There's a reason it's hard to gauge the impact of antitrust investigations: Their effect is often felt in the form of acquisitions that aren't made.

Driving the news: Facebook ditched negotiations that were underway late last year to acquire Houseparty, a video-based social network, the New York Times' Mike Isaac reported Monday. Facebook feared giving more ammunition to antitrust regulators who have paid it growing attention because of its dominant market position.

Why it matters: Acquisitions are the lifeblood of the tech economy, and reducing the flow of such deals could slow the whole sector down.

• Established companies use them to supercharge their growth, bolster their talent pools, and defensively pre-empt competitive challenges.
• For startups, the deals are how founders and early investors can cash out quickly without going through all the hard work (and risk) of building out a major company.

The big picture: Tech history shows that this is one of the most significant ways the threat of antitrust regulation can reshape the industry — and that effect kicks in the moment investigations begin, regardless of whether they move forward to a settlement or a suit.

Flashback: Microsoft, the last major technology company to face substantial antitrust challenge by the government, was sued by the Department of Justice and 20 states in mid-1998 for monopolistic practices in the browser market.

• At almost exactly the same time, Larry Page and Sergey Brin were founding a tiny startup called Google.
• As far as we know, Microsoft never came close to acquiring Google, though it appears to have made a serious run at the company in 2003, before deciding to build its own search competitor instead. (Yahoo also bid for Google more than once.)
• Instead, Microsoft spent 1998–2004 fighting out the browser antitrust case in the courts. By the time Microsoft's final settlement was approved in late 2004, Google had become a public company with a valuation of over $20 billion, and Mark Zuckerberg was founding Facebook in his room at Harvard.

Between the lines: This tale is ancient history for most of us now. But it was a central formative experience for the founders of both Google and Facebook.

• That's why the founders of dominant tech-industry giants have always scanned the horizon for nascent competitive threats: They know it's how they got their own start.
• But today, Google and Facebook each face the reality of multiple antitrust investigations. If they spy an upstart startup that could become a future challenger, they'll be much less likely to be able to take it out of the game by acquiring it.

Most likely, Houseparty isn't that company. But it could be practically anyone with a great enough new idea.

Yes, but: Antitrust fears haven't yet stopped all big-tech acquisitions in their tracks. In June, Google acquired data analytics firm Looker for $2.6 billion.

Some acquisitions (see above) are all about growth and competition. Others — like the deal announced yesterday in which WordPress parent company Automattic is acquiring Tumblr from Verizon Media — are all about decline and consolidation.

By the numbers: Automattic reportedly paid a "nominal" sum for Tumblr, per the Wall Street Journal. The actual figure, reports Axios' Dan Primack, was around $3 million.

• The service previously sold for $1.1 billion to Yahoo in 2013.
• Yes, that means Tumblr dropped to .3% of its previous value.

Background: Tumblr was once the trendiest of social networks. A last holdout of the nonconformist spirit of the early web and the blogging movement in the age of Facebook, it proudly hosted renegade content, including porn, that more mainstream networks shunned.

• That, of course, made it less attractive to advertisers, and therefore less valuable as a business.
• Still, it had a coveted youthful demographic, which was why — despite all the unmonetizable content — its founders were able to sell it to Yahoo.
• But Verizon acquired Yahoo in 2017, banned porn from Tumblr in 2018, and then decided to sell the service. As of May, Pornhub had been the only bidder to show public interest.

Where it stands: Automattic is the last major company to actively develop, promote and maintain a blogging platform and software.

• Google still operates Blogger but doesn't invest much in it.
• Medium, the media platform founded by Blogger and Twitter founder Evan Williams, inherits some of the blogging world's traits but is dedicated to longer-form writing.

What they're saying: From Tumblr's announcement: "Automattic shares our vision to build passionate communities around shared interests and to democratize publishing so that anyone with a story can tell it, especially when they come from under-heard voices and marginalized communities."

Our thought bubble: Tumblr's new owner is probably more likely to be a better steward of its community than, say, a porn site or a telecommunications giant.

A new piece from Wired's Nitasha Tiku retells the trials of Google's last three years in the form of an epic saga tracing the decline of an open corporate culture of "don't be evil" into partisan trench warfare, including:

• James Damore's firing for suggesting women might be biologically less well-equipped to be engineers than men, and his subsequent lawsuit.
• Subsequent media leaks from inside Google's previously confidential and freewheeling internal companywide meetings.
• The controversy around Google's participation and then withdrawal from Project Maven, a Pentagon-funded AI project designed to improve drone targeting.
• Another controversy around Project Dragonfly, Google's abortive exploration of returning to the China market with a search tool that followed government censorship rules.
• Revelations of Google's settlements with executives accused of sexual harassment, which sparked a walkout of 20,000 employees.

Why it matters: These individual stories have all been told before, but Tiku's narrative adds new detail and puts them in a larger context: the transformation of a company that was once able to process conflict internally into one in which both employees and management take their fights outside.

"The company would find itself in the same position over and over again: a nearly $800 billion planetary force seemingly powerless against groups of employees — on the left and the right alike — who could hold the company hostage to its own public image...."

"Over the past three years, the structures that once allowed executives and internal activists to hash out tensions had badly eroded. In their place was a new machinery that the company’s activists on the left had built up, one that skillfully leveraged media attention and drew on traditional organizing tactics. Dissent was no longer a family affair. "

"And on the right, meanwhile, the pipeline of leaks running through Google’s walls was still going as strong as ever. "

Worthy of your time

Trading places

• Todd Levy, BuzzFeed's former CTO, is joining Ro, a startup focusing on men's health products, as its CTO (TechCrunch).
• Former SoFi CMO Joanne Bradford joins Honey, the L.A.-based startup that aggregates e-commerce coupons, as its president.

ICYMI

• Brazil's far right attribute their movement's rise to YouTube. (The New York Times)
• How Jeff Bezos is not being a control freak with his philanthropy for the homeless. (Vox/Recode)
• European job listings sites plan complaint to EU about Google practices. (Reuters)
• Why twins are taking over YouTube and Instagram. (The Atlantic)

A young person in Japan wanted to know why the "save" button in his spreadsheet program used a strange square icon that, to him, resembled a vending machine. Like an increasing multitude, he had never seen a floppy disk.