> Another term for it is market differentiation.

Companies differentiate products to avoid competition. It’s marketing 101.

But... they're still competing.

You don't think ballpoint pens and gel pens compete with each other?

Just because the consumer gets more choice doesn't mean they're not competing.

The difference between Coke and Pepsi is marketing and flavor, but they directly compete in the same market. The products they have are virtually the same, only minor differences.

The product differences between, say, Facebook and YouTube are night and day. You wouldn't add an acquaintance on YouTube and start messaging them through that platform. I'm not sure you can even message people like that on it anymore. But you can on Facebook. They're fundamentally different products, they only align because they both have some sort of social aspect to them. Kind of.

I'd look at it a different way: "Facebook" and "YouTube" aren't single products, but rather each one is a collection of something like 10-20 products that live on a single platform.

For "viral videos", Facebook and YouTube (and Reddit) absolutely directly compete in the same market.

For "educational videos", YouTube competes with other platforms.

While for "tracking social acquaintances" Facebook competes with the Contacts apps by Apple and Google, as well as other messaging apps.

Really there's no such product category as a "Facebook" or a "YouTube". And Facebook's original product category -- to keep track of social contacts and post public and private social messages -- is now only a tiny part of Facebook.

This is a matter of perspective. Being intimately familiar with the differences between YouTube and Facebook, you can point out many differences. I'm sure if you were a food scientist or food marketing exec you could point out many difference between different soft drinks. These differences are market differentiators, not evidence of being in an entirely different market. Outside of the tech sphere, people see social media as a monolith in the same way that you see the soft drink industry.

Facebook and YouTube are both in the market for users to show advertising to, and generally every minute spent on one is a minute explicitly not spent on the other. If facebook were selling communication with friends, then YouTube would not be a competitor, but that's not Facebook's business, nor would anyone argue that Facebook has a monopoly on talking to your friends.