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Instagram founders leave Facebook over ‘tensions’

Bloomberg

Instagram founders Mike Krieger, left, and Kevin Systrom attend the 16th annual Webby Awards in New York City on May 21, 2012.

Photo: Reuters

The founders of Instagram are leaving Facebook Inc after growing tensions with Facebook chief executive officer Mark Zuckerberg over the direction of the photograph-sharing app, people familiar with the matter said.

Kevin Systrom and Mike Krieger, who have been at the company since Instagram’s acquisition by Facebook in 2012, were 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 more reliant on Instagram for Facebook’s 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 founders confirmed their decision in a blog post, although Facebook did not 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 US$715 million six years ago. Instagram, which has more than 1 billion users, is a key driver of revenue for Facebook.

Technology stocks have propelled the US stock market to record highs, with FAANG shares (Facebook, Apple, Amazon, Netflix and Google) soaring about 58 percent last year.

Apple Inc and Amazon.com Inc are two of the most heavily weighted stocks in the US market, but Facebook has turned into a drag on the group.

Shares of the social media giant in July posted the biggest one-day stock-market wipeout in US history 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, while all the other companies in the FAANG group are up this year.

“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.”

While Facebook has endured scandals on privacy, fake news and election interference, Instagram’s brand has remained mostly untarnished and has continued to rapidly grow users.

Facebook, which is running out of people in the world to add to its product, has become increasingly reliant on Instagram 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 said that Instagram grew twice as fast being part of Facebook as it could have on its own.

Many Instagram insiders felt that the statement was unnecessary and unprovable.

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