SAN FRANCISCO — Kevin Systrom and Mike Krieger, co-founders of the photo-sharing app Instagram, have resigned and plan to leave the company in the coming weeks, according to people with direct knowledge of the matter. The exits add to the challenges facing Instagram’s parent company, Facebook.
Systrom, Instagram’s CEO, and Krieger, its chief technology officer, sold the business to Facebook in 2012 for $1 billion. They said they were “planning on taking some time off to explore our curiosity and creativity again,” CNN reported.
Bloomberg News reported that Systrom and Krieger are leaving because of tensions with Zuckerberg over the direction of Instagram. Spokespeople for Facebook and Instagram declined to comment further on why the executives had decided to step down, both CNN and The New York Times reported.
The two notified Instagram’s leadership team and Facebook on Monday of their decision to leave, said the people, who spoke on the condition of anonymity because they were not authorized to discuss the matter publicly.
Systrom and Krieger have known each other since 2010, when they met and transformed a software project built by Systrom into what eventually became Instagram, which now has more than 1 billion users.
A spokeswoman for Facebook did not immediately have a comment.
Kevin Systrom, left, and Mike Krieger, Instagram’s co-founders, in their headquarters in Menlo Park, Calif., March 24, 2017. Systrom and Krieger resigned on Sept. 24, 2018, and plan to leave the company in coming weeks, adding to the challenges facing Instagram’s parent company, Facebook. (Christie Hemm Klok/The New York Times)
The departures raise questions about Instagram’s future at a time when Facebook faces its most sustained set of crises in its 14-year history. For much of the past two years, critics have railed against Facebook for being careless with user data and for not preventing foreign interference across its network of more than 2 billion people. The issues have started taking a toll on Facebook’s business, with the company saying in July that growth in digital advertising sales and in the number of its users had slowed.
Against those problems, Instagram has been one of the jewels of Facebook. The social network acquired Instagram in 2012 for $1 billion, when the photo-sharing site was used by around 30 million people. Since then, Instagram’s reach has ballooned and it has widely been seen as one of Facebook’s most successful acquisitions.
Facebook has lost other founders of businesses it has acquired. In April, Jan Koum, a Facebook board member and a founder of WhatsApp, the messaging app that the social network purchased in 2014, said he was leaving. Koum had grown increasingly concerned about Facebook’s position on user data in recent years, people with knowledge of the situation said at the time.
Instagram was founded in 2010 and at first was a location check-in app called Burbn. Krieger, an enthusiastic user of Burbn, met Systrom at a Stanford University fellowship program and they decided to work together. Eventually, Burbn was retooled and renamed Instagram.
Instagram became popular in Silicon Valley almost immediately. The app heavily emphasized the use of a smartphone camera as iPhones were being widely adopted, turning everyday people into amateur photographers. Systrom and Krieger popularized photo filters and camera lenses, spurring a wave of copycat apps for the iPhone and Android-based smartphones.
The duo worked out of a small office in the South Park neighborhood of San Francisco. Instagram spent a lot of money in its early years just trying to keep its app online as its servers struggled under the constant stream of new user sign-ups.
Instagram eventually caught the eye of Mark Zuckerberg, Facebook’s chief executive, who realized how powerful Instagram’s nascent photo-sharing network would become, and saw the wealth of photo-sharing activity across his own social network. Zuckerberg handled the negotiations with Systrom and Krieger largely on his own.
Facebook purchased Instagram for $1 billion in cash and stock (though the final cost was closer to $715 million because the stock on which part of the deal was based declined in value). It was Facebook’s biggest acquisition to date, and came a month before the social network’s initial public offering.
“For years, we’ve focused on building the best experience for sharing photos with your friends and family,” Zuckerberg wrote in a blog post about the deal. “Now, we’ll be able to work even more closely with the Instagram team to also offer the best experiences for sharing beautiful mobile photos with people based on your interests.”
The deal immediately turned Systrom and Krieger into millionaires many times over. Instagram has since been valued at 100 times that $1 billion acquisition price by Bloomberg Intelligence, a sizable return on investment on paper.
Facebook went on to purchase Parse, a service that provided tools for mobile developers, and Oculus, a virtual reality hardware startup, branching into new areas beyond the original social network. Zuckerberg also spent $19 billion to buy WhatsApp.
But Instagram remained Zuckerberg’s main success story. As Facebook saw a threat in young people departing the network for Snapchat, a rival photo-sharing network, Instagram was quick to shift and re-create one of Snapchat’s key features of online stories. Since then, Instagram has surged further in popularity, while Snapchat’s growth has been inconsistent.
The departures of Systrom and Krieger create uncertainty around the app. It is unclear who will lead the company on the founders’ departures, and if that person can continue Instagram’s long-standing success streak. Marne Levine, who was previously Instagram’s chief operating officer, left her role at Instagram this month to return to Facebook and lead partnerships.
