👋 so long, Jack
Say hello to Twitter's new CEO Parag Agarwal.
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The Big Story
It's been a fun ride, Jack.
Twitter CEO and co-founder Jack Dorsey announced that he's stepping down from his role, ending a 16-year-long stint at one of the world's most influential microblogging platforms. The resignation will come into immediate effect, while Dorsey—who assumed the executive role in 2015—will remain on the board till May 2020 to facilitate a smooth transition.
Twitter CTO Parag Agarwal, who joined the company in 2011 and oversaw its decentralized technologies such as blockchain, will take over as the new CEO. By doing so, the 37-year-old software engineer will become the youngest person to run an S&P 500 company, joining the growing list of Indian CEO's heading large US corporations.
The news was positively received by the markets, which bumped up the company's stock by more than 10%.
An overview of Agarwal's journey so far:
He earned his Computer Science degree from IIT Bombay and received his PhD from Stanford University. He's worked at Yahoo! Inc., Microsoft, and AT&T Corp and was appointed Twitter's CTO in 2017. Since then, he's been working on the platform's technical strategy, including overseeing advancements in machine learning.
And while this could be good news for the company, there’s the obvious caveat...
And as is the case with Twitter, the responsibilities that Agarwal will inherit are quite extensive.
For starters, the company's stock has been underperforming since its IPO launch in 2013—hovering below 10%. Despite posting stronger-than-expected Q3 revenue growth of 37% last month, Twitter's 'monetizable daily active users' was below analysts' forecast of 212.6 million.
While the company was comparatively better off than its rivals following Apple's privacy policy change, it said that it's still too early to assess the decision's long-term impact. So, to double down on its revenue targets, Twitter announced in February that it's aiming to push annual revenue to $7.5 billion by 2023 and increase its daily active users to 315 million.
But that’s not all. For years, Twitter has had a content moderation problem.
Under Dorsey's leadership, the social media giant also has been unable to moderate hate speech, misinformation, and other harmful content, which landed the platform in several political scuffles—including one with Narendra Modi's BJP government over blocking accounts and tweets regarding farmers' protests against three new agricultural reforms. (FYI, the legislation has been unanimously repealed by the Indian parliament on Monday!)
Then there's the problem of product direction. Twitter's functionalities have remained stagnant for years and while the platform has introduced a slew of new features and acquisitions, it's been unable to deliver on its promise. Because of this, Dorsey's authority was massively scrutinized by investors, who raised concerns over his split attention between managing Twitter and Square Inc—a digital payments giant.
Finally, in early 2020, activist investor Elliott Management decided to take action and organized a massive coup against removing Dorsey, citing that the company has fallen behind on innovation and ignored popular features like stories and filters heavily marketed by Instagram and Snap. But that was quite short-lived as months later, Twitter struck a deal with Elliot Management and Silver Lake, awarding both investment firms a seat on Twitter’s board.
While Agarwal's appointment received mixed responses within the company, Twitter shareholders seemed optimistic as the platform will have a full-time CEO for the first time in years. But for Agarwal, the real challenge remains arduous as he needs to ramp up Twitter's revenue and engagement metrics while also aggressively pushing for changes in the company's culture to ship new products faster.
The question is: can he do it all while maintaining cordial relationships with employees, the press, and regulators?
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