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It may be competition, but it certainly isn't fair competition. As you note, Facebook has much deeper pockets than even a well-funded startup. They can afford t

It may be competition, but it certainly isn't fair competition. As you note, Facebook has much deeper pockets than even a well-funded startup. They can afford to build a clone of your product and give it away for free, without any expectation of even future revenue, specifically to drive you out of business. And they can bundle their clone with their already-popular apps, so people never even feel the need to check out your original product since they have a "good enough" version placed right at their doorstep. This is the exact same playbook that Microsoft used to strangle many, many promising companies back in the '80s and '90s: Stac Electronics (https://en.wikipedia.org/wiki/Stac_Electronics https://en.wikipedia.org/wiki/Stac_Electronics), WordPerfect, Netscape, the list goes on and on. It's just impossible to successfully compete with someone who has an endless supply of money and can stand as a gatekeeper between you and your potential customers.

ummonk 7y ago
Would we prefer a world where disk compression, document editors, and web browsers weren't available as free apps? There seems to be a fine line between price-dumping that ends up hurting consumers once competitors are driven out of business, and aggressive competition that benefits consumers by driving down prices and increasing availability.
joe_the_user 7y ago
Efficient markets have never been about absolute fairness. There's no industry that has been built without the attempted participation of deep pocketed enterprises from earlier, related industries - adding machine companies (like IBM) naturally wanted to jump into computers. The system we live under is capitalism. It's aims are to provide profits to those who invest their existing wealth in innovations. If those with wealth can't use it to gain more wealth, they have no incentive to use it. The government steps in when a given enterprise meets the definition of monopoly - IE, actually prevent new entries into a field (Microsoft met this definition). Google and Facebook are unpopular but I'd say it's pretty clear they don't meet the definition of monopolies preventing entry into their industry (at least on the net, Android is another matter).
- soup10 7y ago
  I don't get why people play devil's advocate in defense of scummy behavior by tech companies. Every shitty thing they do should be called out, exposed and condemned. If they know they don't have public support or defenders they will be better behaved.
  - joe_the_user 7y ago
    I don't get why people play devil's advocate in defense of scummy behavior by tech companies. "Scummy behavior" is dumping poison in rivers or working people 90 hours a week. Normal competition is large companies putting smaller companies out of business through greater leverage. I don't care about a random small company getting rewarded for its random innovations. Why should I? The smaller company would probably crush an even small company given the opportunity. Large companies can sometimes offer more health benefits and such and smaller companies work 90 hour weeks more often. If you want a different social system or something, good for you. If we're talking the present system, weeping for the operations of the market is waste of time. Regulate actual bad behavior, sure. But otherwise, save all regulatory effort, I'd suggest.
    - crispyambulance 7y ago
      > ...I don't care about a random small company getting rewarded for its random innovations. Why should I? Actually, the 800 lb gorilla companies DO CARE about random small companies and their random innovations. That's why they try to buy them, sometimes aggressively. Quite frankly, it's how larger companies can get innovation. As a company grows, true innovation usually gets squelched in favor of derpy project management bullshit. Creative people get burned out and leave, or, in some cases become "a fellow". The main way these big companies can actually innovate is to buy these smaller companies. It might be good for the owners of the small company, some folks cash-out, some get new jobs, some aren't so lucky. Whatever happens a bunch of folks got some great experiences and the satisfaction of creating something new. I don't see this stuff as a bad thing-- and especially not for social media stuff.
      - 7y ago
underwater 7y ago
It's also the exact same playbook Google used against Facebook with Google+.
- monkeydreams 7y ago
  Except both companies had deep pockets in this scenario.
  - underwater 7y ago
    Facebook was further along than Snapchat, but there was still a 10x disparity in headcount and market cap. This was before Facebook had IPO'd. Google had around 1,000 engineers dedicated to Google+, plus the entire company had KPIs based on the success of the project. Facebook had less than 1,000 engineers in total.
  - skinnymuch 7y ago
    Facebook was nowhere near where it is today. It doesn’t even make money the same way with the majority of revenue and profits coming from mobile, with IG being a bigger and bigger factor. And it’s much more international (and monetizing international) now. Google was the giant when they tried Google+.
    - monkeydreams 7y ago
      Before google+ launched Facebook had over 750 million users. It was hardly a small fish. In either case, though, using market supremecy to crush competition should not be rewarded.
      - skinnymuch 7y ago
        During that time period FB’s growth was meteoric and unprecedented. That’s the only reason Google likely took so long as to launch when FB is at 800M users. Because at beginning of decade they were at half that. Go back to beginning of 2009 and they are close to a third from beginning of decade. They weren’t small in terms of users. But they were small in that just a few years prior, their user amounts were a fraction of what they were during Google+‘s launch. With Friendster, Mysapce, and all the me too social networks losing, there was no way to know for sure Facebook would win out and last as a huge company in the early 00s. In early 00s, their revenue and profits hadn’t caught up to user growth either. The mobile explosion hadn’t fully happened yet. As well as Instagram now being a key part of their growth and solid part of their revenue and profit.
the_watcher 7y ago
For one, pretty much every example cited in the article are "clones" of products that the "aggrieved" party was also giving away for free. But let's ignore that. Let's take Stories. Facebook has monetized them, and pretty clearly realized they could monetize them when they rolled out. Does the fact that Snapchat came up with them mean Facebook should not be able to launch something that they plan to monetize? By this logic, anything Facebook rolls out that someone else did first wouldn't be allowed.

