Instagram co-founders jointly resign, will leave in coming weeks

Dive Brief:

Instagram's co-founders Kevin Systrom and Mike Krieger have jointly resigned and will leave the company in the coming weeks. CEO Systrom confirmed the news in a company blog post published Monday night. The New York Times first reported their plans for departure. It's unclear who will step up to fill in for Systrom and CTO Krieger, according to the Times.
Systrom and Krieger formed Instagram, which is focused on its namesake photo-sharing app, in 2010, and initially had a staff of 13 people. Instagram was then purchased by Facebook for $1 billion in 2012. "We're planning on taking some time off to explore our curiosity and creativity again," Systrom wrote in his blog post. "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."
Facebook buying Instagram has turned out to be one of the social network's savviest moves. Instagram now has over 1 billion users, thousands of offices worldwide and is a massive driver of advertising revenue. In a statement to the Times, Facebook co-founder and CEO Mark Zuckerberg wished Systrom and Krieger "all the best" and said he's looking forward to see what they build next.

Dive Insight:

The reasoning behind Systrom and Krieger's departure will be highly speculated over in the coming weeks, and comes as another considerable blow to Facebook, which has been battered by a slew of executive change-ups and PR crises this year. The loss of two key leaders could also put the progress of some of Instagram's fledgling initiatives and momentum in mobile innovation on hold.

For one thing, Instagram is taking on a mounting number of projects that extend beyond its usual photo- and image-sharing capabilities. In June, it launched Instagram TV, or IGTV, a long-form video hub focused on publisher- and influencer-created content. Instagram has also pushed further into the mobile commerce field as it looks to link up its shopping and browsing experience and stay competitive with other apps like Snapchat. The Verge reported earlier this month that Instagram has plans to launch a standalone app for m-commerce, just as IGTV is an independent service focused on video content. Instagram last week additionally expanded two shopping features on its main app that help users more easily buy products that brands and social influencers promote.

But the bigger part of the equation in Systrom and Krieger's decision to leave might be parent company Facebook. As detailed by Recode, Facebook has historically had an impressive streak of retaining high-powered executive talent, promoting and shuffling leadership internally rather than sourcing from outside the company. That's changed this year, however, amid a flurry of data privacy controversies that have dinged the social network's reputation, namely the Cambridge Analytica scandal that first broke in March. The core Facebook platform's revenue and user growth are also starting to stagnate, a deceleration that has been compounded by these problems.

Facebook recently lost Elliot Schrage, who led the company's public policy and communications group, and Dan Rose, who headed its business development team. Disruptions have also hit Facebook's other owned properties. Jan Koum, the co-founder and former CEO of the messaging app WhatsApp, departed in April, following the departure of fellow co-founder Brian Acton last year. Facebook purchased WhatsApp for $22 billion in 2014.

While the split was claimed to be amicable by the parties involved at the time, The Wall Journal reported in June that company cultures frequently clashed between WhatsApp and Facebook and that leadership was divided over how to monetize the service and handle issues like users' data privacy. WhatsApp frequently resisted introducing advertising, which is Facebook's biggest driver of revenue, for example. The Journal reported that Acton and Koum forfeited $900 million and $400 million, respectively, in leaving when they did.