Mark Zuckerberg’s emails, from lawsuits and leaks

One business questions I've been thinking about recently is how much we should be willing to pay to acquire mobile app companies like Instagram and Path that are building networks that are competitive with our own. These companies have the properties where they have millions of users (up to about 20m at the moment for Instagram), fast growth, a small team (10-25 employees) and no revenue. The businesses are nascent but the networks are established, the brands are already meaningful and if they grow to a large scale they could be very disruptive to us. These entrepreneurs don't want to sell (largely inspired our success), but at a high enough price -- like $500m or $1b -- they'd have to consider it. Given that we think our own valuation is fairly aggressive right now and that we're vulnerable in mobile, I'm curious if we should consider going after one or two of them. What do you think about this?

I wonder if we should consider buying Instagram, even if it costs ~$500m. Right now they seem to have two things that we don't: a really good camera and a photo-centric sharing network. For the camera piece, their camera just takes photos that look much nicer than the native camera because of their filters, tilt-shift effects and even their new lux feature. I just took a photo this morning from the native camera and uploaded it to FB and it looked so low quality compared to the Instagram shots I see. Theoretically we could go build this technology, but I'm worried we're so far behind that we don't even understand how far behind we are and that this is going to be a huge amount of work. (For example, Schrep was telling me yesterday that some people on the photos team think the new Instagram camera isn't good, but it introduced this awesome new lux feature that essentially double their number of filters and seems to improve the quality of every photo I try to take with it.) Given this, I worry that it will take us too long to catch up, if we even will. And regardless, their brand is established as the awesome mainstream camera, so even if we catch up on features they're still the awesome iPhone camera app. For the network piece, one concerning trend is that a huge number of people are using Instagram every day -- including everyone ranging from non-technical high school friends to even FB employees -- and they're only uploading some of their photos to FB. This creates a huge hole for us and one that I'm sure anything we're going to do on platform or with social dynamics will completely solve. Sometimes you don't want to bug all your FB friends with a lot of photos so you put them in the photo-posting place instead. With Snap, our basic thesis is that what people need is a good way to post a bunch of photos on FB. We're doing some work on filters but not a ton, and the team is approaching this more as a nice feature and somewhat of a gimmick. Instagram, on the other hand, is approaching this problem from the perspective of how to help people take beautiful photos. I think it's quite possible that our initial thesis was wrong and that theirs is right -- that what people want is more to take the best photos than to put them on FB. If so, Snap might be a good first step but we'd be very behind in both functionality and brand on how one of the core use cases of Facebook will evolve in the mobile world, which is really scary and why we might want to consider paying a lot of money for this.

Justin Osofsky: >Twitter launched Vine today which lets you shoot multiple short video segments to make one single, 6-second video. As part of their NUX, you can find friends via FB. Unless anyone raises objections, we will shut down their friends API access today. > >We've prepared reactive PR, and I will let Jana know our decision. Mark Zuckerberg: >Yup, go for it.

I think we should block WeChat, Kakao and Line ads. Those companies are trying to build social networks and replace us. The revenue is immaterial to us compared to any risk. And I agree we should use ads to promote our own products, but I'd still block companies that compete with our core from gaining any advantage from us. I'd also keep blocking Google but otherwise wouldn't extend the block to anyone else.

I assume this isn't true, but can you confirm? http://m.digitaltrends.com/social-media/google-acquiring-whatsapp/ If you are thinking of having WhatsApp join another company, we'd of course love to talk at this price range and are almost certainly a much better fit than Google! Separately, we should hang out again sometime soon. I never got back to you about last weekend since I was busy getting ready for the Home announcement. But let me know if you're around in the next couple of weekends.