Instagram Co-Founders Resign In Latest Facebook Executive Exit
Rockville, MD (Reuters) – Instagram on Monday said co-founders Kevin Systrom and Mike Krieger have resigned as chief executive officer and chief technical officer of the photo-sharing app owned by Facebook Inc, giving scant explanation for the move.
The departures at Facebook’s fastest-growing revenue generator come just months after the exit of Jan Koum, co-founder of Facebook-owned messaging app WhatsApp, leaving the social network without the developers behind two of its biggest services.
They also come at a time when Facebook’s core platform is under fire for how it safeguards customer data, as it defends against political efforts to spread false information, and as younger users increasingly prefer alternative ways to stay in touch with family and friends. Concerns over Facebook’s business sparked the biggest one-day wipeout in U.S. stock market history in July.
Systrom wrote in a blog post on Monday that he and Krieger planned to take time off and explore “our curiosity and creativity again”.
Their announcement came after increasingly frequent clashes with Facebook Chief Executive Mark Zuckerberg over the direction of Instagram, Bloomberg reported.
In a statement, Zuckerberg described the two as “extraordinary product leaders”.
“I’ve learned a lot working with them for the past six years and have really enjoyed it. I wish them all the best and I’m looking forward to seeing what they build next,” Zuckerberg said.
Koum’s departure in May followed the exit of his WhatsApp co-founder Brian Acton.
That led to a reshuffling of Facebook’s executive ranks, increasing Zuckerberg’s ability to influence day-to-day operations. Zuckerberg ally Chris Cox, who leads product development for Facebook’s main app, gained oversight of WhatsApp and Instagram, which had been given independence when Facebook bought them.
Adam Mosseri, who had overseen Facebook’s news feed and spent a decade working closely with Zuckerberg, became Instagram’s head of product.
Instagram and Facebook have operated independently and the two services barely mention each other. But as regulators have pushed Facebook to improve information safeguards for individual privacy, to combat addiction to social media, and to stop misinformation or fake news, Zuckerberg and other leaders have been under more pressure to monitor units beyond the core social network.
ACQUISITION DONE RIGHT
Systrom and Krieger notified the photo-sharing app’s leadership team and Facebook on Monday about their decision to leave, Instagram said. Their departure would be soon, it said. The New York Times first reported the move.
Systrom and Krieger met through Stanford University and worked separately in Silicon Valley before forming Instagram in 2010.
Facebook bought Instagram in 2012 for $1 billion. The photo-sharing app has over 1 billion active monthly users and has grown by adding features such as messaging and short videos. In 2016, it added the ability to post slideshows that disappear in 24 hours, mimicking the “stories” feature of Snap Inc’s Snapchat.
The photo app’s global revenue this year is likely to exceed $8 billion, showed data from advertising consultancy EMarketer.
Increased advertising on Instagram has seen the average price-per-ad across Facebook’s apps decline this year after a year of upswing. A new privacy law in Europe also has affected prices.
Instagram had been hailed in Silicon Valley as a flashy acquisition done right, with the team kept relatively small and Systrom having the freedom to add features such as peer-to-peer messaging, video uploads and advertising.
“I see Mark [Zuckerberg] practice a tremendous amount of restraint in giving us the freedom to run, but the reason why I think he gives us the freedom to run is because when we run, it typically works,” Systrom told Recode last June.
The app’s latest product, IGTV, has been slow to gain traction. Offered through Instagram and as a standalone app, IGTV serves up longer-length video content, mostly from popular Instagram users.
Video content has been a major emphasis for Facebook as it seeks to satisfy advertisers’ desire to stream more commercials online.
Why Instagram’s Founders Are Resigning: Independence From Facebook Weakened
Reuters John Constine September 25, 2018
Facebook promised Instagram autonomy, but reduced it over time leading to today’s bombshell revelation. Eight years after launching Instagram and six years after selling it to Facebook, Instagram co-founders CEO Kevin Systrom and CTO Mike Krieger are leaving the company, according to The New York Times. The founders apparently did not give a reason for their departure when they informed the company today that they’re resigning and that they’ll depart in the next few weeks.
