Instagram Quarterly Review (October 9, 2017)

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Case 4:22-md-03047-YGR Document 2887-56 Filed 03/27/26 Page 1 of 5 AMENDED Exhibit 666 PLAINTIFFS' OMNIBUS OPPOSITION TO DEFENDANTS' MOTIONS FOR SUMMARY JUDGMENT Case No.: 4:22-md-03047-YGR MDL No. 3047 In Re: Social Media Adolescent Addiction/Personal Injury Products Liability Litigation Message Case 4:22-md-03047-YGR Document 2887-56 Filed 03/27/26 Page 2 of 5 From: [/O=THEFACEBOOK/OU=EXCHANGE ADMINISTRATIVE GROUP (FYDIBOHF23SPDLT)/CN=RECIPIENTS/CN= Sent: 10/9/2017 2:01:35 AM To: Mark Zuckerberg CC: mzadmin Subject: Tomorrow -- 10:00am start @ MPK Attachments: image001.png; Proj Campaign Update 100917.pdf; search small group october update.pdf; IG Quarterly Review 10- 8-17.pdf; Marketplace - New Biz Review 10-9-2017 FINAL.PDF; OC4 Slides.pdf Pre-reads attached: Project Campaign SG: Search_Will (Sheryl unavailable) SG: Instagram_Kevin (Sheryl unavailable) New Biz Discussion - Marketplace Final OC4 slide + video review + voice over Other meetings tomorrow: 10:00am 1:1 w/Sheryl 11:00am Small Group O Alex PTO Naomi dialing in (DC for MPW Summit) Adam PTO (in flight) departing early (12 noon) 2:30pm Prep, login for Live in Spaces, Aquarium 3:00pm Live in Spaces, Aquarium 4:30pm Aloha Naming ( Flag: will be in flight) Aditya Agarwal @ CZI, meeting with: Cori Bargmann, President of Science Director of Recruiting Peggy Alford, CFO David Plouffe, President of Policy & Advocacy Head of Product & Interim Head of Engineering Jim Shelton, President of Education Reminders: 8:00am Workout with 6:00pm Family dinner (Nichole cooks, Chef Quincy trial) CONFIDENTIAL META3047MDL-050-00331327 Case 4:22-md-03047-YGR Document 2887-56 MONDAY Filed 03/27/26 Page 3 of 5 9 From Oct 1 Chris 000; parental leave (10/1-1/9/18) To Jan 9, 18 From Oct 8 Chef Quincy in PA FYI: Aditya @ CZI 0 Workout with Edgewood 9 10 Sherly/Mark-1:1) The Aquarium; Mark Zuckerberg Project Campaign: The Aquarium + BJN //https://bluejeans.com/5105795823; Mark Zuckerberg Small Group: The Aquarium + BJN//https://bluejeans.com/6505434810; Mark Zuckerberg 11 SG: Search (Will) The Aquarium; Mark Zuckerberg 12M SG: Instagram (Kevin) The Aquarium; Mark Zuckerberg MTG: New Biz Discussion-topic "Marketplace" 1 MPK20, Zone 3, Sheryl Sandberg 2 ε 5 6 7 8 DNS Prep + login for Live in Spaces; The Aquarium; Mark Zuckerberg Live in Spaces: The Aquarium, Mark Zuckerberg Final OC4 slide + video review + voice over The Aquarium, Mark Zuckerberg Aloha naming: The Aquarium; Mark Zuckerberg OPEN TIME Family Dinner (Nichole cooks, Chef Quincy Trial) Bath night Edgewood CONFIDENTIAL META3047MDL-050-00331328 Case 4:22-md-03047-YGR Document 2887-56 Filed 03/27/26 Page 4 of 5 Instagram Quarterly Review 9 October 2017 We've made significant progress on growth, sharing, time spent, revenue and user safety goals this half. You can review our most recent metrics in the monthly goals summary I emailed last week. However, there are five areas you should be aware of and I could use your help addressing: 1 Feed is in trouble; stories, video and carousel are the culprits 2 WhatsApp status has stunted IG Stories growth 3 Ads in Stories is making >$1m/day and is set to make $1.2B in 2018 4 Camera / Direct App is coming along, but faces an uphill battle with visual messaging 5 Instagram PAC is far behind FB PAC and we could become a major liability for FB Inc. Feed is in trouble; stories, video and carousel are to blame While feed time spent per DAP is up 10.6% y/y to 7.46 min, impressions per DAP are down 5.2% y/y. We forecast ending the year ~85 daily impressions against an original projection of 90. This is a problem for a variety of reasons, but namely that monetization is directly tied to the number of impressions we generate. The causes for the decline in impressions are: Shift to Stories production: Today, 20% of DAP produce OBPS (+13% since last year) and overall OBPS/DAP on Instagram is up significantly. However, this increase has come at a cost: previous high feed producers have switched to producing Stories. We're seeing a sharper decline in feed production than ever before. Weekly feed sharing participation is down 13.2% y/y. The decline in feed sharing impacts feed engagement since there is less available feed inventory. We believe this contributes 50% of the overall impressions decline. Video: People are watching much more video, which means they're scrolling through less of feed. We believe this contributes 30% of the overall impressions decline. Note that we do not artificially boost videos but videos/DAP are +5% y/y while photos/DAP are -29% у/у. Carousel: The Carousel format has increased