Since replacing Jack Dorsey as the CEO of Twitter (TWTR +0.00%) in late November, new CEO Parag Agrawal has already made clear that he wants to leave his own mark on the company and take the social media giant in a new direction. In this segment of Backstage Pass, recorded on Dec. 3, Fool contributors Toby Bordelon, Jose Najarro, and Rachel Warren discuss some recent organization changes implemented by Agrawal and what the future of Twitter could look like.
Toby Bordelon: Twitter has got a new CEO. We all are probably aware of that by now. I think his name, I hope I pronounce this correctly, Parag Agrawal I think is his name. He is a former chief technology officer of the company. So that's interesting. Not a COO, not a CFO, but a chief technology officer elevated to CEO. He replaced Jack Dorsey earlier this week and he's already hard at work. He's not coasting. No, no, we're going into holiday season, a lot of people taking it easy, not him. Breaking news today, he announced a pretty significant restructuring of the company. This includes the departure of two executives, the head of engineering, along with the head of the design team.
The consumer, the revenue, and the core tech divisions are all getting new leaders. He announced those today, too. According to our new CEO, "this restructuring is meant to focus the company on clear decision-making, increase accountability, and faster execution." There's some things he's been criticized within, Jack Dorsey was more of a hands-off leader. Here's my question. What's your reaction to this? What do we think? Do you guys have any early thoughts on our new Twitter CEO and the future of this company going forward? Jose, what do you think here?
Jose Najarro: First, I want to say if there was ever one leader overall top management to take over the new CEO position, I'm always in favor for the CTO. Just because they're always in the front-end of what's happening form of technology of where the company is moving forward, and I feel like they get the first-hand experience of what's happening within the company and how it's evolving overtime. I enjoy that the CTO is the new CEO.
That management shift is, I don't follow Twitter to an extent, but seeing leadership or management changing that quickly can be a bit scary, but maybe it means that hey, he is focused on where he wants to go. As a user, Twitter is probably one of the only social platforms that I've used. Throughout the past six months, I feel like Twitter has announced a lot of new tools, especially becoming more of a content creator platform.
They recently announced if you're a content creator, people can actually give you tips based on what you produce. I believe it's right now you can get paid in normal currency. I believe you can also get paid in Bitcoin, which I thought was pretty interesting. I'm pretty sure that's probably more Jack's move because he's been a big crypto bull all around. Twitter has also done things like subscription.
I know many people know Substack, but Twitter bought a small subscription company and they're a newsletter company and evolved through there. Finally, I feel like while I've been studying this crypto market, the one social platform that I see has been very friendly to the crypto market has been Twitter. One thing they said they were working is, you guys know the NFTs, all these NFTs are collectibles.
People use them as a profile picture, but Twitter was working on a way where you can connect your NFT to your Twitter so you can verify that, hey, this is my NFT and I'm the one using it. It's like even though if you can go copy and paste someone else and put at your profile, you won't get that verification check because you don't physically own it. Twitter, I don't know if that's because Jack has been a nice crypto bull to some extent, we kind of see it in Square, but I want to see how that changes.
Is this new CEO still bullish in that crypto market and that kind of also content creator market, or does he want to move out of that? Even though I'm not an investor, as a user, I want to see how that goes forward.
Rachel Warren: I agree with everything you said. I think it's not uncommon to see a major shakeup in leadership after a new CEO takes charge. That's pretty common and I think this was probably to be expected. It's early to say what his exact leadership style will be. But I do think it's safe to say he's trying to forge his own path that might separate him from Jack Dorsey's path. He is facing a lot of challenges as incoming CEO.
I think he is implementing a lot of changes early on that can contribute to the long-term vision he has for the company and its success. I think it's interesting to note this CEO, he's been with the company for 10 years. A lot's changed in the world and the social media space in that time. He's been there during a very formative period for Twitter. He has a whole wealth of experience to bring to the table.
Twitter is facing a lot of challenges in the modern social media space, where it really needs to up its monetization of its users and continue to benefit from that ad-based platform in a time where you've got more of these privacy changes that have been rolled out by companies like Apple. That's the whole challenge for Twitter that it has to contend with and I think in the coming years. Recently it had set a goal to adding more than 100 million monetizable daily active users by 2023.
That's not that long for the new CEO to implement the vision that was already in place before he entered the CEO chair and then to build upon that. I think that he has a lot to do and I think he is starting off strong. I saw an interesting quote by a Senior Analyst at eMarketer on an article on MSN saying, "Twitter is in the midst of shaking up its business model. The ad world is facing real challenges with the new targeting and privacy initiatives and Twitter is experimenting with new revenue streams to augment its ads business and meet the aggressive revenue goals it set last February and the next CEO will have to face the challenge of making good on those goals."
I think what we're seeing here is a very initial part of that multi-step process, and that often involves a shakeup in leadership.
Bordelon: Thank you, Rachel. For me, I think one thing I suggest, we see this, took over on Monday, was it? [laughs] We see this restructure announced today. That suggests to me that this was not just a sudden CEO transition, it's been in the works for a while.
You don't announce a massive reshuffling like this just a couple of days before taking over unless you've already planned it. No one figures this out in two or three days. He's been thinking about this and I think it's likely that Mr. Dorsey was also involved to some extent, at least he knew about these plans before he stepped down. He knew what direction Mr. Agrawal was going to go in, I think, that's my suspicion, that's my guess.
I think what we have is actually something that's been in the works for a while, like planning in terms of the succession. I think it shows decisiveness and I think it indicates that he's going to run this company a little bit differently. Being clear like yeah, we're taking a different approach and we're going full steam ahead on what we need to do here, and I like that.
I like what you said Jose too, about the CTO. I think that could be good. I think it depends on the company but I think for Twitter, as Chief Technology Officer taking over will be somewhat, perhaps, maybe a studio head taking over for Disney or something.
It makes sense, right, that you want the person in charge of the business to have a good insight into what's your core business actually is and come from one of the most important departments in your business. For Twitter, that's going to be the technology department, that's what they do. We'll see how he does and maybe it's a trend. Maybe we see more of these CTOs takeover as CEOs going forward.
