Published: Wed, September 26, 2018
Finance | By Jaime Brady

What's next for Instagram as founders leave

What's next for Instagram as founders leave

While Instagram has continued its worldwide domination under Facebook ownership, the co-founders reportedly clashed with Facebook CEO Mark Zuckerberg and other leaders over the direction of the photo-sharing app.

Facebook's increasingly heavy-handed influence over its acquisition has frustrated Instagram's team, especially Krieger and Systrom.

Instagram has been a bright spot in Facebook's faltering growth, along with the sister purchase of WhatsApp, both of which until recently were run relatively independently leaning only on Facebook's technology. And while Facebook's Q2 earnings report showed Facebook's ad revenue growth was slowing, ad spend on Instagram grew four times that of Facebook year over year, according to a Q2 report from Merkle.

Analysts at eMarketer have estimated how much of Facebook's revenue comes from Instagram.

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.

John Lilly, a venture capitalist at Greylock, commented on the departure of the two Instagram co-founders stating, "what an impact they've had on all of us". People still loved it, to a degree that they haven't loved Facebook for years now, if they ever did. Jan Koum, founder of Facebook-owned WhatsApp, announced his intention to leave the company in April amid purported disagreements over the app's future and Facebook's data practices.

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Social media giant Facebook, Inc.

Socialbakers CEO Yuval Ben-Itzhak does not see the departure of Instagram's founders as anything more than an ongoing trend that happens across the tech industry. He's now head of product, and has a CV that some of Instagram's loyal users might find ominous - he was formerly in charge of Facebook's Newsfeed.

Instagram's simple design - just a collection of photos and videos of sunsets, faraway vacations, intimate breakfasts and baby close-ups - has allowed it to remain a favorite long after it became part of Facebook.

"We're now ready for our next chapter", Systrom said in a statement.

The optics are awful, first off. Facebook is trying to project confidence that it's moving past its two years of near constant crises involving foreign propaganda infecting the social network, of people and government officials using Facebook and its WhatsApp app to incite violence, and realisations stemming from this year's Cambridge Analytica scandal that Facebook may not be worthy of people's trust with their private time and digital lives. Facebook's main app has been marred by scandals around privacy, the Cambridge Analytica issue, and the spread of fake news. "We look for additional colour in coming days and weeks, but in the near term we expect FB shares to come under meaningful pressure from the departures".

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