Jack Dorsey’s simultaneous leadership of $38bn social media company Twitter and $98bn fintech Square was always a stretch. Less than two years after adversarial activist investor Elliott Management called for Twitter to find a new boss, Dorsey is stepping down. It is the right move.
Running multiple tech businesses side by side is not unheard of — see Elon Musk’s roles at Tesla, The Boring Company and SpaceX. But Twitter needs more than a part-time chief executive. Dorsey’s interest in cryptocurrencies and blockchain suggest his mind may have focused more on Square, where he remains chief and in which he has a stake worth more than 10 per cent.
Twitter, once called Twttr, was launched in 2006 as a sort of group text messaging service. Over the years, friends became followers and the platform became better known as a way to broadcast thoughts to strangers.
Yet while Twitter has become sleeker, integrating photos and videos and expanding the character count, it has failed to keep pace with other social media innovations. TikTok’s rolling short videos and Instagram’s filters attract more users. The result is a share price that trades about 80 per cent higher than the 2013 listing price. Meta, by contrast, has risen 788 per cent since listing in 2012. Twitter’s US user growth has also flatlined.
Like Meta, Twitter has grappled with balancing content moderation and demands for free speech. Unlike its rival, Twitter has struggled to accelerate its advertising business. Note that Apple’s new policy of demanding apps ask permission before tracking user data did not damage Twitter’s advertising revenue. This change led Meta to miss revenue expectations in the last quarter. But Twitter’s data collection and advertising products are nowhere near as comprehensive as those of Meta.
Replacement chief Parag Agrawal, the company’s chief technology officer, will be under pressure to find new products that can boost user numbers while also setting aggressive financial targets. Without a smash hit new feature, the chances of scaling up Twitter’s business quickly look limited.
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