Don’t be fooled by reports that Google and Twitter have become “ensnared” in the Federal Trade Commission‘s investigation of Facebook’s $1 billion acquisition of Instagram. Both the search giant and microblogging platform are exactly where they want to be.
This is the best news for both Google and Twitter with some suggesting that they may have both had their hands in prompting the investigation in the first place. The deal puts the most powerful social network in the world in prime position by having the most used mobile photo-sharing company in the world at its disposal. That’s bad because it covers up the only apparent Achilles Heel of Facebook: mobile advertising.
The FTC is investigating whether this will make competition improbable in this arena. It won’t but that won’t stop an investigation that stemmed from the required 30-day review of any deal over $66 million. Now, we could be looking at up to a year before the deal culminates though 6 months is the more likely scenario.
What does this mean for Google and Twitter if its inevitable? It buys them time. Both need to be able to get traction in the mobile arena as quickly as possible before Facebook can lock it down. It won’t be locked down enough for the FTC to do anything, but it will be enough to make them as dominant in mobile photo sharing (and the potential advertising that can come from it) as Google is in search.
Six months won’t be enough time to win for either Google or Twitter to win the battle with their current arsenal, but it allows them to build or buy a service that does have the clout to compete. In the tech world, six months is forever. Both companies hope it will be long enough for them to mount a formidable defense.
- Expect a 6 month freeze on Facebook’s Instagram acquisition (gigaom.com)
- FTC Talks With Twitter, Google About Facebook’s Instagram Deal (fastcompany.com)
- Is Facebook’s purchase of Instagram delayed for up to a year…? (digitaltrends.com)
- Facebook, Instagram deal could be delayed by FTC investigation (digitalspy.co.uk)
- Google, Twitter quizzed on Facebook-Instagram (stuff.co.nz)
- FTC quizzed Google, Twitter in probe into Facebook’s Instagram purchase (mercurynews.com)
- FTC probe may delay close of Facebook-Instagram deal (news.cnet.com)
- Report: FTC Probing Facebook, Instagram Deal (pcmag.com)