, but they provide the software infrastructure that makes it possible. They are the flux capacitor of Company 2 style social networks. The barriers to entry into the social network realm (at scale) can be high (security, spam, compliance, censorship, localization.) The government splitting them horizontally, means that by virtue of Company 1 existing, competing with Company 2 is infinitely easier, and a great way for consumers to benefit from a more diverse marketplace. Possibly the next best way besides the government funding a public/private hybrid version of Company 1, or the government enforcing some kind of interoperability standards. Breaking up facebook this way leaves the consumer client side fb roughly how it is (and still at risk for privacy fines, and fcc action) but levels the playing field for the next generation of companies. Thats the kind of goal antitrust action should be looking to accomplish. Not to punish facebook, but to make a fair competitive marketplace for social media and messaging clients. Facebooks privacy and other scandals should be handled by other government bodies, they arent antitrust imho. FCC, AG, DoJ (for other reasons like criminal negligence.)