Facebook shares slip after Instagram founders quit

Shares of Facebook fell after the founders of Instagram left the social networking giant under unexplained circumstances.

UNITED STATES (REUTERS) - Facebook shares dropped after Instagram's founders quit under unexplained circumstances.

Analysts said Kevin Systrom and Mike Krieger may have left because they could not agree with Facebook's chief executive Mark Zuckerberg, on how to run the company's fastest-growing revenue generator.

CFRA's equity research director Scott Kessler said: "This comes at a really pivotal time for Facebook. I think everyone is focused on Instagram, not just being the engine for growth for the company, but really being the crown jewel in what Facebook has from an asset perspective.

"And now those two founders are going to be leaving, you wonder if other people, including members of their management team are going to follow suit, and who is Facebook going to install? What approach are they going to take? Are they going to change the strategy in place? And how is that going to affect the growth trajectory and progress?"

Facebook bought Instagram in 2012 for US$1 billion (S$1.36 billion), when the app had 30 million active monthly users.

It kept the team small. Systrom had the freedom to add features, such as peer-to-peer messaging, video uploads, and advertising.

Now Instagram boasts over one billion active monthly users.

The sudden exit of Systrom and Krieger follows the departures of WhatsApp co-founders, Jan Koum and Brian Acton, and a reshuffling of Facebook's executive ranks earlier this year.