from 4% to 10% of feed posts and 30% of feed media. Producers post less because they combine posts into one carousel unit, and people spend more time viewing carousels which causes them to consume fewer posts in feed. We believe this contributes to 20% of the overall impressions decline. WhatsApp status has stunted IG Stories growth Since the beginning of 2017, Stories producer PR has grown from 6% to 9.5%, and consumption has grown from 40% to 57% of DAP. However, growth rates have stalled and participation has flattened. The slowdown is most pronounced in Latin America, where our growth has stopped in some countries after WhatsApp launched Status. Stery Production PR by Group Towns and Callege WA Status Launch HIGHLY CONFIDENTIAL (COMPETITOR) +17% m/m South America +1% m/m (May to June) Rest of the World +6% m/m +4% m/m Central America ४ META3047MDL-050-00331333 Case 4:22-md-03047-YGR Document 2887-56 Filed 03/27/26 Page 5 of 5 Instagram Quarterly Review 9 October 2017 We believe there is an opportunity to partner with WhatsApp for cross-pollination to revive growth but we haven't made it on their roadmap. We've seen a similar strategy work out well between Instagram and FB, where Instagram Stories cross-posting has lifted FB Stories ~35% on average in recent tests. Support and encouragement to create sharing among the family would be very helpful to ensure the future success of all stories products. Ads in Stories is making >$1m/day and is set to make $1.2B in 2018 We've seen strong adoption for ads in Stories over the last quarter, especially in September. Revenue hit $1.1M/day in Q3 and we have 20,000 active advertisers. Engagement impact to Stories has been minimal even though we are now at 7% ad load (Stories DAP vs Holdout: -0.07%). The revenue growth has come from a combination of product work as well as strong demand from the sales team (70% GSO and 30% SMB). Based on this strength, we have raised our H2 Stories revenue goal from $142M to $207M, an increase of 47%. Next year our target is $1.2B. In Q4 we will be rolling out placement optimization support and performance enhancements such as multi-part story ads as well as improvements to liquidity by supporting non 9:16 media organically and in ads. Camera / Direct App is coming along, but faces an uphill battle with visual messaging Direct is growing quickly. Media sharing is growing 116% y/y-mostly from the addition of ephemeral messaging in November 2016. Ephemeral senders have grown from 1.5M to 10M per day. However, despite growth this behavior is still only a 1.5% of overall sends. Snapchat visual sends are ~50% of total. The majority of conversations on Direct are from Stories replies or feed post re-shares. To be successful, we will have to evolve the Direct use case beyond replies and re-shares and close the gap in visual messaging volume. We think we can accomplish that by spinning Direct out of IG and creating a standalone camera-first experience that's focused on visual sharing between friends while not losing the link to IG. This quarter, our plan is to launch a standalone Direct app in 6 countries: Turkey, Israel, Portugal, Chile, Italy and Uruguay. These are markets with a high participation rate of Direct and visual messaging, and where we have 2x the reach of SC. We will promote the new app in those countries via Instagram, create a clean push channel for the app, and deep-link between the IG and Direct app experiences. We hope to get in market quickly and learn how we can successfully diode a product. The good news is that we've also seen strong Direct growth for US teens: their sends are +43% y/y. Instagram PAC is far behind FB PAC and we could become a major liability for FB Inc. Instagram is now over 850M monthly users, and with that size comes the responsibility to ensure our community is safe. Also, we're launching more new products at a faster rate than ever, each of which require additional work to prevent abuse and reduce exposure for FB inc. We're continuing to see an increase in high intensity abuse and an increase in regulatory requirements, including GDPR. However, the PAC team is only 22 engineers. We aren't staffed to both integrate with FB and do IG specific work to stay ahead of all potential PAC related issues. To solve this, we are working with FB Integrity leads to (1) staff more IG-specific PAC engineers to focus on measurement/labeling, top account security, and tooling and (2) to staff IG- dedicated engineers on the FB/PAC team to support the x-FB Integrity Framework. In 2018, we will staff up this team significantly, though we are starting from far behind. HIGHLY CONFIDENTIAL (COMPETITOR) META3047MDL-050-00331334