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Growing Pains: Facebook Pushes Instagram to Earn Its Keep

By  |  Aug. 22, 2019 7:01 AM PDT
Photo: Illustration by Josh Brill

Inside a conference room at Facebook headquarters in January 2018, a discussion among senior executives—a group known within the company as the “M Team”—turned to Instagram, the photo-sharing app that Facebook acquired in 2012 for roughly $1 billion.

Facebook’s chief operating officer, Sheryl Sandberg, congratulated the leaders of Instagram, which she said had graduated from a side bet to become a meaningful part of Facebook’s overall business, according to three people familiar with the remark. For 2018, Instagram revenues were expected to surpass $10 billion after hitting $1 billion just two years earlier, said three people familiar with the estimates. Prior meetings of the M Team led to standing ovations for Instagram’s leadership over its rapid growth.

This time the tone shifted following Sandberg’s comments. A discussion broke out about whether the app, which had relied on its parent company’s vast resources to become one of the fastest growing apps in history, should return the favor by directing users back to Facebook. Some executives in the room saw Instagram’s success as a threat to Facebook itself. The meeting would foreshadow big changes to come for Instagram.

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