In regaining CEO job, Twitter’s Jack Dorsey follows in Steve Jobs’ footsteps
Jack Dorsey
It’s a story line that the tech world has seen before.
A company co-founder, visionary but immature, gets booted as chief executive, goes on to create and lead a new company, then returns to his original start-up to take the reins again.
With the announcement Monday that Jack Dorsey is back as permanent CEO of Twitter Inc., the 38-year-old is following in the footsteps of the man he once called a “mentor from afar”: Steve Jobs.
Will history continue to repeat itself? Namely, will Dorsey be able to pull off the kind of monumental turnaround for Twitter that Jobs orchestrated at Apple Inc.?
Pulling off a Steve Jobs is a tall order. But industry analysts and investors say Dorsey is the ideal person to tackle Twitter’s numerous challenges, and they cheered the widely expected move.
“Jack literally sees the future of the product and has a unique talent for inspiring everyone working at Twitter to make it happen,” said Chris Sacca, a prominent Twitter investor. “His approach cuts through political mazes and is all about results. Since he took the helm as interim CEO, Twitter’s pace of execution has accelerated and the core business has improved. He is just getting started.”
John Blackledge, an analyst at Cowen & Co., said Dorsey’s “long association with Twitter, reputation as a technologist and clear passion for the company” made him stand out from the list of potential CEOs.
Twitter was in serious need of an injection of energy and fresh ideas. The San Francisco microblogging company has consistently disappointed investors and been plagued by management dysfunction and sluggish user growth. Before the CEO announcement, shares had dropped 27% this year; they rose $1.84, or 7%, to $28.15 on Monday.
In the three months since Dorsey became interim CEO, he has publicly criticized the company, slamming what he called its lack of focus, unintuitive service and unclear value during a July earnings call. He said recent product initiatives have yet to produce “meaningful impact” on growth and engagement, which “is unacceptable and we’re not happy about it.”
He reiterated his goals in a series of tweets Monday morning, saying he wanted to make Twitter easy to understand by anyone in the world and to give more utility to existing users.
“My focus is to build teams that move fast, and learn faster. In the past three months we have increased our speed and urgency at both companies,” he said. “We’re working hard at Twitter to focus our road map on a few things we can make really great.”
Already, he has demanded more disciplined execution internally and is working to simplify Twitter while making it more relevant. In recent months, Twitter removed the 140-character limit for direct messages; introduced event targeting; and expanded its TV Timelines feature and e-commerce efforts. It is also reportedly thinking of expanding the 140-character limit on tweets.
“Oftentimes, the original idea guy has a unique perspective about what the product should be,” said Brian Blau, research director for consumer technology and markets at Gartner.
There’s no question that Dorsey has brought the big ideas in the past. It was his idea to roll out a microblogging service that would give users a real-time look at events happening around the world. He was the one who sent the first-ever tweet in March 2006: “just setting up my twttr.” That launched the worldwide messaging service that has been used, at one time or another, to keep up with celebrities and world leaders, get eyewitness reports of a plane crash on the Hudson River and organize protests on Wall Street and revolutions in the Middle East.
Dorsey will not receive direct compensation for his role as permanent CEO, according to a filing with the Securities and Exchange Commission.
Twitter also announced the promotion of Adam Bain — the company’s president of global revenue and partnerships, who had at one point been considered the top choice to become CEO — to chief operating officer.
Dorsey is Twitter’s original CEO, but his first stint was dogged by reports of eyebrow-raising behavior — such as leaving work early to attend yoga or sewing classes — and poor management skills. He was accused of stealing the spotlight from other company executives and not sharing the company’s early successes.
Sound familiar?
Jobs, a college dropout, was famously ousted from Apple in 1985 and went on to co-found Pixar, taking it public before returning to Apple as interim CEO and, ultimately, permanent chief executive. Dorsey, himself a college dropout, was fired from Twitter in 2008, then started mobile payments company Square — which filed for an initial public offering this summer — and was tapped in June to become interim CEO of Twitter.
Seven years after his firing, even as Twitter continues to experience growing pains, tech watchers say Dorsey has grown up.
“Jack Dorsey has matured,” Blau said. “Stepping away from Twitter, he was able to look at the company from a different perspective.”
The naming of Dorsey to permanently lead Twitter ends a prolonged search for a replacement for Dick Costolo, who announced his resignation in June after a rocky tenure.
Dorsey wasn’t considered the front-runner until recently. Analysts had said it was unlikely that Dorsey would be named permanent CEO because of his commitments to Square.
But in another Jobs-like twist, Dorsey will do double-duty as the CEO of both companies; Jobs kept his CEO job at Pixar after returning to lead Apple.
“No one with any real skin in the game ever doubted Jack’s ability to do both jobs, especially considering how strong his management teams are at both companies,” Sacca said.
In other top-level changes, Twitter said it would separate the roles of chairman of the board and CEO, with Dorsey giving up his position as chairman. The search for a new chairman is underway. Costolo will depart the board.
Twitter is scheduled to report third-quarter earnings Oct. 27.
“While we are very pleased with today’s announcements, we think that ultimately the company and Mr. Dorsey will be judged on their execution,” said Robert Peck, an analyst at SunTrust Robinson Humphrey. “We have noticed an increased product launch cadence under Mr. Dorsey in his interim CEO role and would look for this to continue. Importantly, we think this applies to advertising products as well.”
Twitter: @byandreachang
Times staff writers David Pierson and Samantha Masunaga contributed to this report.
Twitter: @byandreachang
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