Since Facebook (FB: NASDAQ) acquired Instagram in 2012 for $715 million, founders Kevin Systrom and Mike Krieger had stuck around keeping the brand and product independent of Facebook while relying on its resources and engineering talents to help it grow.
Systrom and Krieger say peace out to Mark Zuckerberg.
According to Bloomberg, the departure was prompted by the founders’ frustration over the direction of the photo-sharing app as Zuckerberg has become more involved with the day-to-day activities of the company.
You might be wondering, doesn’t this sound familiar?
WhatsApp’s founders Brian Acton and Jan Koum, departed in a similar manner after disagreements with Zuckerberg over the business model of the app and data privacy which FB seems to have a major problem with. Since their departure, Facebook had enforced some changes to the terms of service of WhatsApp, giving FB access to users’ phone numbers. Furthermore, it had advocated for unified profiles that allow for ad targeting and data mining. These changes may have led some Instagram employees to wonder that something similar will happen to their group and it seems their concern is now a reality!
With over 1 billion users monthly, Facebook has relied on Instagram as its main source of advertising revenue in addition to its own news feed.
Many may ask though, what does this mean for the future of Instagram?
For one, it could possibly be integrated into Facebook losing its independence and becoming another product division and two, it may lose its credibility as FB is continuously causing worry over its privacy scandals, fake news and election interference.
While Facebook has been around longer than Instagram with over 42.2 billion users, it is becoming more dependent on the younger and favourable ‘Gram’ which offers an attractive escape to a younger cohort of users who are wary of the political debates and privacy scandal.
Today, millennials are more vigilant about protecting their online footprints and as such is losing interest in FB while gravitating towards the great benefits of disappearing stories, encrypted data and more.
In the end, the departure of Systrom and Krieger gives Mark Zuckerberg the opportunity to take charge of Instagram directly. With this freedom, he must know how many changes to make without compromising the integrity and value of Instagram’s less tarnished brand.
If you want to start investing with SSL but don’t have the time to monitor the market or to conduct the trades yourself then you can choose one of SSL’s managed Financial Planning products. We offer a variety of products for every type of investor and if you are interested in managing online trades yourself and having complete control over your investment portfolio then you can try SSL’s Brokerage account.