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Twitter's First C-Suite Hire Addresses Only Half of Its Problems

By Andrew Tonner – Jan 28, 2016 at 7:24PM

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Twitter added some top talent to help revive its ailing brand this week, but larger issues loom to revive this struggling tech stock.

Battered and bruised, shares of microblogging site Twitter (TWTR) can't catch a break these days.

Sure, one's trash can be another's treasure, and you could argue that Twitter's depressed stock price represents a buying opportunity at today's discounted prices. However, the news of four major executive departures announced earlier this week will probably delay Twitter's turnaround.

Responding quickly to the exits, Twitter's two-company CEO extraordinaire, Jack Dorsey, announced the first replacement from this week's talent exodus, in an effort to help reverse course at what some view as tech's most visible sinking ship.

Who is Leslie Berland?
Dorsey announced on Tuesday -- by tweet, of course -- that Twitter has hired former American Express marketing executive Leslie Berland as the company's first ever chief marketing officer.

For the majority of investors who've never heard of her, Berland most recently served as the executive vice president of global advertising, marketing, and digital partnerships at AmEx. According to reports, Berland also topped Twitter's CMO search wish list in several important factors.

For starters, management viewed Berland's background at a brand, versus an agency, as an asset, because of her experience in directly owning and developing a company's image. Berland also apparently enjoys a favorable image in the tight-knit upper echelons of Silicon Valley. Her time at AmEx involved forging a number of successful partnerships with tech companies, most notably ride-sharing giant Uber -- and at Twitter itself.

Source: Twitter.

Berland will apparently report directly to Dorsey. Reports also indicate that Berland will be responsible for Twitter's communications and PR departments, with each function expected to have its own respective leader hired in short order.

Judging by the overall favorable media and social-media reactions to Berland's hiring, the move appears to be one of the first positive bits of news Twitter has enjoyed in some time. However, while it addresses a key deficiency within Twitter's core strategy, adding an effective CMO is only half the equation in reigniting Twitter's growth engine.

Only half the battle
As a number of analysts have noted, adding what appears to be a highly capable, tech-savvy marketing head into the C-suite addresses just one of Twitter's two largest problems: Twitter's lack of a brand identity. As research firm BTIG analyst Rich Greenfield noted in reaction to Berland's hiring, "Hiring an incredibly well-respected CMO to build Twitter's visibility can only be effective if she has the 'product' to work with."

The man has a point.

No matter how compelling Berland's work may be in creating and communicating a unique vision for Twitter, her work will fall on deaf ears unless Twitter's core product evolution also makes good on its promise. However, I still see a case for optimism regarding the company.

Dorsey has been a driving force in creating two huge tech products in Twitter and mobile-payment company Square. His chops as a product visionary make perhaps the best suited person to evolve Twitter's product from microblogging to whatever lies ahead.

Source: Twitter

What's more, Dorsey's early moves point to renewed product energy at Twitter. Though it was probably in development before his full-time return, Twitter's Moments feature provides a new, logical way to tap into Twitter's strength as the world's real-time hype machine. Similarly, the move to expand Twitter's ad network beyond registered users to reach anyone who sees an embedded Tweet anywhere online could also help address the company's current dearth of profits. I'm in favor of Twitter's rumored move to add extended tweets to the service, but its success depends on execution.

Of course, considering the continued C-suite defections and talent brain drain, Twitter could be a broken culture. And if that's the case, the company and stock are likely to be doomed. However, hiring Berland also signals that Twitter can still attract top talent. So while she won't be able to fix the company's serious problems singlehandedly, she should help quell some concerns amid the company's ongoing turnaround.

Andrew Tonner has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Twitter. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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