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After years of stumbles and underperformance, Twitter co-founder Jack Dorsey is finally stepping aside as chief executive. The long-awaited move creates an opportunity for the social media platform to regain its footing, but there is much to be done.
On Monday, the company’s board announced that Twitter veteran Parag Agrawal, who has served as chief technology officer since 2017, will succeed Dorsey as CEO, effective immediately. Dorsey will remain on the board until his term expires next year.
Jack Dorsey has fallen short of transforming the business since he took over for his second stint as CEO in 2015.Credit:Bloomberg
Twitter shares initially surged on the news of Dorsey’s departure but turned lower as the market digested the news that an internal candidate was chosen. Investors are right to be concerned. Twitter’s deep problems will require leadership that is willing to act aggressively to right the ship, a tall order for an executive with deep ties to the previous regime.
It has been a difficult year for Twitter. During the company’s analyst day in February, Dorsey talked a big game, vowing to “double development velocity” of features and setting new long-term financial goals. But Wall Street has grown sceptical of the company’s ability to deliver on its ambitions after a series of disappointments.
US user growth has been weak. The social media app’s domestic, monetisable daily active users fell in the June quarter from the previous three months. Despite the benefit of the Summer Olympics in Tokyo, Twitter didn’t add US users in the three months that ended in September, either, compared with the June quarter.
Meanwhile, the early results for the company’s new initiatives have been underwhelming. Twitter shut down Fleets, its clone of Instagram Stories and Snapchat Stories, just months after launch amid lack of interest. Its highly anticipated Super Follows program, which enables users to charge a monthly fee for subscriber-only content, and its Twitter Blue paid subscription offering are off to slow starts.
Twitter’s deep problems will require leadership that is willing to act aggressively to right the ship, a tall order for an executive with deep ties to the previous regime.
And it doesn’t help matters when rivals are thriving. Google’s parent Alphabet for example, grew at a faster rate than Twitter in the latest reported quarter even though its revenue is more than 40 times larger.
It isn’t just financial performance. As easy as it is to question Mark Zuckerberg’s metaverse ambitions, the Facebook parent company is serving up the type of potentially transformational product vision Twitter has lacked.