It looks like Twitter CEO Jack Dorsey will remain in the top job at the platform, at least for the time being.
Last week, investment management firm Elliott Management Corp. announced that it had purchased a significant stake in Twitter, and that it planned on using its newfound influence at the company to push for changes, including the replacement of Dorsey as CEO.
EMC’s main point of contention is that Twitter would be better served if it had a CEO solely focused on improving the company’s performance, which has fluctuated over the last few years. Dorsey, who is also the CEO of rising payments provider Square, may not be able to provide that focus, and with Dorsey also planning on moving to Africa for some months in 2020, various questions have been raised, and remain, in regards to his suitability for the role.
In an effort to quell concerns, Dorsey back-pedaled on his plans for an Africa move last week, while he also defended his record as Twitter CEO. At the same time, Twitter also worked to secure a new agreement with another investment firm, Silver Lake, in order to keep Dorsey safe, with the groups now working together to map a period of assessment, and a way forward for the management of the platform.
As reported by CNBC:
“The investment firms will each be awarded a seat on Twitter’s board. Silver Lake co-CEO and managing partner Egon Durban and Elliott partner Jesse Cohn will join the board as Twitter continues to search for a third new independent director with expertise in technology and artificial intelligence. Twitter hopes to find a candidate “that reflect the diversity of the Twitter service.”
So, Dorsey is safe for now, but the pressure is clearly on. Twitter’s incoming board members will be looking to maximize their returns, and while Dorsey will be given a chance to prove himself, he’ll need to produce quickly to win their trust.
Indeed, within the same statement, Twitter outlined its performance goals for 2020, including mDAU growth of 20% of more, and plans to “accelerate revenue growth on a year-over-year basis”.
Worth noting that Twitter’s mDAU count grew 21% YoY in 2019, while revenue was up 14% YoY for the full year, so those targets are not hugely aggressive. But it may be difficult for Twitter to maintain that momentum – newer engagement tools like disappearing ‘Fleets’ may help to get the app more attention, but 20% user growth could pose a significant challenge.
Of course, Twitter’s unique mDAU count is a little more opaque than overall usage numbers, but still, there’s not much room for variance. And if Twitter fails to reach those numbers, you can bet that Dorsey’s suitability for the role will again be in question.
Overall, it’s difficult to say whether Twitter would be better served by another CEO, one with more business acumen and/or direct experience in maximizing revenue. Twitter did once have a non-founder CEO in Dick Costolo (2010-2015), and it’s not like the platform thrived under alternate leadership. Indeed, many of the concerns highlighted under Costolo’s leadership related to lack of platform understanding, shifting Twitter away from its roots and more towards traditional, corporate, siloed process.
Dorsey, for better or worse, knows that Twitter is about. And while his management style has been questioned by many, it has, in more recent times, been slowly producing results.
But investment firms can smell potential, and Twitter is clearly not maximizing it, at least in their view. As such, the pressure will be on Dorsey, which could see a heap of changes coming thick and fast for the app in the coming 12 months.
Whether that’s a good or bad thing, we’ll have to wait and see.
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