But according to TechCrunch’s sources, tension had mounted this year between Instagram and Facebook’s leadership regarding Instagram’s autonomy. Facebook had agreed to let it run independently as part of the acquisition deal. But in May, Instagram’s beloved VP of Product Kevin Weil moved to Facebook’s new blockchain team and was replaced by former VP of Facebook News Feed Adam Mosseri — a member of Zuckerberg’s inner circle.
Adam is a very strong-willed individual” said a source, and “Chris [Cox, Facebook’s Chief Product Officer] and Kevin never really got along.” Between the two, they could pressure Instagram to do more for Facebook — which was important given the impact of scandals and dwindling teen usage on Facebook’s brand. “When Chris started taking initiative and with Adam as more of the old-school in-crowd of Facebook, it was clear that it wasn’t going to be pleasant. I saw that this guy [Systrom] is gonna get squeezed.” However, another source said Mosseri was well-received and productive since moving to Instagram in the middle of the year, and Cox has been cooperative with Systrom. Both are said to remain popular inside the company.
Systrom and Facebook CEO Mark Zuckerberg historically got along, but they had occasional diverging opinions. A source said that a few times a year they’d clash before resolving things. Those clashes included “Sharing back to Facebook. Kevin wanted to keep the sharing on Instagram but at some point Mark wanted content production on Instagram to flow to Facebook. But things got more heated lately. “Recently Mark decided to pull all of the links to Instagram from Facebook.”
The evidence of that standoff can be seen in Facebook, which last year confirmed it was adding a shortcut to Instagram to its bookmarks menu. That shortcut has since disappeared. This year, some Instagram users started getting both Facebook alerts inside their Instagram notifications tab, and seeing a Facebook button with red notification counts inside Instagram’s settings menu.
The stress imposed by Facebook also manifested in other departures. Earlier this year, Instagram’s director of public policy Nicole Jackson Colaco quietly departed the company, according to a source She’d served in the role since 2013 and as a Facebook privacy manager since 2009. Despite still listing herself as employed at Instagam on LinkedIn, Colaco subtly confirmed her departure by commenting on Krieger’s departure post that “IG was the best place I’ve ever worked”.
And two weeks ago, Instagram’s COO Marne Levine who was known as a strong unifying force, went back to lead partnerships at Facebook. Without an immediate replacement named, Instagram started to look more like just a product division within Facebook. And without Levine, it’s unclear who’d be fit to lead Instagram other than Zuckerberg loyalist Mosseri.
Our source says that “Mosseri was very disappointed that he didn’t get the ‘head of Facebook’ gig which went to Will Cathcart. VP Of Product at Instagram was kind of a consolation prize.” But they say his assignment to Instagram VP was Zuckerberg doing “succession planning for Kevin and Mike. Mark is a brilliant strategist and of course he’s going to want to install someone. Despite rumors about a potential departure, Instagram staffers were surprised and saddened to hear Systrom would leave. “Kevin left some big shoes to fill” a source says. “There’s some internal skepticism about whether Adam can fill the role.”
After growing the app to 1 billion users, conquering its archrival Snapchat, turning it into a massive advertising business, Instagram’s founders may feel that they’ve done their duty and are ready to tackle different challenges. And rather than fight through Facebook’s impositions, they’d rather go build something new.
In a statement (and Instagram post), Systrom and Krieger wrote that “We’re planning on taking some time off to explore our curiosity and creativity again. 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.” Zuckerberg gave his own statement to TechCrunch, stating “Kevin and Mike are extraordinary product leaders and Instagram reflects their combined creative talents. I’ve learned a lot working with them for the past six years and have really enjoyed it. I wish them all the best and I’m looking forward to seeing what they build next.”
