The FTC has been extensively looking into whether the company’s purchases of Instagram and WhatsApp, with the antitrust agency recommending Meta divest from the apps.
“The ramifications of this trial, coupled with TikTok’s future in limbo, potentially puts the very core of the social media market at play,” Mike Proulx, Forrester’s VP research director, told Capacity.
“No longer would Meta be its centre of gravity. We haven’t seen anything like this since around 2006-2011—social media’s earliest days. We’d likely see a renaissance of social media startups looking to grab a piece of new social media world order.”
After a multitude of attempts to have the case dismissed, Meta is set for its date in court today (April 14).
Meta has long protested its innocence, arguing that it faces fierce competition from platforms ranging from TikTok and X to YouTube and Snapchat.
The firm also pointed out that its acquisitions of Instagram and WhatsApp were cleared by the FTC in 2012 and 2014, respectively, though the internet and the social networking market were very different a decade ago.
“From the very beginning, the FTC has failed to state a plausible claim, and the agency has done nothing to build its case through the discovery process to prove otherwise,” Jennifer Newstead, Meta’s chief legal officer, wrote back in April 2024.
But with TikTok’s future in the US uncertain and Meta’s attempt to rival X with its Threads app, the FTC’s case could break up one of the most prominent brands on the internet.
“Without Instagram and WhatsApp, what really is Meta? Could Facebook seriously compete with a stand-alone Instagram? Can Threads monetize at scale? Doubtful,” Proulx said. “The company absolutely should not hang its hat on its fledging metaverse ambitions.
“Its AI Glasses are a bright spot. As is its broader AI work (i.e. Llama). That means in a broken-up Meta, the company’s AI initiatives would usurp its social media roots.”
The analysts at Forresters conducted a “quick pulse-check” poll of 500 social media users on the case.
Over half (54%) agreed that Meta has a monopoly on the personal social networking market. Just 19% disagreed.
Some 43% agreed that Instagram being spun off into a separate company would be good, while 50% were neutral on the idea. Only 7% disagreed. Similar levels (45%) said WhatsApp being broken off into its own entity would be good, with 50% again remaining neutral.
While Meta has sought to rebrand itself several times in recent years, including its underwhelming metaverse efforts, the firm's bread and butter remains advertising.
In 2024, Meta generated $164.5 billion in total revenue, with advertising contributing the vast majority—over $160 billion.
Ad revenue accounted for nearly all of Meta's earnings across its family of Apps, a 22% year-over-year growth compared to 2023, buoyed by advancements in AI-powered advertising tools and increased demand.
Proulx remained on the fence as to whether Meta being broken up would be good for advertisers.
“It would certainly spawn a renewed wave of creativity in the marketplace,” the analyst said. “This could mean new and interesting ad types, targeting capabilities, and partnership opportunities.
“On the other hand, Meta’s sheer scale and reach is the one thing that makes the company’s family of apps a marketing mainstay. A more fragmented marketplace would reduce social media’s advertising efficiencies—making brands work harder to plan, buy, and create custom ads across a newly expanded portfolio of platforms.”
The Forrester analyst raised a potentially massive question: If Meta is just Facebook once again, would today’s advertisers even bother with it?
“For now, marketing executives should keep doing what they’re doing,” Proulx said. “Meta’s not getting broken up anytime in the short-term. But hang tight and let the trial begin.”
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