At the end of July last year, Mark Zuckerberg and his top executives in the Facebook group sat down in a boardroom to partake in a quarterly earnings call with the company's top investors. It was likely that, given the scandal that had just engulfed the company in the wake of Cambridge Analytica and the U.S. Presidential Elections, it wasn't going to be pretty.
It wasn't, and it soon became clear that the company's growth rate — a key metric for the performance of any tech company — was going to hit historically low levels. Almost immediately, Facebook's stock value plummeted by over 20%. Mark Zuckerberg himself lost over $20 billion of his net worth in the process.
It's easy to assume Facebook would have been all too eager to attribute blame to these external forces, but according to an in-depth report from WIRED earlier this year, Zuckerberg also had his attention firmly fixed on the internal workings of his own company, in particular whether or not the success of other names within the Facebook group could have been cannibalising the success of what's internally known as 'The Blue App'.
"We believe Instagram has been able to use Facebook’s infrastructure to grow more than twice as quickly as it would have on its own. A big congratulations to the Instagram team—and to all the teams across our company that have contributed to this success," he said in his script for the call.
Zuckerberg's praise wasn't entirely earnest, however, and there's a long history of distrust within the Facebook hierarchy directed primarily at the success of the app that they purchased back in 2014. Top executives in the company expressed concerns about the explosive growth of Instagram almost as soon as they acquired it, and by 2017, the data was starting to show that people had turned towards sharing on Instagram rather than the Blue App.
At this point, Facebook began to interfere more regularly in the workings of a company that, up until that point, had largely operated under the influence of its two original founders. Shortly before Mark Zuckerberg testified before Congress to explain the company's role in Cambridge Analytica, he placed Chris Cox, the head of Facebook's Blue App, in charge of WhatsApp and Instagram as well.
"A few days later [from the investor's call]," reported WIRED, he asked his head of growth, Javier Olivan, to draw up a list of all the ways Facebook supported Instagram: running ads for it on the Blue App; including link-backs when someone posted a photo on Instagram and then cross-published it in Facebook News Feed; allowing Instagram to access a new user’s Facebook connections in order to recommend people to follow," "Once he had the list, Zuckerberg conveyed to Instagram’s leaders that he was pulling away the supports."
Just after this, Instagram was also subject to Facebook prototyping a location tracking algorithm within its app, a move that went staunchly against Instagram's traditional ethos. This was reflective of the struggles of Instagram to maintain its corporate identity in an environment where, to its detriment, Facebook prioritised growth over all other company goals. 6 months later, both of Instagram's founders had left the company, as had the founders of WhatsApp.
According to WIRED, "Friends of Systrom and Krieger say the strife was wearing on the founders too. According to someone who heard the conversation, Systrom openly wondered whether Zuckerberg was treating him the way Donald Trump was treating Jeff Sessions: making life miserable in hopes that he’d quit without having to be fired. Instagram’s managers also believed that Facebook was being miserly about their budget. In past years they had been able to almost double their number of engineers. In the summer of 2018 they were told that their growth rate would drop to less than half of that."
After reading this, Facebook's move to rebrand both Instagram and WhatsApp more soundly in its own image takes on an entirely different air. Facebook's explanation for the move, which will see both WhatsApp and Instagram's brands appear as 'Instagram from Facebook' and 'WhatsApp from Facebook' on both major App stores and in the app's publicity materials, is that they want "to be clearer about the products and services that are part of Facebook."
Strategically, this could be necessary, as a 2018 survey found that over half of Americans had no idea Facebook, who they may not necessarily feel comfortable using, owns Instagram. It might not, however, be the act of solidarity it would appear to be on the surface.