Instagram Co-Founders Resign
Kevin Systrom and Mike Kriegerleaving have announced that they are leaving Facebook Inc. after growing tensions with Chief Executive Officer Mark Zuckerberg over the direction of the photo-sharing app, people familiar with the matter said.
The co-founders who have been at the company since Instagram’s acquisition by Facebook in 2012, had been able to keep the brand and product independent from Facebook. Lately, they were frustrated with an unusual uptick in day-to-day involvement by Zuckerberg, who is now more reliant on Instagram for Facebook’s future growth.
Without the founders around, Instagram is likely to become more tightly integrated with Facebook, making it more of a product division within the larger company than a separate app, the people said.
The New York Times earlier reported Systrom and Krieger’s departure. The founders confirmed their decision in a blog post, although Facebook didn’t immediately have a comment on the tension.
“Kevin and Mike are extraordinary product leaders and Instagram reflects their combined creative talents,” Zuckerberg said in a statement. “I’ve learned a lot working with them for the past six years and have really enjoyed it.”
Krieger and Systrom built Instagram and sold it to Facebook for $715 million six years ago. Instagram, which now has more than one billion users, is a key driver of revenue for Facebook.
“We’re planning on taking some time off to explore our curiosity and creativity again,” Systrom said in a statement on the Instagram blog. “Building new things requires that we step back, understand what inspires us and match that with what the world needs; that’s what we plan to do.”
Technology stocks have propelled the U.S. stock market to record highs in recent years, with FAANG shares (for Facebook, Apple, Amazon, Netflix and Google) soaring about 58 percent last year. But Facebook has turned into a drag on the group. The social media giant’s shares posted the biggest one-day stock-market wipeout in American history in July after sales and user growth disappointed investors.
Its shares are down more than 6 percent this year after rising every one of the previous five years. All the other companies in the FAANG group are up this year. The Instagram departures may put further pressure on its stock.
While Facebook has endured scandals on privacy, fake news and election interference, Instagram’s brand has remained mostly untarnished, and continued to grow users rapidly. Facebook, which is running out of people in the world to add to its product, has become increasingly reliant on the photo-sharing app for its future.
The company has started mentioning Instagram more frequently on its earnings calls and taking credit for its success. In the most recent call, Zuckerberg explained that Instagram grew twice as fast being part of Facebook as it could have on its own, a statement that many Instagram insiders felt was unnecessary and unprovable.
The departure of Instagram’s founders comes just weeks after Facebook decided to bring Instagram’s chief operating officer, Marne Levine, back to Facebook to become its global head of business development. Earlier this year, Adam Mosseri, who formerly ran Facebook’s news feed, was brought to Instagram to be head of product. He’s the most likely successor for the founders, people familiar with the matter have said, though Facebook declined to comment on who might take over.
Within about a year, Facebook has lost several top executives at its biggest acquired properties. Brian Acton and Jan Koum, the founders of WhatsApp, announced their departures after disagreements with Zuckerberg over the messaging application’s business model.