Trouble for Facebook Inc again by the US Federal Trade Commission (FTC). They have taken a major step based on a lawsuit filed against Facebook. Lawsuit wants Facebook to split its product and services and operate independently. The Trade Commission has accused Facebook of suppressing competition by taking advantage of its monopoly position in the social networking space.
Let me tell you that FTC and the group of provinces have focused their attention on the purchase of the company’s two social media acquisitions. Facebook acquired Instagram in 2012 for $ 715 million and two years later WhatsApp for $ 22 billion. The commission said in a complaint filed on Wednesday that Facebook wanted to remove the risk of competition by buying these two companies.
FTC suggested split of company is big Trouble for Facebook
The FTC has suggested splitting Facebook into two pieces. If this will happened then Facebook CEO Mark Zuckerberg’s business empire and monopoly in social media space will get over. The Instagram is a major contributor to the company’s revenue growth. And WhatsApp continuously growing and contributing to the company’s payment gateway and digital commerce space. With the split of these two platforms from Facebook will reduce their monopoly in social media space.
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The company investors believe that split of Instagram and WhatsApp will hit the Facebook business model. Although the company is confident that this lawsuit may not be able to split these two platforms from Facebook. The split of social media giant need certain change in exiting law and parliament approval. And the possibility of these changes looks very low. But you never know the decision of government after the final verdict from the court of law.
Facebook shift their focus on digital shopping space in recent years
Let me tell you that Facebook users experience has reduced in recent years due to the high volume of Ads on the platform. Due to this company has shifted its focus and exploring revenue possibility in digital shopping space. Recently the company made the option of shopping through images and videos on Instagram. They also added WhatsApp option for customers to communicate in digital shopping space. With these three platforms together Facebook is unbeatable in social media and digital shopping space.
Also Read: Facebook acquired Giphy to support Instagram
Instagram will continue to drive a large revenue for Facebook Inc
Let me tell you that Facebook Inc is getting revenue growth from Instagram in recent years. The company got $20 billion revenue in 2019 from the photo and video sharing app. This is 29% to total Ad revenue for Facebook Inc. As per research firm eMarketer Instagram’s sales revenue expected to be $ 28.1 billion in 2020. This will be equal to 37% of Facebook’s total ad revenue. This means Facebook will get a major share of growth in ad revenue from Instagram this year.
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Facebook does not earn any revenue from WhatsApp at present. But the WhatsApp aggression in payment gateway and E-commerce will soon change the business revenue fro Facebook. The two billion-plus users will soon change the revenue stream for the company.
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