Split shift CEO.

Photographer: John Chiala/CNBC/NBCU Photo Bank/Getty Images

Twitter Is America's Most Entertaining Corporation

Justin Fox is a Bloomberg View columnist. He was the editorial director of Harvard Business Review and wrote for Time, Fortune and American Banker. He is the author of “The Myth of the Rational Market.”
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By this point I think we can all agree on one thing about Twitter. It has become, by quite a long distance, America’s most entertaining corporation.

This morning’s announcement that co-founder, chairman and interim chief executive officer Jack Dorsey will drop the "interim" from his title wasn't a surprise -- it came after months of suspense, speculation, debate, capped by the impassioned campaign (mostly but not exclusively on Twitter) by early investor Chris Sacca to get the company’s board to decide already.

But there was a twist. No, not that Dorsey will also stay on as CEO of Square, the digital-payments company he co-founded that is making plans to go public soon. That’s fascinating, but again, it was expected. The news is that, “to further simplify the demands on his time,” as search committee Chairman Peter Currie put it this morning, the Twitter board is relieving Dorsey of his duties as chairman and starting a search for a new outside director to fill the role.

More suspense! More speculation! More debate! This should be fun.

It’s pretty much always been this way for Twitter. Unlike most of the other iconic companies of the digital age, which have been dominated by a founder or founding pair, Twitter from the beginning has defied attempts to control or even define it. Part of that is just in the nature of the product. As co-founder Ev Williams, who remains a board member and the company’s biggest shareholder, put it in a 2013 interview with Inc.:

There are certain businesses that you know what they are when they're born. You don't necessarily know how big they are or what's going to make them successful, but Google, for example, was always a search engine. With Twitter, it wasn't clear what it was. They called it a social network, they called it microblogging, but it was hard to define, because it didn't replace anything. There was this path of discovery with something like that, where over time you figure out what it is.

Twitter is still figuring that out, actually. And interpersonal dynamics have been complicating things all along, starting with the always-fraught relationship of laconic Midwesterners Dorsey and Williams. Dorsey was Twitter’s first CEO, but Williams -- who personally bankrolled the company in its early days -- fired and replaced him in 2008. Then Dorsey participated in the boardroom coup that ousted Williams in 2010 and replaced him with Dick Costolo. Throw in the complicated saga of the other two co-founders, Noah Glass and Biz Stone, the acquisition approaches from Facebook and the growing pressures from outside investors, and you have quite the melodrama, which you can read all about in Nick Bilton’s book, “Hatching Twitter.” It is -- no surprise -- hugely entertaining.

Still, Twitter wouldn’t be so much fun if its story were just one of dysfunction. In that case it would just be a smaller, even sadder Hewlett-Packard. Instead, despite all the drama, the company remains a legitimate phenomenon -- an experiment by a few geeks in San Francisco that has transformed the global information ecosystem, and has gone from zero revenue five years ago to $2 billion a year today.

Twitter’s problem is that it’s finding it harder and harder to attract new users. This had to happen at some point, and Twitter is getting better at wringing revenue out of the users it has. But the data from that other social-network company an hour-plus drive away down Highway 101 indicate that Twitter’s user-growth slowdown is happening way too early.

The problem, as Dorsey put it on the conference call that followed the big announcement this morning, is that “currently the product makes people do a lot of work to realize the value.” So he and his colleagues have lots of new initiatives designed to make Twitter more intelligible and useful for people who haven’t been using it since 2009. The biggest one is called Project Lightning, a “guide to what’s happening on Twitter right now,” as Twitter head of product Kevin Weil put it this summer, that was mentioned again and again on this morning’s call.

So…we’ll see if all that works, and whether Jack Dorsey can succeed at Twitter while also running another company a block away. Currie, a Silicon Valley wise man who in prehistoric times was chief financial officer of Netscape Communications, said this morning that this really wasn’t the plan back when the search started in June:

We assumed we would only consider a candidate who could make an undivided commitment to be our CEO. But over time it became apparent to us that Jack was not just meeting but surpassing the expectations we had of him as interim CEO while also running Square.

Dorsey is a charismatically eccentric fellow with a history of brilliant ideas but a less-than-great reputation for getting things done. It may be that the dual job plays to his strengths -- his “gifts,” Currie said, are “product innovation,” “execution cadence” and “leadership ability” -- by leaving him no time for anything else. It is others at both Twitter and Square who have to actually make things happen, a reality that the Twitter board recognized by elevating revenue chief Adam Bain to chief operating officer. Maybe they can, maybe they can’t. But I guarantee that the attempt will be highly entertaining.

  1. 39 minutes without traffic, according to Google Maps. But when is there ever no traffic on 101?

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

To contact the author of this story:
Justin Fox at justinfox@bloomberg.net

To contact the editor responsible for this story:
James Greiff at jgreiff@bloomberg.net