Thanks for this question from Andrea in Italy overnight, who tells me she’s hanging on the court decision that will decide the future of social media.
Ricky: “It’s all gone very quiet on the Meta trial. Is it all over? What happened or is there still something else coming?”
Well, the answer is that we are in the calm before the storm. That’s why it all feels so quiet to most of us, but the judge at the heart of this will be beavering away.
Judge Jeb Boasberg has the most astonishing challenge on his hands.
He must decide whether the Federal Trade Commission is right in its claim that Zuck bought rivals Instagram and WhatsApp for $20 billion to kill competition.
Or agree with Meta that both those companies would never have achieved their potential had it not brought its scale, chequebook and innovative flair.
Judge Jeb’s ruling could not really be more impactful for the news media and the future of social.
That’s because Meta benefits enormously from having Insta and WhatsApp in the family.
The two are huge contributors to Meta’s top spot in the social media landscape.
Insta is its fastest growing and most attractive social advertising solution, which means it’s critical to Meta’s US$164.5 billion annual ad income.
Meta is careful to merge Insta’s earnings into its family of apps revenue to hide its actual contribution, but a trawl of credible sources shows it’s massive.
It would be devasting to Zuck if he lost that $70 billion contributor to topline revenue.
And if Insta is the cash cow, WhatsApp is the growth engine.
It has a just passed three billion users, dwarfing Facebook, and Meta has just begun adding advertising there too, which is likely to be worth tens of billions more.
Both are also vital to Zuck’s biggest dream: That of achieving Artificial General Intelligence (where machines are smarter than us) and from there, his Metaverse.
Now, we don’t have a date from the judge for when he will return with his decision. The trial ended in late May when he indicated his decision would take a few months.
So that’s the answer Andrea, but here’s another chart that shows why all this is so important to you and everyone else in publishing worldwide.
Meta was the fastest growing Big Tech stock last year, and despite a stumble in late April (when it announced huge AI spending) it’s bounced back fast.
You see, Google, OpenAI, Microsoft, Perplexity and the rest are all training their AIs on publisher and other content they are stealing from the open web.
Court cases are running everywhere, and there are demands within the Google antitrust case to force Google to stop doing this.
But Meta sidesteps this with a superpower.
It claims that all the posts by all its billions of users over the past 20 years is enough to get Meta to AGI without needing to steal content from the open web.
Investors know that means that it has the least risky route to the future - and with AI expected to be worth $15 trillion within a decade, that spells F.O.R.T.UN.E. for suits.
It’s also why Meta is cancelling all its funding deals with publishers and showing zero interest in news.
Hope that helps :)
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