ummonk 7y ago

Would we prefer a world where disk compression, document editors, and web browsers weren't available as free apps? There seems to be a fine line between price-dumping that ends up hurting consumers once competitors are driven out of business, and aggressive competition that benefits consumers by driving down prices and increasing availability.

joe_the_user 7y ago

Efficient markets have never been about absolute fairness. There's no industry that has been built without the attempted participation of deep pocketed enterprises from earlier, related industries - adding machine companies (like IBM) naturally wanted to jump into computers. The system we live under is capitalism. It's aims are to provide profits to those who invest their existing wealth in innovations. If those with wealth can't use it to gain more wealth, they have no incentive to use it. The government steps in when a given enterprise meets the definition of monopoly - IE, actually prevent new entries into a field (Microsoft met this definition). Google and Facebook are unpopular but I'd say it's pretty clear they don't meet the definition of monopolies preventing entry into their industry (at least on the net, Android is another matter).

soup10 7y ago
I don't get why people play devil's advocate in defense of scummy behavior by tech companies. Every shitty thing they do should be called out, exposed and condemned. If they know they don't have public support or defenders they will be better behaved.
- joe_the_user 7y ago
  I don't get why people play devil's advocate in defense of scummy behavior by tech companies. "Scummy behavior" is dumping poison in rivers or working people 90 hours a week. Normal competition is large companies putting smaller companies out of business through greater leverage. I don't care about a random small company getting rewarded for its random innovations. Why should I? The smaller company would probably crush an even small company given the opportunity. Large companies can sometimes offer more health benefits and such and smaller companies work 90 hour weeks more often. If you want a different social system or something, good for you. If we're talking the present system, weeping for the operations of the market is waste of time. Regulate actual bad behavior, sure. But otherwise, save all regulatory effort, I'd suggest.
  - crispyambulance 7y ago
    > ...I don't care about a random small company getting rewarded for its random innovations. Why should I? Actually, the 800 lb gorilla companies DO CARE about random small companies and their random innovations. That's why they try to buy them, sometimes aggressively. Quite frankly, it's how larger companies can get innovation. As a company grows, true innovation usually gets squelched in favor of derpy project management bullshit. Creative people get burned out and leave, or, in some cases become "a fellow". The main way these big companies can actually innovate is to buy these smaller companies. It might be good for the owners of the small company, some folks cash-out, some get new jobs, some aren't so lucky. Whatever happens a bunch of folks got some great experiences and the satisfaction of creating something new. I don't see this stuff as a bad thing-- and especially not for social media stuff.
    - 7y ago

underwater 7y ago

It's also the exact same playbook Google used against Facebook with Google+.

monkeydreams 7y ago
Except both companies had deep pockets in this scenario.
- underwater 7y ago
  Facebook was further along than Snapchat, but there was still a 10x disparity in headcount and market cap. This was before Facebook had IPO'd. Google had around 1,000 engineers dedicated to Google+, plus the entire company had KPIs based on the success of the project. Facebook had less than 1,000 engineers in total.
- skinnymuch 7y ago
  Facebook was nowhere near where it is today. It doesn’t even make money the same way with the majority of revenue and profits coming from mobile, with IG being a bigger and bigger factor. And it’s much more international (and monetizing international) now. Google was the giant when they tried Google+.
  - monkeydreams 7y ago
    Before google+ launched Facebook had over 750 million users. It was hardly a small fish. In either case, though, using market supremecy to crush competition should not be rewarded.
    - skinnymuch 7y ago
      During that time period FB’s growth was meteoric and unprecedented. That’s the only reason Google likely took so long as to launch when FB is at 800M users. Because at beginning of decade they were at half that. Go back to beginning of 2009 and they are close to a third from beginning of decade. They weren’t small in terms of users. But they were small in that just a few years prior, their user amounts were a fraction of what they were during Google+‘s launch. With Friendster, Mysapce, and all the me too social networks losing, there was no way to know for sure Facebook would win out and last as a huge company in the early 00s. In early 00s, their revenue and profits hadn’t caught up to user growth either. The mobile explosion hadn’t fully happened yet. As well as Instagram now being a key part of their growth and solid part of their revenue and profit.

the_watcher 7y ago

For one, pretty much every example cited in the article are "clones" of products that the "aggrieved" party was also giving away for free. But let's ignore that. Let's take Stories. Facebook has monetized them, and pretty clearly realized they could monetize them when they rolled out. Does the fact that Snapchat came up with them mean Facebook should not be able to launch something that they plan to monetize? By this logic, anything Facebook rolls out that someone else did first wouldn't be allowed.