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.
Photo: Reuters
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.
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
ARTIFICIAL INTELLIGENCE: The chipmaker last month raised its capital spending by 28 percent for this year to NT$32 billion from a previous estimate of NT$25 billion Contract chipmaker Powerchip Semiconductor Manufacturing Corp (力積電子) yesterday launched a new 12-inch fab, tapping into advanced chip-on-wafer-on-substrate (CoWoS) packaging technology to support rising demand for artificial intelligence (AI) devices. Powerchip is to offer interposers, one of three parts in CoWoS packaging technology, with shipments scheduled for the second half of this year, Powerchip chairman Frank Huang (黃崇仁) told reporters on the sidelines of a fab inauguration ceremony in the Tongluo Science Park (銅鑼科學園區) in Miaoli County yesterday. “We are working with customers to supply CoWoS-related business, utilizing part of this new fab’s capacity,” Huang said, adding that Powerchip intended to bridge
Microsoft Corp yesterday said that it would create Thailand’s first data center region to boost cloud and artificial intelligence (AI) infrastructure, promising AI training to more than 100,000 people to develop tech. Bangkok is a key economic player in Southeast Asia, but it has lagged behind Indonesia and Singapore when it comes to the tech industry. Thailand has an “incredible opportunity to build a digital-first, AI-powered future,” Microsoft chairman and chief executive officer Satya Nadella said at an event in Bangkok. Data center regions are physical locations that store computing infrastructure, allowing secure and reliable access to cloud platforms. The global embrace of AI
Qualcomm Inc, the world’s biggest seller of smartphone processors, gave an upbeat forecast for sales and profit in the current period, suggesting demand for handsets is increasing after a two-year slump. Revenue in the three months ended in June will be US$8.8 billion to US$9.6 billion, the company said in a statement Wednesday. Excluding certain items, earnings will be US$2.15 to US$2.35 a share. Analysts had projected sales of US$9.08 billion and earnings of US$2.16 a share. The outlook signals that the smartphone market has begun to bounce back, tracking with Qualcomm’s forecast that demand would gradually recover this year. The San