Analysts believe that new leadership will open the door to new growth in crypto and subscription models.
“This is emancipating and freeing up for opportunities like fintech,”Peter Csathy is the chairman of CREATV Media. “Not having the founder as CEO opens up a new life for it. They have been slow in rolling out monetization features, and that needs to change for them.”
The company stated that it plans to increase its revenue by doubling its current level to $7.5 billion by 2023. In Q3, the platform added 5 million daily users and now counts 211 million monetizable daily active users, with some 350,000 of those being verified accounts — but the real challenge that remains is how to effectively monetize its product.
Dorsey’s replacement is Parag Agrawal, Twitter’s current chief technology officer, who has Worked on cryptocurrency technologies and whose Twitter account quickly gained some 40,000 followers after Dorsey’s resignation. Csathy stated that Agrawal appears laser-focused in monetizing, and Twitter has an engaged audience who can introduce crypto features.
But Agrawal is an unknown quantity on Wall Street — and Dorsey spent much time in his Staff farewell email praising Twitter’s new chair, Salesforce COO Bret Taylor, as someone who “understands entrepreneurship, taking risks, companies at massive scale, technology, product and he’s an engineer.”
That uncertainty about the company’s future led to an unexpected result. On Monday, shares of Twitter jumped as much as 10% in pre-market trading following news of Dorsey’s departure — but ultimately dropped 2.7%.
Given Twitter’s pressure to grow and monetize, it’s not surprising that there is new leadership. Dorsey was actually Twitter is the best place to get firedIn 2008, he was fired for his management style and conflicts with the board. Square was founded by him in 2008, and he returned to Square in 2015, even though investors doubted his ability to concentrate. Two organizations can be run.
“I did have concerns about having one person being the CEO of two publicly traded companies, especially when one, Square, was thriving in the market and one, Twitter, was failing to live up to its revenue potential,”Dave Pell, media expert said.
In his resignation tweet, Dorsey acknowledged that a company headed by its founder can be restricting. “There’s a lot of talk about the importance of a company being ‘founder-led,’”Dorsey shared his thoughts on Twitter. “Ultimately I believe that’s severely limiting and a single point of failure. I’ve worked hard to ensure this company can break away from its founding and founders.”
Twitter Blue is poised to grow in the future with additional subscription models. Csathy explains that most subscription models have different price tiers. Twitter may offer additional options to its $2.99 monthly premium service. This could include a more basic version or more advanced features for power users.
While critics have questioned why it took so long for Twitter to add subscription models, it is unclear how much of that is due to Dorsey’s leadership. In November, the company launched its subscription service. It includes features that power users have been asking for for years.
“The two companies he ran have divergent priorities,”Csathy said. “It’s never optimal when a CEO is part-time. … (Dorsey) has been kind of a punching bag in the media, so there’s a lot of reasons for him to go.”
Much like its social media rivals, the Twitter exec has also been facing growing pressure from lawmakers over the platform’s role in the 2020 election. Dorsey had defended former President Trump’s ban from Twitter and said that the Jan. 6 Capitol riot and Trump’s tweets threatened public safety. Particularly Republican lawmakers have condemned Facebook and Twitter for suppressing the voices of their constituents on social media.
Ryan Detert (CEO of Influential), observes that Twitter has made more efforts to create programs for content creators.
“We’re seeing a lot of positive changes at Twitter and that this ‘changing of the guard’ is part of an effort to reinvigorate the platform, reengage users, and capture new ones,”Detert said. “With the emergence of NFTs and the Metaverse, it only makes sense that (Dorsey) will be spending most of his time and resources in these rapidly growing industries.”
In March, Dorsey notably sold the first tweet ever as an NFT, or non-fungible token, for 1,630.58 ether. With the cryptocurrency trading for $1,746 per ether at the time, that amounted to more than $2.8 million for Dorsey’s tweet.
Although Twitter’s revenue and user growth have been relatively stagnant recently, the social network maintains a strong user base and remains a major source of information in real-time, especially for engaged social media users and journalists. Spaces, its live audio feature, is competing with Clubhouse. Revue, the newsletter service, is an alternative to Substack or Facebook Bulletin. Experts believe Twitter has the potential to expand its reach and influence as a social media platform.
“Until this day, Twitter is still the only major platform for real-time discussion of politics, sports, television, and breaking news,”Simon Owens is a tech and media expert. “Wall Street judges the company based solely on the number of logged-in users, but think of how often you see tweets embedded in articles or displayed in TV broadcasts. Twitter’s influence reaches far beyond its own website.”
This year, Twitter’s U.S. ad revenue is expected to surpass $2 billion, according to Insider Intelligence, with growth driven by more product launches, sports and live events. Twitter’s stock gains, however, have been roughly the same compared to a year ago. After a $537 million loss, its Q3 revenue increased 37% to $1.28 Billion. This was after it settled a lawsuit with investors regarding misleading information about user growth.