Peter Thiel Says Twitter ‘Horribly Mismanaged’

Twitter Inc. is mismanaged, underperforming and there’s “probably a lot of pot-smoking going on there,” according to Peter Thiel, an early investor in Facebook Inc.

Replacing Chief Executive Officer Dick Costolo won’t change the culture, Thiel, a co-founder of PayPal Inc. and Palantir Technologies Inc., said on CNBC yesterday. Still, Twitter has potential and may succeed even though it’s dysfunctional, Thiel said.

“You’d have to fire everybody and start over,” Thiel said. “It feels like it’s vastly underperforming its potential. It’s a horribly mismanaged company -- probably a lot of pot-smoking going on there.”

Management at Twitter, which lets people share 140-character updates, has undergone several changes and the company has struggled to update its products amid internal bickering. Co-founders Evan Williams, Biz Stone and Jack Dorsey, who is Twitter’s chairman, are all running new startups. Costolo this year replaced the chief financial officer and heads of consumer product and engineering, and ousted Chief Operating Officer Ali Rowghani.

Jim Prosser, a spokesman for San Francisco-based Twitter, declined to comment on Thiel’s remarks. Bijan Sabet, an early investor in Twitter at Spark Capital, called Thiel’s comments “nasty, silly and wrong.

Costolo, a former stand-up comedian, responded to Thiel’s reference to marijuana with a joke.

“Working my way through a giant bag of Doritos,” Costolo tweeted in an exchange yesterday with early Twitter employee Jason Goldman. “I’ll catch up with you later.”

PepsiCo Inc., whose Frito-Lay division sells Doritos, declined to comment.

Twitter, Progress

The culture of the company was set by its founders and probably won’t change, Thiel said. Even if Twitter does overcome obstacles, it is unlikely to advance society, he said in an interview with Bloomberg Television’s Emily Chang, noting that Facebook probably won’t either.

“I think the 2,000 or so people who work at Twitter will be gainfully employed for many, many years to come,” Thiel said. “A company like Twitter will not be enough to take our civilization to the next level. A company like Facebook is not enough to take our civilization to the next level.”

Thiel may not disapprove of smoking pot. He donated $70,000 to a 2010 California marijuana legalization campaign

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