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25 September 2018updated 13 Sep 2021 4:10pm

The departure of Instagram’s founders reminds us who the real social media boss is

If Facebook is an empire, Mark Zuckerberg is the undisputed ruler. 

By Mic Wright

When Facebook acquired Instagram in 2012, at a headline cost of $1bn (which later dropped to $715m after a decline in share values), it was with promises of autonomy. The photo-sharing social network would be Hong Kong to the blue behemoth’s China, under its umbrella but able to live according to its own laws and customs. For a long time, that appeared to be the case, with Instagram seeming only tangentially linked to its larger step-sibling. That apparent disconnection – as cosmetic as it may have been – was a key part of why many who ditched Facebook remained wedded to sharing photos on Instagram. The latter just felt nicer.

But yesterday’s announcement that Instagram’s co-founders, Kevin Systrom and Mike Krieger, are leaving the company should worry anyone who sees the platform as a cuddly, photo-focused backwater, safely away from Facebook’s roiling blue ocean of data. The pair’s stated reasons for their departure – “to explore our curiosity and creativity again” – sound upbeat and perky, but I suspect that’s more filtered than even the most smoothed-out selfie. Reports over the years have suggested that Systrom, who served as Instagram’s CEO, often clashed with Facebook founder Mark Zuckerberg about the future direction of Instagram. New leadership, chosen by Zuckerberg, is likely to argue less about the need for changes.

In Zuckerberg’s family of products – which also includes Facebook, WhatsApp, Facebook Messenger and virtual reality firm Oculus – Instagram is arguably the most uncomplicated success. When it was acquired, it had only been in existence for two years, had 33 million active users and just 13 employees. Six years later, it’s valued at $100bn by Bloomberg Intelligence, serves a billion active monthly users, and has largely avoided the privacy and security scandals that have dogged Facebook itself. But while Instagram has been Facebook’s fastest-growing source of revenue, it has four million fewer monthly global advertisers. With the average price of ads across Facebook’s entire network of apps down and the new data sharing rules brought in under GDPR affecting ad revenues from Europe, you can expect to see Facebook squeeze Instagram harder.

Zuckerberg already knows that Instagram is powerful tool to beat potential rivals. When Snapchat’s ephemeral photo-sharing, augmented reality filters, and stickers were growing in popularity, the launch of Instagram Stories, which has virtually identical features, was quickly able to eclipse it. While Snapchat has just under 200 million active monthly users, the Instagram Stories feature alone is used by 400 million people a month, leaving another 600 million monthly active users of the app to be lured into it. That huge potential for user growth and increased advertising revenue is why it’s hard to imagine Zuckerberg not wanting to tinker with Instagram more. The question is whether those changes will be the ones that its dedicated users will want to see.

In Becoming Facebook (2017), an analysis of the company’s rise and rise, former Facebook director of global business marketing, Mike Hoefflinger put forward a theory of why the Instagram acquisition was so successful, going beyond the simple financials: “the priceless value of the Instagram story [is the proof] that Zuckerberg can turn visions of growth and impact into reality without undue meddling. A clear message to the best builders in the world that if you want to play truly big, come work with Facebook.” That may have been true for a while, but the events of this year suggest that may no longer be true.

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Jan Koum and Brian Acton, the founders of WhatsApp, which was acquired by Facebook in 2012 for $21.94bn, left acrimoniously earlier this year, amid stories of clashes over privacy concerns and Facebook’s growing desire to see a return from its huge investment. Like Instagram, WhatsApp had joined the Facebook empire with promises of autonomy. Acton began his time at the company talking about building significant revenue without relying on advertising. He ended it tweeting, at the height of the Cambridge Analytica scandal, that he was planning to “#deletefacebook.

While Systrom and Krieger’s departure has, so far, been far friendlier, it speaks to the same problem: If Facebook is an empire, Mark Zuckerberg is the undisputed ruler and advertising revenue is the coin of the realm. Offers of autonomy and independence come with a time limit; for Instagram’s founders that time was obviously up and for Instagram’s users, it’s time to get ready for more advertising and more reminders that Facebook is running the show, despite the distinct lack of blue in the surroundings.

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