Instagram Says CEO Systrom, CTO Krieger Resign

Devin Lawrence
September 26, 2018

Market-research firm eMarketer estimates Instagram's world-wide ad revenue will grow 110% this year to nearly $9 billion.

Krieger and Systrom together founded Instagram in 2010, and it was acquired by Facebook for $1 billion in 2012. But now that its founders have announced they are leaving in a swirl of well wishes and vague explanations, some of the same worries are bubbling up again - and then some.

Kevin Systrom and Mike Krieger were responsible for that culture - the entire feel of an app that was in many respects the anti-Facebook.

Instagram Stories have been a hit on the platform.

Yet Zuckerberg's Facebook has to make sure it doesn't become akin to a swarm of locusts, moving from platform to platform and turning each one to a husk.

Instagram had about 30 million users in 2012, the year it was purchased by Facebook for what appeared to be an eye-watering $1bn. But that could quickly change.

Facebook has a history of clashing with the leaders of companies it acquires.

Instagram has been a primary focus of those efforts. What was a venture employing 13 people grew to over a thousand, but this is the sudden and surprising end for the duo that started it all and we've been left wondering why. Crucially, Instagram is popular with teens and young people, a demographic Facebook has had trouble keeping.

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Facebook shares were down 1% to $163.66 on Tuesday morning, and have slumped 7.5% for the year so far. And it was the first startup allowed to operate mostly independently.

The social network spent $19bn on the chat app in 2014, and Instagram's co-founder is said to have become concerned that he had sold out too soon.

Recently, Instagram has been on a roll.

In the case of Krieger and Systrom, it was an issue of independence and control, Bloomberg reported. Only a month earlier, Instagram had moved into sparkly new offices in San Francisco.

Facebook executives also touted Instagram's growth potential during the company's most recent earnings call. And especially when its parent has long stopped being cool, what with everyone and their grandma now on it. Chris Cox, a Zuckerberg ally, gained oversight of WhatsApp and Instagram alongside the main Facebook app. Adam Mosseri, a 10-year Zuckerberg veteran and former head of Facebook's news feed, was inserted as head of product for Instagram.

Instagram had previously been seen as largely autonomous from Facebook's influence.

"I don't think Zuckerberg is dumb", Akhtar said. Mr Systrom said the pair both remained "excited for the future of Instagram and Facebook". Concerns over Facebook's business sparked the biggest one-day wipeout in USA stock market history in July. "It's still going to be successful", said Williamson.

Internally, the challenge is a bit more complicated.

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