Skip to main content

Twitter’s subpar earnings raise questions about acquisition, Dorsey’s future

twitter dorsey trump jack
Jack Dorsey/JD Lasica/Flickr
Has Twitter CEO Jack Dorsey shipwrecked the beloved platform he helped create? Following another quarter of disappointing results, which saw the company miss revenue expectations, all eyes are now trained on the Twitter chief. Will he abandon ship? Or, as so many analysts have suggested, shop around for an acquisition or merger?

Nestled within Twitter’s letter to shareholders there were some glimmers of hope. The company’s revenue grew 20 percent year-over-year to reach $602 million, although it still came in below Wall Street’s expectations of $607 million.

As was the case in the previous quarter, Twitter’s advertising is partly to blame. Despite seeing ad revenue hit $535 million, an 18 percent increase year-over-year, Twitter claims that it saw “less overall advertiser demand than expected,” a worrying trend that could continue into the third quarter.

Regarding the future, Twitter’s outlook has consequently taken a hit, with the company expecting revenue to be in the range of $590-610 million. That’s well below analysts’ expectations of $670 million. Wall Street is reportedly shocked by the overall figures, which represent Twitter’s slowest quarterly revenue growth since the firm went public.

Dorsey can’t have been too surprised by speculation mounting over a prospective Twitter buyout. Faced with the question, he remarked that the platform is a “service of importance” with “so much farther to go.” The statement aligns with the general message in the company’s letter to shareholders, which fundamentally asserts that Dorsey’s vision still needs time to come to fruition.

The strategy, as outlined by Twitter, includes its big bet on live-streaming, which Twitter believes can bring in lucrative video advertising dollars. A new marketing campaign, launched yesterday, also puts the emphasis on the platform’s live news credentials. Combined with its focus on real-time video, Twitter evidently believes that it can attract users by encouraging spectatorship over participation. Other upcoming changes, that will affect Twitter’s more active users, include an uptick in notifications in regards to breaking news events.

The quarter itself, on the other hand, saw little signs of life in regards to user growth. Twitter added 3 million users to reach a total of 313 million monthly active users, a pallid increase of just 3 per cent year-over-year.

In comparison, Twitter’s rivals (including Facebook, Instagram, and Snapchat) have gone from strength to strength, particularly in regards to mobile advertising revenue, and user growth. Twitter is asking for patience, but after a year at the helm, many feel Dorsey has failed to deliver. One thing is for sure, time is no longer on his side.

Saqib Shah
Former Digital Trends Contributor
Saqib Shah is a Twitter addict and film fan with an obsessive interest in pop culture trends. In his spare time he can be…
Curious about Twitter’s future? So is the U.K. parliament
elon musk stylized image

We're all wondering what lies ahead for Twitter now that it is going to be owned by Elon Musk. Though the Tesla CEO has tweeted hints of what's to come for the social media platform after his acquisition, the U.K. Parliament has decided to get the details via a more straightforward approach: Inviting Musk to testify before them.

On Wednesday, the U.K. Parliament's Digital, Culture, Media and Sport Committee (DCMS) tweeted out a copy of a letter it sent to Musk, inviting him to speak about his plans for his newly acquired social media platform.

Read more
Elon Musk’s Twitter acquisition just got a noteworthy endorsement
Jack Dorsey sits in front of a Twitter logo.

Elon Musk dropped $44 billion to buy Twitter, and the acquisition has already received its fair share of criticism. One endorsement, though, came from the bird app's co-founder and former CEO, Jack Dorsey, who appears to have given his blessing to it -- via a tweet thread.

On Monday night, Jack Dorsey posted a thread on Twitter explaining his thoughts on the matter. And his thread started a couple of tweets: A Tidal link to a Radiohead song and a tweet describing his love for Twitter and how he feels that it's "the closest thing we have to a global consciousness."

Read more
Jack Dorsey resigns as CEO of Twitter, hands reins to CTO Parag Agrawal
Jack Dorsey, co-founder and former CEO of Twitter

It looks like Twitter founder Jack Dorsey is leaving the chief executive's office once again — but this time, it's by choice.
Sources within Twitter first shared the news with CNBC earlier this morning, and it’s now been confirmed by Dorsey himself — quite appropriately via a Tweet on his social media platform. 
https://twitter.com/jack/status/1465347002426867720?s=21
While the original reports didn’t have much to say about why Dorsey was stepping down, or when it would be happening, it didn’t take long for the erstwhile CEO to share the news himself. In his tweet, Dorsey includes a screenshot of the email that he sent internally to Twitter employees, describing it as part of his desire for Twitter “to be the most transparent company ever.” 
Dorsey explains that although he will continue to serve on the board until the end of his term next spring, as of today, he is officially handing over the reins of CEO to Chief Technology Officer Parag Agrawal, as confirmed by the company’s board of directors. The board also named Bret Taylor as the new chairman of the board, He will succeed Patrick Pichette in that role. 
In his internal email, Dorsey also shared that he has no plans to remain on the board after his term expires, as he feels “it’s really important to give Parag the space he needs to lead.” 
Dorsey says that he’s leaving because he feels it’s best to separate a company from its founders, and that now is the right time to do so. “I believe it’s critical a company can stand on its own, free of its founder’s influence or direction,” Dorsey said in the message to Twitter employees. 
Based on the message, it appears that Dorsey has been planning this for a while. He noted that he’s been working hard “to ensure this company can break away from its founding and founders.” It’s just been a matter of finding the right person to take over the helm, and Dorsey had been grooming Agrawal for some time, due to “how deeply he understands the company and its needs.”
“Parag has been behind every critical decision that helped turn this company around. He’s curious, probing, rationale relative, demanding, self-aware, and humble. He leads with heart and soul, and is something I learn from daily. My trust in him as our CEO is bone deep,” Dorsey told employees in the internal email.

Dorsey's past with Twitter has been marred by controversies
Over the years, Dorsey has had a somewhat tumultuous relationship with the company that he helped to create in 2006. He initially served as CEO until 2008, but was pushed out of the role after his co-founder Evan Williams and the board felt that he was unfit to lead the growing social media company. 
While Dorsey remained with Twitter as chairman of the board, he refocused most of his attention elsewhere, forming the popular mobile payment company Square. Once that was up and running, Dorsey rejoined Twitter in early 2011 to focus on product development, dividing his time between that and his ongoing work at Square. 
After four more years of struggling to come up with a long-term vision, Twitter’s board returned Dorsey to the position of permanent CEO of Twitter in fall 2015, replacing Dick Costolo, who had taken over from Williams in 2010.
During Dorsey’s second tenure, he’s presided over a social network that’s faced some significantly new and different challenges. 

Read more