On his excellent Stratechery site, Ben Thompson writes about Facebook's 'Social Conglomerate.' He makes a few excellent arguments about what distinguishes Facebook's spread into different portions of the social graph from previous efforts by other tech companies. The two that stuck out to me were that Facebook is focused on Attention, and that it is building a Conglomerate (of different brands).
This idea - that a company would expand, through different brands, to attempt to dominate the entire life of one consumer is not new. It's actually exactly parallel to a story that began over 100 years ago, with one William Durant. His corporation, General Motors, spent the last century trying to do to the automotive market what Facebook is doing to the social media market. While they carved out a huge portion of the market, this strategy ultimately led to overreach, downfall, and bankruptcy.
Ben argues that Facebook buying WhatsApp extends its influence to the four corners of social media - Permanent/Ephemeral and Asymmetric/Symmetric - with Facebook covering the permanent side, and Instagram & WhatsApp covering the ephemeral. GM, in the sixties, covered a similar spectrum of brands - Sports vs. Comfort and Luxury vs. Affordability - with Pontiac, Chevrolet, Buick, Oldsmobile, and Cadillac. Facebook's strategy is a winning one, if cribbed from GM's, because it offers a social media user the opportunity to (eventually) manage their entire digital existence with one login - and one identity - for their entire life.
GM achieved its goal of creating life-long customers who moved up the value chain - my grandfather progressed from Chevrolet to Buick and Oldsmobile over the course of his driving life (despite a dalliance with Honda in the early '90s). Hundreds of thousands of others followed this path up the value chain - leading to decades of record profits for GM. Eventually, though, the practice of maintaining many separate divisions and assembly lines led to decreased quality, and an inability to fight off competition - while limiting the ability to cut costs. If - and it is a big if - Facebook can avoid the quality decline from being market leader, it might be able to avoid the same fate. Nevertheless, the practice of making huge acquisitions that essentially live on as separate companies (Instagram, WhatsApp) is concerning - because it leads to the same kind of problems that felled GM. And I'm pretty sure no Facebook bailout is forthcoming.