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Instagram co-founders call it quits

28 September 2018

The social media company has been engulfed in a privacy breach scandal over the last few months.

Instagram CEO Kevin Systrom and co-founder Mike Krieger sold the company to Facebook in 2012 for $1 billion.

He said he never became close to the Facebook chief, despite leading the company's most expensive acquisition.

Systrom and Krieger didn't give any reasons as to why they are stepping down but they said that they want to take some time off from their management duties for the foreseeable future. Multiple sources told Recode that Systrom and Krieger were frustrated with how Facebook had been dealing with Instagram lately, after an initially smooth and co-beneficial relationship for the first six years.

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In a bombshell interview with Forbes, the WhatsApp cofounder discussed his departure previous year after disagreeing with Mark Zuckerberg's vision for aggressively making money off of the messaging app.

But those healthy debates evolved in recent months into uncomfortable tensions as Facebook's revenue growth started to slow.

With more than 2.2 billion users, Facebook is running out of people in the world to sign up for its social network, and can only push so many advertisements into its news feed. Recently, it emerged that a private company called Cambridge Analytica had inappropriately accessed and used data on the platform.

Specifically, they wrangled over whether Facebook's insistence on introducing ads into WhatsApp meant that Acton could exit and take his full allocation of stock. The research firm noted that Instagram makes up 28.2 percent of Facebook's mobile ad revenue.

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On this, as well as other potential moves, the social media giant would do well to tread carefully, making sure that revenues are enhanced without sacrificing the core appeal of Instagram or antagonizing users with too many commercial elements.

He joined Facebook in 2008, only four years after the company was founded, as a product designer and worked his way up the ranks over the subsequent decade.

Many analysts feel that the departure of the Instagram co-founders could be tied to these tempestuous times that Facebook has had to endure.

Instagram in June announced it passed a billion active users, and unveiled a new long-form video feature in a bid to attract "creators" like those on YouTube. "He knows that a large part of Instagram's popularity is that it's separate from Facebook".

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Facebook's lawyers didn't believe that discussing monetization and ads broke their agreement with the WhatsApp founders. Meanwhile, investors in peer Snap Inc. are taking advantage of Facebook's woes, sending shares up as much as 5.3 percent. Mr Zuckerberg has become more invested in pursuing his vision for Instagram now that products such as Instagram Stories, the ephemeral sharing tool and Snapchat rival that grew popular on the app, are turning out to be important sales drivers. Since then the company has grown strength after strength.

Instagram co-founders call it quits