Instagram Founders Ditch Facebook

Sep 25, 2018
Originally published on September 25, 2018 5:40 pm
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I'm Audie Cornish with All Tech Considered.


CORNISH: First some news - the two founders of the photo sharing app Instagram are stepping down. Instagram is owned by Facebook, and it's become a rare bright spot at a time of trouble for the social media giant. NPR's Jasmine Garsd has more.

JASMINE GARSD, BYLINE: In an interview with Bloomberg, Instagram CEO Kevin Systrom reminisced about the moment they launched in 2010.


KEVIN SYSTROM: I had worked at other companies that struggled to get a hundred people to sign up in a day, and that first morning or actually that first day, we had 25,000 people sign up. And I remember, like, my eyes were wide. I was like, I have never seen a service grow that quickly day one.

GARSD: Facebook's purchase of Instagram in 2012 was kind of the Louisiana Purchase of tech. They bought it for $715 million when Instagram only had 13 employees. Since then, Instagram has grown as fast as one of the teenagers who prefer it. Debra Aho Williamson is a principal analyst at research firm eMarketer.

DEBRA AHO WILLIAMSON: It's super popular particularly with young people, teenagers and young adults. And those are areas where Facebook has actually been losing users.

GARSD: Your parents are more likely to not be on it. With its array of filters, it offers a carefully calculated cool to a generation obsessed with seeing and being seen. Advertisers have taken note.

WILLIAMSON: We at eMarketer are forecasting that this year, Instagram will represent 27 percent of Facebook's U.S. ad revenues. But in two years, we're expecting Instagram's ad revenues to double.

GARSD: Meanwhile, Facebook's growth has declined this year maybe because of all the scandals that have plagued it, from election interference to how it deals with hate speech. And Facebook has been paying increasing attention to Instagram as a source of profit. And there are reports that Instagram's founders didn't like all the attention.

WILLIAMSON: The idea that Facebook has started putting a couple of its own executives in charge over at Instagram has probably been a sign that Facebook does want to have more control over what happens there.

GARSD: Williamson says Instagram founders Kevin Systrom and Mike Krieger walking away - it isn't the best look for a company who is trying to maintain investor confidence. But she also says Facebook's sky isn't falling. It's still an extremely profitable company, and she suspects it will be smart enough to keep what made Instagram so popular.

WILLIAMSON: It's a place where people go for aspirational reasons. They follow celebrities, and they follow influencers. And that's very different from Facebook. So I don't necessarily think that Facebook is going to come in and say, OK, we're going to change everything and make this just like Facebook.

GARSD: And for Instagram's billion-plus users, that deserves a big like. Jasmine Garsd, NPR News, New York. Transcript provided by NPR, Copyright NPR.