The media reference to a "favorite attorney" both paints a vivid portrait of the aptitude of journalists covering the trial and grates like nails on a chalkboard to those in the legal profession.
I realize “time spent” is used to measure market share because that is the metric used by ad buyers. But why? When magazines competed against television for a share of ad dollars, they would have loved if ad buyers had bought into that pitch. Because magazine readers spent more time with a magazine than TV viewers spent watching a :30 minute show. Ad buyers didn’t buy that pitch because TV reached more people per minute than magazines. It took time for magazines to build reach, because they relied on “pass-a-long” readership for a significant proportion of their reach.
In the early days of Social Media, their reach also took a long time to build, just like magazines. But Sheryl was able to convince ad buyers that “time spent” was valuable because TV reach per minute (around 33%, when there were three choices) had dropped significantly due to competition. Now, ironically, Social Media reach per minute now surpasses TV, as evidenced by how quickly visceral misinformation can go viral. That’s why reach per minute is the clearest metric for measuring whether there is competition in any media.
That’s a good model. A lot of internet ad revenue depends on convincing the buyers to accept the validity of your pricing model. Often with very little evidence base. Which is why you need persuasive people like Sandberg.
Ironically, theres much more actual reach per minute/hour/day data available from digital media. I don’t know why advertisers don’t demand it. I think I know why Social media companies don’t offer it; they’d have to disclose it in anti-trust court cases like this.
The fact that Facebook and Instagram extended their monopoly into Tiktok's business doesnt mean Tiktok is competing with them. It means that Facebook is using their monopoly in social media -- personal social media -- to extend into several different businesses illegally including short form video, marketplace, dating, and AI Chatbots. Our government has not stopped Facebook from extending its monopoly into other company's businesses.
Thanks a lot Brendan - your coverage of the trial is great and super interesting. I am an European competition (antitrust) lawyer, so your series provides me with great insights into the US legal system - which is super interesting!
One question on market definition: should the relevant market be defined with reference to the time when the monopolisation conduct occurred (at the time of the purchase of WA and IG) or to the time of the effects of such conduct (ie now)?
Insane EBITDA multiples were always a feature of dot com 1.0 and 2.0 investment. Not to mention vast numbers of pitches where EBITDA was negative and valuation was sold - and bought - as multiples of (non-earning) user counts.
This was a truly excellent recap.
The media reference to a "favorite attorney" both paints a vivid portrait of the aptitude of journalists covering the trial and grates like nails on a chalkboard to those in the legal profession.
I realize “time spent” is used to measure market share because that is the metric used by ad buyers. But why? When magazines competed against television for a share of ad dollars, they would have loved if ad buyers had bought into that pitch. Because magazine readers spent more time with a magazine than TV viewers spent watching a :30 minute show. Ad buyers didn’t buy that pitch because TV reached more people per minute than magazines. It took time for magazines to build reach, because they relied on “pass-a-long” readership for a significant proportion of their reach.
In the early days of Social Media, their reach also took a long time to build, just like magazines. But Sheryl was able to convince ad buyers that “time spent” was valuable because TV reach per minute (around 33%, when there were three choices) had dropped significantly due to competition. Now, ironically, Social Media reach per minute now surpasses TV, as evidenced by how quickly visceral misinformation can go viral. That’s why reach per minute is the clearest metric for measuring whether there is competition in any media.
That’s a good model. A lot of internet ad revenue depends on convincing the buyers to accept the validity of your pricing model. Often with very little evidence base. Which is why you need persuasive people like Sandberg.
Ironically, theres much more actual reach per minute/hour/day data available from digital media. I don’t know why advertisers don’t demand it. I think I know why Social media companies don’t offer it; they’d have to disclose it in anti-trust court cases like this.
The fact that Facebook and Instagram extended their monopoly into Tiktok's business doesnt mean Tiktok is competing with them. It means that Facebook is using their monopoly in social media -- personal social media -- to extend into several different businesses illegally including short form video, marketplace, dating, and AI Chatbots. Our government has not stopped Facebook from extending its monopoly into other company's businesses.
Thanks a lot Brendan - your coverage of the trial is great and super interesting. I am an European competition (antitrust) lawyer, so your series provides me with great insights into the US legal system - which is super interesting!
One question on market definition: should the relevant market be defined with reference to the time when the monopolisation conduct occurred (at the time of the purchase of WA and IG) or to the time of the effects of such conduct (ie now)?
Thanks
I’m not Brendan but my answer is that the market definition for PSN is constant.
Great coverage!
Insane EBITDA multiples were always a feature of dot com 1.0 and 2.0 investment. Not to mention vast numbers of pitches where EBITDA was negative and valuation was sold - and bought - as multiples of (non-earning) user counts.
“there’s more growth opportunity in an IPO” = the market is stupider than private equity (even after deducting underwriter fees). 😁