Dorsey's Dilemma

Google's Ad Ban Leaves Twitter With a Crypto-Challenge

Jack Dorsey faces a split personality problem in Bitcoin.
Photographer: David Paul Morris/Bloomberg

Google's decision to ban advertising for cryptocurrencies and initial coin offerings puts Twitter Inc. CEO Jack Dorsey in an increasingly awkward spot.

The founder of the social network is under pressure to follow Facebook and the search giant and crack down on misleading ads for potentially loss-making products. Yet Dorsey might have reason to resist: he is also CEO of Square Inc., which recently began to offer Bitcoin trading and which is eyeing more crypto-investments. He should choose between the two jobs.

Twitter has become a magnet for the Bitcoin crowd, from cerebral developers to hucksters peddling ICOs and trade tips in full caps. The sheer volume of shameless and deceptive promotions has some users fed up. Last week, Cornell University's Emin Gun Sirer questioned when Dorsey would take action over "brazen" scams. "We are on it," Dorsey tweeted.

Runt of the Litter

Forecast 2018 market share in U.S. mobile ads

Source: eMarketer/AdWeek

It doesn't look that way. Facebook announced its ban on "misleading or deceptive" crypto ads two months ago. For Twitter, an official company policy would be a start, however clumsy or hard-to-implement it might be. A company spokesman recently promised measures to clamp down on crypto-related "manipulation," and has suspended some accounts -- but that's a pretty basic first step.

Bad Ads

Amount of ads taken down by Google for violating advertising policies

Source: Google

To be sure, neither Facebook and Google's bans are watertight (they can be circumvented by misspelling words, for instance). But they're a sign the companies are at least nominally putting consumers before ad dollars, which is something. The two companies account for about two-thirds of all digital ad spending in the U.S., and, while the crypto-ban is unlikely to hurt that dominance, it shows that Silicon Valley's gate-keepers are paying attention to public concern over how they police inappropriate content.

At Twitter, the big decisions will depend on Dorsey. The billionaire's Twitter hat will pressure him to pacify regulators and reduce crypto-hype, even if we don't exactly know how much is at stake in terms of revenue. But his Square hat might push him into riskier Bitcoin territory, because that's where the fintech money is. Even Dorsey's own tweets reflect a split personality, sometimes promoting Square's Bitcoin products, sometimes Twitter's commitment to civility.

Dorsey's Choice

Square and Twitter's shares have rallied over the past year, but the dual CEO job should still be re-thought

Source: Bloomberg

We know there are plenty of bigger and better reasons already for Twitter to have a full-time CEO. My Gadfly colleague Shira Ovide said back in 2016 that the platform's lack of traction with new users and its lagging ad sales pointed to the need for a dedicated leader. Both revenue and user growth has since been anemic.

Content matters to politicians and regulators and is a growing risk for investors. When challenged again, Twitter's next reply should be: "We're on it -- full-time."

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

    To contact the author of this story:
    Lionel Laurent in London at llaurent2@bloomberg.net

    To contact the editor responsible for this story:
    Edward Evans at eevans3@bloomberg.net

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