"I love twitter." Jack Dorsey, founder and CEO of the social network, let his almost six million followers know on Sunday. In retrospect, the three words read like a premature farewell message: on Monday, just one day later, he announced his resignation as Twitter CEO.
In an email to the workforce, Dorsey wrote that at some point a company would have to break away from its founding and its founders.
I believe that it is crucial that a company stands on its own two feet, free from the influence or instructions of the founder
He is very sad and at the same time very happy about his departure: There are not many founders who put their company above their own ego.
Farewell emails often only contain the view of the things that the sender would like to spread. And so the selflessness that Dorsey attests to himself is only one reason for his departure.
In fact, the network's CEO has long been criticized. Because of the rather poor business development - and because of possible personal conflicts of interest.
Got stuck in development
Together with others, Dorsey founded the social network in 2006. Back then, Twitter was considered a major competitor to Facebook, did everything a little differently: It limited the number of characters per post to 140 and, thanks to the chronological timeline, functioned like a kind of live ticker of world events. But while Mark Zuckerberg's network developed into a company with billions of users and billions in profits, thanks in part to economically smart acquisitions such as WhatsApp and Instagram, Twitter grew much more slowly.
To date, the company does not come in the numbers of Facebook approach: In the first three months of 2021 Twitter made a loss of 400 million US dollars - Facebook a profit $ 29 billion. Even if a lawsuit this year led to the clear deficit of Twitter: As early as 2020, the company posted losses again after a few years in the black.
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One of the reasons for Twitter's notorious failure is that the social network has not developed significantly. "Twitter seems to be remarkably similar to what it was in 2015," as marketing professor Scott Galloway put it in the New York Times in 2020.
Some of the people on Twitter had the right instinct, for example taking over the short video service Vine, which could be described as a kind of early TikTok. But Dorsey soon stopped working.
Even today, Twitter does not reach the masses: In the third quarter there were 211 million daily active users. For comparison: Facebook last came to 1.9 billion . In Germany, Twitter has the reputation of an elite network, on which journalists, politicians and maybe a few scientists cavort.
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In addition, there are content-related controversies: Just like on Facebook, Twitter is also a place where hatred and agitation can spread. For years, the former US President Donald Trump stood as an example : he was allowed to blow his populist, sometimes racist theses on Twitter undisturbed for a long time. It wasn't until 2020 that the social network began checking its tweets for facts.
In 2021, after the storm on the Capitol, the Trump service shut down completely . Twitter often reacted faster and better than Facebook to such controversies. The basic dilemma of the networks that they want to be independent platforms on the one hand, but on the other hand become hoards of hatred without moderation, has not yet been resolved.
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Dorsey can be blamed for many of these developments, but not for all of them. Two years after it was founded, he was fired as CEO. One reason is said to have been that the social network kept crashing back then - another that the board didn't like it, that Dorsey often went early to take yoga or fashion design lessons. The legendary sentence is said to come from this period: "You can either be a fashion designer or the CEO of Twitter.
You cannot be both." The founder remained on the company's board of directors and returned to the top position in 2015.
However, he was no longer just CEO of Twitter. As of 2009, Dorsey had set up a payment service provider called Square at the same time. Originally started with a credit card reader, the service now also operates the cash app, which people can use to send money to each other. This dual role as CEO of two listed companies has repeatedly met with criticism from investors. The reason: Dorsey is distracted by his activities at Square.
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If you look at the numbers, the concern is not unjustified: Twitter is currently valued at 37 billion US dollars - Square with almost 100 billion. Almost 90 percent of Dorsey's assets came from payment services, wrote marketing expert Galloway on the Business Insider news platform. He saw Dorsey as a brake on Twitter's potential : Platforms like TikTok or Clubhouse had long since offered payment services. Twitter, however, does not. This fact constitutes a conflict of interest.
The activist investment fund Elliott Management, behind which the billionaire and hedge fund manager Paul Singer is, acquired shares in the social network in 2020 and is said to have been working on getting rid of the Twitter CEO. Thanks to a deal, Dorsey managed to secure the top post. But a committee was set up to examine the company's governance structures and succession planning. In retrospect, that was probably the beginning of the end of Dorsey's second epoch as Twitter CEO.
His successor will now be the previous chief technology officer Parag Agrawal. He has been with Twitter since 2011 and has been Chief Technology Officer since 2018.
The change was welcomed on the stock exchange: After Dorsey announced his departure, Twitter shares briefly rose by eleven percent. Seems like investors won't miss the founder that much.
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