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Twitter charts new profitable course

David Court

Jack Dorsey is an interesting case. He’s the co-founder of not one but two $1 billion companies (Twitter and Square), and until thisweek, was chief executive of both. It’s an impressive CV.

But there’s an argument that he was doing neither role particularly well.

That is why the news that Dorsey is stepping down as chief executive of Twitter is neither surprising nor a bad thing.

The temptation is to believe that Twitter will be worse off without its influential co-founder as chief executive. But that’s not necessarily the case.

Apple, Microsoft and Google (to name a few) have all reached new heights with their new (non-founding) chief executives.

Twitter is well-positioned to do the same. It’s a company that has had a reputation that has always overplayed its metrics.

Although Twitter is regularly near the top of conversations about ‘‘Big Tech’’ and ‘‘the influence of social media’’, its cold metrics tell a different story about its place in the market.

Twitter is the 17th biggest social network in the world (Pinterest has more active users), and its financials are lightweight.

In the first quarter of this year, Twitter increased by 28 per cent year over year to just more than US$1b. For comparison’s sake, Facebook also increased its revenue – by 48 per cent – bringing in US$26.2b.

Some financial estimates even suggest Apple’s headphones division (AirPods) alone boasts revenue that is six times greater than Twitter’s.

You get the point. Twitter ain’t Big Tech. But it could be.

And that’s what some reports suggest led to Dorsey’s announcement thisweek: he jumped before he was pushed.

And investors Elliott Management Corp (which bought a 4 per cent stake in Twitter last year) and Silver Lake (which is sniffing around the All Blacks) were the ones doing the pushing, buying theirway on to the board and setting user, revenue and market-share growth goals that Dorsey didn’t come close to achieving.

Mix in the fact that Twitter’s stock price has nearly flatlined since its IPO in September 2013, it’s hard to argue against the need for a change of direction.

The incoming chief executive, former chief technology officer Parag Agrawal, represents a big shift for the social network’s leadership.

Agrawal is a 37-year-old immigrant from Indiawith a background in technology and 10-years of experience at Twitter. His immediate goals are to double Twitter’s annual revenue by 2023 and focus on the brand’s long-term goal, whatever thatmeans.

It appears Agrawal will bring a more surgical-style leadership to the social network, contrasting Dorsey’s visionary approach.

It’s amove that all parties will be happywith. Take the ego out of it and I think Dorsey wanted to jump, or be pushed, from Twitter.

Square is the more profitable of the two companies hewas chief executive of last week, and it’s also the less politically toxic.

The chief executive of Square doesn’t need to censor and then ban the President of the United States for publishing fake news, for example.

Being the boss of Square also gives Dorsey a platform to pursue themore out-there parts of his personality and perhaps the opportunity to co-found a third $1b tech brand.

Twitter, meanwhile, will rely on tech-based innovations to inject some profits and growth into the platform.

Technology

en-nz

2021-12-04T08:00:00.0000000Z

2021-12-04T08:00:00.0000000Z

https://fairfaxmedia.pressreader.com/article/282007560676730

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