Twitter Inc. is set to release its second quarter (Q2 2015) financial results today after the market closes. Wall Street and investors are watching like hawks to see how the firm has fared in the second quarter. The attention of the market will surely be on earnings, revenue, and user growth. Twitter will hold an earnings conference call shortly after the earnings release. The focal point of that earnings call will be a quest to know if Twitter will be naming a new CEO to lead the affairs of the firm.
Twitter’s Quest for A CEO
Twitter has been in the search for a new CEO after former CEO, Dick Costolo stepped down from the position at the end of June. Co-founder, Jack Dorsey took over as the interim CEO while Twitter started searching for a permanent replacement for Mr. Costolo. Analysts have weighed in on who should be next CEO for Twitter and on how the firm could fare if it doesn’t get its CEO choice right.
Mad Money Host, Jim Cramer, has flayed Twitter for not having a replacement CEO ready at the exit of Costolo. The fact that the firm opted for an interim CEO suggests that the board doesn’t have a firm handle on the next direction for the firm. In Cramer’s words, “mark my words, if Twitter doesn’t get its act together, it will be the first big fizzle of the second Internet revolution.”
An RBC Capital Market analyst, Mark Mahaney has suggested the problem with Twitter is not about the product but a problem with the firm’s focus and direction. He thinks that Twitter needs a CEO that is versed in Product Development, Marketing and Advertising.
He also expressed concerns about the firm’s prospects. In his words, “I’ve never seen as much C-level turnover in a company 18 months post an IPO as you’ve got now with Twitter“.
Interim CEO, Jack Dorsey might or might not transition into a position with Twitter for a number of reasons. For one, Twitter has said that it wants a committed, full-time CEO but it doesn’t look as if Dorsey fits the full-time bill. Dorsey is the CEO of Square, a mobile payments startup, and there are indications that Square is preparing to IPO by the end of this year.
Another possible CEO for Twitter is Adam Bain, Twitter’s head of global revenue and partnerships. Bain has been the brain behind Twitter’s products that generate ad revenues; hence, he appears to be someone that understands what needs to be done to reposition the firm.
It is obvious that Twitter is likely to hire an insider, this might be a great move in principle but it doesn’t look smart in practice. Dorsey, Costolo, and Evan Williams, all former Twitter CEOs will remain on board; hence, an in-house CEO might be influenced by the same set of ideas and opinions. It might be possible for an outsider to effect the much needed change within the company.
What Does Twitter Need in a CEO?
Twitter must show investors that it has made progress in its search for a permanent CEO today. Twitter has a great product that might not be for everybody. What the firm needs is a CEO that understands that Twitter is not Facebook, a CEO that can polish the firm’s current product to bring out its real value.