Twitter Confirms Board Member Search, Aims to Change "Weird" Features
CEO Jack Dorsey says Twitter will do away with features that "nobody understands."
All eyes were on Twitter CEO Jack Dorsey on Wednesday afternoon when he took to Periscope to answer questions about the company’s fourth-quarter earnings.
It’s a period of heavy scrutiny for Dorsey, who officially took over as CEO in October. Since then, he’s laid off employees, seen an exodus of top staffers and launched a controversial new product.
Investors were looking for signs of stability and growth from Twitter. Instead, they got a wake-up call. Twitter reported that it lost users between the third quarter and fourth quarter last year. Excluding people who receive tweets on their phones, Twitter had 305 million monthly active users, down from 307 million MAUs during the third quarter.
That news sent the stock spiraling down as much as 12 percent during after-hours trading. But it rose back up over the course of Twitter’s hourlong conference call with investors. During the call, Dorsey, CFO Anthony Noto and COO Adam Bain presented a united front, addressing questions about executive turnover and noting that Twitter’s user base rose back to third-quarter levels in January.
Executive chairman Omid Kordestani also stepped in to show support for the company, which over the weekend faced a flurry of tweets from users with the hashtag #RIPTwitter after reports of a change to the timeline that would de-emphasize chronological, live tweets. “Twitter is a mission-driven company with an iconic product,” said Kordestani, adding that “success doesn’t come from short-term actions” and that the work “will take time.”
Here are the highlights from the call.
Seeking: Board Members
Reports have been circulating since January that Twitter is looking to appoint a high-profile media personality to its board of directors, and Dorsey confirmed that he will be spending a significant amount of time recruiting for the board. He added that he’s looking for someone with experience in public companies, finance, international policy and media. “We want a board that continues to represent the best of Twitter,” he said.
Dorsey has been focused on turning Twitter into a platform for the masses, and that could mean getting rid of some of the features that hardcore users know and love. That includes replying to someone by using the @ sign and the quirk where if you reply to someone only the people who follow both of you will see it, unless you put a period or space in front of the reply. Dorsey called those features as “weird” and said that “nobody understands” how they work. “We need to fix these things,” he continued, noting that it isn’t easy for people to sign up for the service in part because Twitter doesn’t do a good job of connecting them to people they know or would want to follow.
Then, there’s the new timeline feature, which showcases tweets that you may have missed when you first log into the app. After BuzzFeed News wrote about the new feature last Friday, users were quick to call it the death of Twitter. But Dorsey was singing a different tune on Wednesday. He says that early tests showed positive responses, including increased tweeting and retweeting. “It does improve the experience fundamentally,” he added.
All About Live
If it wasn’t already clear, Dorsey wants Twitter to be all about live experiences. “Twitter is live,” he proclaimed at the start of the call with investors. “We think it’s the fastest and easiest way to understand the power of Twitter and get into it,” he later explained, noting how it could be used during sporting events, protests and natural disasters. “Once you see an event unfold on Twitter, there’s a real sense of electricity.” A big part of that live experience is Periscope, which several executives touted during the call. COO Adam Bain noted that Doritos took advantage of a new feature by broadcasting live on Periscope during the Super Bowl and then marketing the stream in Twitter with a promoted tweet.
A big question since Dorsey took over as CEO is how he will split his time between Twitter and his other company, Square, where he is also chief exec. He’s been asked the question many times, but on Wednesday he laid out a slightly more detailed account of how he spends his time. “We set up a structure that is working very well for me so that I can spend meaningful time at both companies,” he said, elaborating that he starts the week by comparing his calendars to see where he will need to devote more time. When he is at Twitter, he says he’s focusing on recruiting. That’s especially important given that Twitter announced in October that it would be laying off 8 percent of its staff and in January lost five top executives. Dorsey says that he’s specifically looking for talent in the product, engineering and design fields.
In late January, Twitter held an all-hands meeting that resulted in a number of employee tweets using the hashtag #OneTeam as a sign of support for the company. Although the rally cry wasn’t specifically mentioned during the conference call, it loomed large. Kordestani started things off by noting that the Twitter team has his “full faith and support.” After handing things off to Dorsey and his team, the executives were all positive. Noto explained away flat growth during the fourth quarter by noting that that period is “historically our seasonally worst quarter,” and Dorsey said he’s seen “positive activity” around the Moments feature launched last year, though he did not provide specific numbers.
And despite one disappointing metric, Twitter beat Wall Street estimates with adjusted earnings of 16 cents per share and reported revenue growth of 48 percent, in line with Wall Street’s expectations. After the initial 12 percent drop in share price after hours, investors seemed to cool. Twitter stock was trading down about 3 percent at the end of the call.