More than seven years have elapsed since Facebook bought Instagram for $1 billion. At the time, Instagram was known for its photo filters and was just reaping the rewards of dropping its Android version of the app. In hindsight, that was a spectacular deal for Facebook as Instagram now has over 1 billion monthly active users and some estimate that it takes in $2 billion a month in advertising revenue.
In October 2014, Facebook closed on its purchase of messaging app WhatsApp. The final price was over $21 billion. At the time of purchase, the messaging app was free to users for a year and $1 a year thereafter, although that charge was removed in 2016. Annual revenue, estimated by Forbes, is $5 billion and the app will start running ads next year on its own version of Stories called “Status.” WhatsApp has more than 1.5 billion daily active users.
Because Facebook didn’t go around and promote its ownership of Instagram and WhatsApp, it is quite possible that the vast majority of the smartphone-wielding public doesn’t even know that all three are owned by the same company. But that apparently is going to change. The Information cites three unnamed sources who revealed that Facebook’s properties are going to have new branding. The two apps will be known as “Instagram from Facebook” and “WhatsApp from Facebook.” The report notes that employees have already been informed about this surprising move that comes as a shock since the two have been running autonomously since their acquisitions.
So why would Facebook do this now? After all, Instagram and WhatsApp both have achieved strong growth without having the Facebook name included with their branding. There is an answer. Reportedly, Facebook CEO Mark Zuckerberg is upset that the company doesn’t get enough credit for the two apps’ success. But another reason might have to do with the FTC’s investigation into Facebook and the calls from some presidential candidates to split up the company into separate units. By adding the “…from Facebook” line, it could appear to FTC staffers that those using Instagram and WhatsApp realize that they belong to one big happy Facebook family. Before adding the new branding, the FTC could have pointed out that most Instagram and WhatsApp users didn’t know who owned the apps and therefore breaking up Facebook wouldn’t matter to them.
It is doubtful though that such a strategy will stop those calling for Facebook to be split up. With great power comes great responsibility and that is something that Facebook has yet to prove it can handle.
