Does Twitter, Inc. Really Need Another CEO?
And so, it’s official! Jack Dorsey is the new permanent CEO of Twitter, Inc. (NYSE:TWTR). The stock soared earlier this week. But when the rumors initially started making rounds last week on Thursday that Twitter’s interim CEO will likely be appointed the next boss, the market certainly did not take the news well as the TWTR stock plunged almost 7.5% on the same day.
Twitter co-founder Jack Dorsey has remained in the interim position since July, when the last CEO, Dick Costolo, stepped down. Ever since, Twitter has been looking for a replacement, but, having failed to do so, now seems willing to settle with Dorsey. Had Dorsey been Twitter’s first choice, the CEO-saga would have long ended. Could it be that those in the C-suite have been reluctant to make him permanent? Likely.
Because Dorsey has been fired from the same position during Twitter’s startup years. In his book Hatching Twitter, New York Times reporter Nick Bilton has described Dorsey has a haughty co-founder who liked to take sole credit for Twitter’s success. His hubris put him at odds with the rest of the three founders.
If we assume things are now different with Dorsey, one big concern still remains at hand—his dual CEO-ship. Jack Dorsey has made it clear time and again that he will not leave Square, implicitly indicating that were he to pick between Twitter and Square, the latter would be his first choice. This puts his priorities into perspective. Now, it is not peculiar for one boss to hold reins of two companies. Steve Jobs simultaneously reigned over Apple and Pixar in the past. Today, Elon Musk rules over not two but three companies as CEO of Tesla and SpaceX, and Chairman of SolarCity. But let’s face it; Dorsey is neither Jobs nor Musk.
The Biggest Challenge Facing Twitter Stock
Less than a year and a half ago, the microblogging social media stock was touching new highs in the $60.00-$70.00 range. Beginning last year, the stock started a southward journey that has continued to this day. Investors have been particularly upset with Twitter’s sluggishness in adding new features to the web site, which is stalling its user growth. Now, Dorsey has already got his hands full with Square’s impending IPO later this year, instilling fear that Twitter will again get shifted to the backburner, something that TWTR stockholders are not willing to accept.
Chart courtesy of www.StockCharts.com
The technology and social media world is transforming at a rapid pace. Companies which have been slow in adapting to changing environments have long gone extinct. Remember BlackBerry Limited (NASDAQ:BBRY)? When Apple Inc. (NASDAQ:AAPL) was growing into a tech giant, BlackBerry CEOs were making outrageous predictions like “camera phones would be rejected by corporate users.” The BlackBerry chiefs went as far as calling full QWERTY keypads “the most exciting trend” when the world had already moved on to touchpads. I’ve discussed in my earlier post on Twitter why the company is dangerously treading down the same path as social media games company Zynga, Inc. (NASDAQ:ZNGA).
Twitter can learn a thing or two from its biggest rival, Facebook Inc. (NASDAQ: FB), which has been swift in adapting to changing user preferences—rapidly introducing new features to its platform, ingeniously monetizing these features, cleverly adding profitable social media acquisitions (like Instagram and WhatsApp) to its portfolio, and achieving a stellar MAU growth in the process. When Twitter’s hashtag phenomenon took over the world, Facebook moved fast to integrate hashtags in its search feature. Realizing early that Twitter was starting to dominate the mobile news space, Facebook introduced the Instant Articles feature for mobile users to open news pieces within the app, thus recapturing the news-hungry audience.
In a nutshell, if Twitter wants to get back in the game, it must find a different strategy. One way to achieve this could be to have two chiefs. Great companies like Chipotle Mexican Grill and Oracle have more than one CEO, bringing greater expertise and a wider scope to the companies. Debatable, but sometimes having two heads is better than one.