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I agree with your premise that breaking up FB, WA and IG doesn't really do anything (I made a much longer comment about this in a reply above). But what would breaking up facebook even mean then? Fundamentally there's no equivalent to the geographic breakup, as physical natural monopolies emerge because you can only have one company per unit of natural resource. Facebook is a monopoly because of network effects, and…
Its absolutely possible to break facebook up horizontally. And if the government were to explore a breakup, its the way they should go. Company 1 would be a Social Networking and Hosting PaaS from hardware, networking, bandwidth, databases, serverless workers to services like ads, anti-evil, localization, social graph, development tools, frameworks, runtimes. Company 1, would be THE place to build a social network, i…
I think the idea of your "company 1" is actually super interesting, essentially social Graph as a Service(GAAS?). But , I don't think that addresses any of the issues people actually have with facebook. What does facebook running both the front and backend of their site have to do with their market power?
That company 1 would still retain 90% of Facebooks value, as it would be the social graph where people acknowledge their real life connections. It would still have all the privacy liabilities, in fact Facebook's largest scandal (Cambridge Analytics) was due to the face they were too open with the social graph! And that it was misused! If we're selling the social graph now can't there be a million politically oriented "research operations" that spring up and use it?
Also, FB, IG and WA all have separate social graphs, them being frontend skins on one service doesn't reflect that. So they'd likely be completely separate companies full stop, maybe using a couple services from GAAS like spam algos. Sure new, potentially better frontends for FB could pop up with more specialized niches, but facebook is already exploring that with messenger and events getting their own apps and sites.