NEW YORK (TheStreet) -- We now accept that Facebook (FB) is a social media juggernaut that can't be stopped. But it wasn't at all a foregone conclusion back in early 2012 before its initial public offering.
If Apple (AAPL) had been more aggressive and bought Instagram before Facebook could, the world would be a much different place. There were a lot of reasons why Tim Cook should have done the Instagram deal. But he didn't.
That looks like the most brilliant deal by Zuckerberg now in hindsight for several reasons:
- He paid in stock.
- He bought it for a song (now in hindsight) right before it exploded in popularity.
- He took out what could have been a major competitor to him as an alternative social network either independently or as part of a more powerful competitor.
And it's on that last point that it's interesting to ponder now, especially in light of a recent verbal scuffle between Zuckerberg and Cook. A few months ago Cook seemed to take a swipe at Google (GOOGL) when he said, "If [companies are] making money mainly by collecting gobs of personal data, I think you have a right to be worried... And companies I think should be very transparent about it."
While Cook might have been trying to differentiate Apple's iOS from Android as a phone choice, it prompted this response from Zuckerberg in Time:
"A frustration I have is that a lot of people increasingly seem to equate an advertising business model with somehow being out of alignment with your customers ... I think it's the most ridiculous concept. What, you think because you're paying Apple that you're somehow in alignment with them? If you were in alignment with them, then they'd make their products a lot cheaper!"