Nov 29, 2021 - Economy

Twitter's next act

This is a tweet flying the nest

Illustration: Annelise Capossela/Axios

Twitter co-founder and CEO Jack Dorsey is exiting the company he helped build at a time when its future has never been so uncertain.

Why it matters: The person who controls Twitter controls the de facto public square — with implications for politics, media and free speech.

The big picture: Twitter is in the midst of its biggest transformation yet — shifting from an ad-based social network focused on text to a subscription-based platform centered on smaller communities and multimedia.

  • In recent months, Twitter has launched a slew of products catered to long-form content, including live audio and newsletters.
  • In rolling out new products, Twitter hoped to address concerns that it had fallen behind competitors like Facebook and Snapchat on product development.

The company's new CEO, longtime chief technology officer Parag Agrawal, will be responsible for helping Twitter hit lofty user and revenue goals that reflect Twitter's transformation.

  • Twitter said earlier this year that it plans to increase its monetizable daily active user base (mDAUs) from 211 million at the end of last quarter to 315 million by Q4 2023. It plans to more than double its global annual revenue to over $7.5 billion by Q4 2023.

Details: In a resignation letter to staff, Dorsey — who also serves as the CEO of the digital payments company Square — said that founders leading tech firms is "severely limiting and a single point of failure" for tech companies.

  • Be smart: While he didn't address his future plans, there's broad consensus that Dorsey will continue to focus on things like cryptocurrency and blockchain — technologies being pioneered at Square.

Behind the scenes, tension has been brewing between Dorsey and stakeholders who argued he was a part-time CEO.

  • Employee sources tell Axios they felt like Dorsey was never fully committed to the job. Sources tell Axios employees found out about Dorsey's resignation Monday morning via news reports.
  • Activist investor Elliott Management in early 2020 pressured Dorsey to resign as CEO, reportedly over Dorsey's attention to other projects, like Square. Twitter struck a deal with Elliott a month later, adding Elliott partner Jesse Cohn to its board.
  • In a statement Monday, Elliott endorsed Agrawal as CEO and Salesforce chief Bret Taylor as the company's new board chairman.
  • The writing was on the wall. Twitter filed a regulatory form last November updating its CEO succession plan.

What to watch: The official Twitter account for the Republicans on the House Committee on the Judiciary tweeted Monday, "Didn’t think it could get much worse than Jack Dorsey. But yikes," in response to a tweet Agrawal sent more than a decade quoting a joke segment about stereotypes on "The Daily Show."

  • Dorsey took a much different, less polished approach to Capitol Hill than his tech CEO counterparts at Google, Facebook and Amazon, often appearing for testimony bearded and seemingly unbothered.
  • Dorsey often stood the most firm in his defense of tech's intermediary liability law compared to other tech execs, and generally valued free speech above all, even when Twitter decided there were more lines users could not cross and stay on the platform.
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