The big picture: Facebook first signaled it was assimilating its many acquisitions into the core company over a year ago when Facebook CFO David Wehner used combined metrics to describe the size of Facebook's audience. It turns out that was just a sign that more important, company-wide changes were about to happen that will make Facebook a monolithic organization that can't be easily split into smaller units.
By now you may already know that 2020 U.S. presidential candidates like Elizabeth Warren want to break up big companies like Facebook, Amazon and Google -- the main reason being their power to acquire new startups and drive them out of business. Even Facebook's founders have expressed the reasons why they see the need to split the social media giant into smaller businesses.
The company is already under close inspection from regulators for purchasing WhatsApp and Instagram, and has reportedly been adapting its strategy in response. According to a report by The New York Times, Facebook abandoned its plans to acquire video chat app Houseparty last year out of fear that it may raise the level of antitrust scrutiny around its acquisition practices.
Apparently, Facebook has entered a self-preservation mode and made a number of steps to make it more difficult to split up. First, it scrambled to unify the underlying messaging infrastructure powering Messenger, Instagram and WhatsApp. Then it used its legal team to negotiate a deal with the FTC to pay a fine of $5 billion.
The social giant has made changes to its internal structure as well, so that Facebook is "more clearly in charge." On the outside, these changes will become visible in the branding of both WhatsApp and Instagram. Naturally, these moves can be looked at as smart from a business point of view, and as a bright red flag that it's paving the way for more anti-competitive behavior in the future.
To put things in context, one of the reasons why CEO Mark Zuckerberg argues against splitting his company is linked to the way the "attention economy" works. Facebook is currently a $56 billion-a-year business thanks in part to acquiring some of its biggest or potential competitors. And at least in principle, it makes sense for the company to want to have a rounded offering that covers all aspects of online communication.
But these arguments are unconvincing for regulators and spark even more questions and debate around the many ways in which it uses its power to strangle the competition. It's also why the FTC has recently started talking to several founders of companies that Facebook has bought over the last two decades.
The social giant was interested in Houseparty for the audience it commands, which is mainly comprised of people under 24 years old, an area where competitors like Snapchat have had more success. Then, by December 2018, Facebook's corporate team ended the talks with Houseparty, which was later acquired by Epic Games.
The New York Times says employees at both WhatsApp and Instagram have now started reporting to the Messenger management, and share increasingly more resources with the other teams. This comes in contrast to the way they used to operate, with relative independence from the parent company.
Facebook appears to be less worried about patching important vulnerabilities in its apps and doing well on its promise to make the social platform more private. Recently, the U.S. Appeals Court approved a class-action against the company's collection of facial biometric data -- yet another reason for Facebook to be concerned about survival in its current form.