Krieger and Systrom’s Rise
The pair, former Stanford classmates, originally built a social location app Burbn but discovered its photo filters were by far the most popular part of the app. By combining tools to make grainy photos from early smartphone look good with a social feed for sharing them, Instagram became perhaps the world’s most succesful mobile app. Deemed such a threat, Facebook spent $715 million to acquire the startup and its less-than 50 million monthly users.
Supercharged by Facebook’s engineering team, Krieger could finally rest a little after spending years fighting server fires in attempts to manage Instagram’s meteoric growth. Sales, internationalization, anti-spam, and other resources from Facebook let Instagram fuel its growth and sprout an advertising business.
The moment of truth for Instagram came in late 2016 with the launch of Stories, a clone of Snapchat’s trendy ephemeral sharing feature. At the time, Systrom admitted “they deserve all the credit”. But by jamming Stories atop the already-thriving Instagram feed, sorting them to show your best friends first unlike Snapchat, and focusing on performance in developing countries Snap neglected, the copycat soon surpassed the original. Instagram Stories now has 400 million daily users compared to 188 million on Snapchat’s whole app.
During those six years, Instagram also had its share of troubles. Cyberbully became rampant, leading the company to eventually invest heavily in artificial intelligence and human moderators to keep the app clean. Russian military operatives spread misinformation and propaganda on Instagram that reached 20 million Americans, implicating the company in an election interference scandal that will continue through the upcoming mid-term elections.
Facebook had largely allowed Instagram to run independently. Systrom and Zuckerberg worked closely, yet Instagram wasn’t forced to drown its users in cross-promotion for other Facebook products or make worrying privacy decisions. As Mosseri moved in and Facebook wanted Instagram to pull its weight, its autonomy was endangered, leading to disagreements between the two factions’ leaders.
The departure follows fellow Facebook acquisition WhatsApp’s founders leaving under much more grim circumstances. Brian Acton cited Facebook privacy concerns amongst reasons for his departure, tweeting “Delete Facebook” amidst one of its recent scandals.
Facebook has gradually moved to exert more control over all of its acquistions. Chris Daniels, head of Internet.org, was moved to oversee WhatsApp. And Oculus was moved under the purview of Facebook’s head of hardware Andrew “Boz” Bosworth, another long-time confidant and Harvard classmate of Zuckerberg. Together, the moves seemed to endanger the independence of the conglomerate’s biggest acquisitions by appointing Facebook loyalists at the top. Without Systrom and Krieger, Instagram could see its autonomy dwindle. That might in turn endanger its ability to recruity retain talent.
Perhaps the strongest legacy of Systrom and Krieger will be how Instagram changed global culture. It made non-artists feel creative, and let people give friends a window into their world, engendering empathy and friendship.
At the same time, a desperate lust for Likes led many people to manicure their online image while hiding their sorrows and vulnerabilities. Instagram became the premier venue for success theater, where people engender health-harming envy in others by showing off just their most glamorous moments. And when Instagram launched Stories to try to get users to share more than just their life highlights, it ended up normalizing the behavior of interrupting every special moment with their smartphone camera.
Systrom took a stand on the digital well-being issue, saying “We’re building tools that will help the IG community know more about the time they spend on Instagram – any time should be positive and intentional . . . Understanding how time online impacts people is important, and it’s the responsibility of all companies to be honest about this. We want to be part of the solution. I take that responsibility seriously.”
Perhaps Systrom and Krieger’s next project will seek to offset some of the distortions to society caused by their creation. Or they could take another shot and bringing people together through the lens of art and self-expression. Instagram rose to dominance in part because they stuck around to keep its culture and product distinct from the company that bought it. Like their app encourages, Systrom and Krieger saw the potential for art where no one else did.
