The end of the everything app: The thinking behind Meta’s move to tear Instagram in half and spin out Meta AI

Some of Meta’s features want to move out of Mom’s basement.

Yesterday we learned that the social media behemoth may spin off Reels, its short-form video product and TikTok competitor, from the Instagram mothership, the The Information reported. Per CNBC, we also learned it’s launching Meta AI, its ChatGPT competitor that had previously existed as a chatbot on its Facebook, Instagram, WhatsApp, and Messenger apps, as its own stand-alone app.

Why the sudden unbundling? We have some ideas.

1. It’s a way to set itself apart from uncool Facebook. While breaking off apps has been a standard playbook for Meta over the years, the need to distance its new apps from its old has lately become more acute. Facebook, and to a lesser extent Instagram, have grown long in the tooth and, as the kids say, cheugy. They certainly don’t poll well among young people, who prefer TikTok and SnapChat. Separate apps could help Meta shed some of its most unattractive baggage. Personal request from a not-quite-young person: please spin out Marketplace, too.

2. It lets Meta focus on the competition. Breaking off Reels and Meta AI allows Meta to more directly compete with TikTok and ChatGPT, which are typically at the top of the app store while Facebook and Instagram languish further back. Rather than simply copying its competitor apps and then burying that functionality in the bowels of its existing offerings, Meta is now seemingly giving users what they want: the other apps. It can also focus more on making these smaller apps better or at least more comparable to their competition (read: TikTok’s algorithm is a lot better). It’s worked before — look no further than Meta’s successful launch of Threads, a stand-alone competitor to Twitter/X that launched in 2023 and already has 300 million monthly active users.

3. Americans want an app for everything, not an everything app. It’s notable that this move from Meta runs counter to its previous push to be the WeChat of the West, a mega app that’s all things to all users, offering everything from social media to subscriptions, food delivery to friendship, payments to plane tickets. It’s a concept that has never really caught on in the US, and it looks like perhaps Meta is realizing this. Of course, Elon Musk is still carrying this mantle aloft at X, which most recently partnered with Visa so users can make real-time payments on the “everything app.”