Published: Wed, September 26, 2018
Money | By Arnold Ball

Facebook posts an ugly snapshot of Instagram's future

Facebook posts an ugly snapshot of Instagram's future

The founders, Kevin Systrom and Mike Krieger, grew frustrated as Facebook impinged on their autonomy.

Instagram co-founders Kevin Systrom and Mike Krieger have resigned as chief executive officer and chief technical officer of the photo-sharing app.

Facebook doesn't disclose how much money Instagram pulls in, though Wedbush analyst Michael Pachter estimates it'll be around $6 billion this year, or just over 10 percent of Facebook's expected overall revenue of about $55.7 billion. Under Facebook's umbrella, it has grown to reach over a billion people, making it one of the social media giant's most successful acquisitions.

"Kevin Systrom loyalists are probably going to leave", Akhtar said.

In a statement on Monday, they said they were taking time off to explore their "curiosity and creativity" and start "building new things".

The founders of Instagram, the photo-and-video app that Facebook agreed to buy shortly before its 2012 IPO, are leaving the company.

Facebook shares fall after Instagram co-founders step down from the company.

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Facebook boss Mark Zuckerberg hailed the pair's "combined creative talents", adding: "I've learned a lot working with them for the past six years and have really enjoyed it". They did not disclose their reasons for leaving with the company.

Instagram and Facebook have operated independently and the two services barely mention each other.

Zuckerberg described the two as "extraordinary product leaders" and said he wished them all the best and was looking forward to seeing what they build next. But Facebook is also keen to increase engagement with the core social network, which has seen growth plateau and certain subsets of users become increasingly disenfranchised.

One sign that additional integration may be in Instagram's future: Zuckerberg in May sent longtime Facebook executive Adam Mosseri to run Instagram's product operation. The New York Times first reported the move.

Instagram this summer topped 1 billion monthly active users and has 25 million businesses that maintain accounts on the service.

Systrom and Krieger met through Stanford University and worked separately in Silicon Valley before forming Instagram in 2010.

Still, any risk from the "over-Facebookization" of Instagram would take time to play out, said Mr. Parker. It's fair to say that Instagram could have died as a little start-up in Facebook's long shadow, and it definitely benefited from the discipline, infrastructure and advertising sales machine that it accessed as a semi-autonomous region inside of mother Facebook.

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