Big Tech Sets Up a ‘Kill Zone’ for Industry Upstarts

Back in the early days of digital photography, I used a website called Picasa to organize and share my photos. It was like a whole new world opened up to me — suddenly I could get feedback from much more experienced and skilled photographers halfway around the world, discover their work and find visual inspiration. But by the time I started using it, Google had already acquired the company. During the next few years, the app seemed to stagnate — there were rumors that Google was starving it of resources, and users drifted away. In 2016 Picasa was killed off for good, and anyone who still had photos there had them moved to Google Photos — a site I have never heard of anyone using.

Of course, that didn’t signal the end for online photo sharing — Instagram has become everything Picasa ever was, and much more. The nature of network effects means that it’s hard for multiple photo sharing sites to exist — everyone has an incentive to congregate on the site that has the most users. But if Google had put more resources into Picasa — or failed to acquire it in the first place, and left its destiny in the hands of its founders — it might have won the market instead of Instagram, which received large and sustained investment after being acquired by Facebook. And Picasa’s acquisition, and subsequent decline, was a powerful demonstration of big tech companies’ ability to devour and destroy promising young startups. Similar things have happened to some other companies in the social-media space.