Whatsapp Ceo Jan Koum Quits FACEBOOK Due to Privacy Intrusions
“It is time for me to move on . . . I’m taking some time off to do things I enjoy outside of technology, such as collecting rare air-cooled Porsches, working on my cars and playing ultimate frisbee,” WhatsApp co-founder, CEO and Facebook board member Jan Koum wrote today. The announcement followed shortly after The Washington Post reported that Koum would leave due to disagreements with Facebook management about WhatsApp user data privacy and weakened encryption. Koum obscured that motive in his note that says, “I’ll still be cheering WhatsApp on – just from the outside.”
Facebook CEO Mark Zuckerberg quickly commented on Koum’s Facebook post about his departure, writing “Jan: I will miss working so closely with you. I’m grateful for everything you’ve done to help connect the world, and for everything you’ve taught me, including about encryption and its ability to take power from centralized systems and put it back in people’s hands. Those values will always be at the heart of WhatsApp.” That comment further tries to downplay the idea that Facebook pushed Koum away by trying to erode encryption.
The move comes 3.5 years after WhatsApp’s acquisition, meaning Koum may have vested much of his stock and have fewer financial incentives to stay. It’s currently unclear what will happen to Koum’s Facebook board seat that WashPo says he’ll vacate, or who will replace him as WhatsApp’s CEO.
One possible candidate for the CEO role would be WhatsApp business executive Neeraj Arora, a former Google corporate development manager who’s been with WhatsApp since 2011 — well before the Facebook acquisition. A source described him as the #4 at WhatsApp.
Koum sold WhatsApp to Facebook in 2014 for a jaw-dropping $19 billion. But since then it’s more than tripled its user count to 1.5 billion, making the price to turn messaging into a one-horse race seem like a steal. But at the time, Koum and co-founder Brian Acton were assured that WhatsApp wouldn’t have to run ads or merge its data with Facebook’s. So were regulators in Europe, where WhatsApp is most popular.
A year and a half later, though, Facebook pressured WhatsApp to change its terms of service and give users’ phone numbers to its parent company. That let Facebook target those users with more precise advertising, such as by letting businesses upload lists of phone numbers to hit those people with promotions. Facebook was eventually fined $122 million by the European Union in 2017 — a paltry sum for a company earning more than $4 billion in profit per quarter.
But the perceived invasion of WhatsApp user privacy drove a wedge between Koum and the parent company well before the Cambridge Analytica scandal broke. A source confirms that Koum had been considering leaving for a year. Acton left Facebook in November, and has publicly supported the #DeleteFacebook movement since.
WashPo writes that Koum was also angered by Facebook executives pushing for a weakening of WhatsApp’s end-to-end encryption in order to facilitate its new WhatsApp For Business program. It’s possible that letting multiple team members from a business all interact with its WhatsApp account could be incompatible with strong encryption. Facebook plans to finally make money off WhatsApp by offering bonus services to big companies like airlines, e-commerce sites and banks that want to conduct commerce over the chat app.
Koum was heavily critical of advertising in apps, once telling Forbes that “Dealing with ads is depressing . . . You don’t make anyone’s life better by making advertisements work better.” He vowed to keep them out of WhatsApp. But over the past year, Facebook has rolled out display ads in the Messenger inbox. Without Koum around, Facebook might push to expand those obtrusive ads to WhatsApp as well.
The high-profile departure comes at a vulnerable time for Facebook, with its big F8 developer conference starting tomorrow despite Facebook simultaneously shutting down parts of its dev platform as penance for the Cambridge Analytica scandal. Meanwhile, Google is trying to fix its fragmented messaging strategy, ditching apps like Allo to focus on a mobile carrier-backed alternative to SMS it’s building into Android Messages.
While the News Feed made Facebook rich, it also made it the villain. Messaging has become its strongest suit thanks to the dual dominance of Messenger and WhatsApp. Considering many users surely don’t even realize WhatsApp is owned by Facebook, Koum’s departure over policy concerns isn’t likely to change that. But it’s one more point in what’s becoming a thick line connecting Facebook’s business ambitions to its cavalier approach to privacy.
You can read Koum’s full post below.