Jack Dorsey trusted Elon Musk with Twitter. Will he come to regret it?
Even before Elon Musk brought the circus to Twitter’s boardroom, Jack Dorsey had a complicated legacy at the company he co-founded.
Dorsey undoubtedly helped build Twitter into a highly influential enterprise with $5 billion in annual revenue during his two stints as CEO. He tackled the unintended ills of social media with more alacrity and honesty than his peers. He left with a measure of grace, handing over the reins to a trusted confidant.
Yet there’s always been a feeling that Twitter failed to meet its full potential under Dorsey. The app never gained the worldwide audience of Facebook, Instagram, or TikTok, the result of missed opportunities in product development. Dorsey’s split attention—he served as CEO of Twitter and Square (now Block) simultaneously for six years—led to complaints that he never properly committed to shepherding the company’s evolution.
Now, the final chapter in Dorsey’s history with Twitter rests in the fickle hands of Musk, whose bizarre bid to buy the company has thrown it into utter chaos. If Musk irreparably damages Twitter, either by walking away from his $44 billion offer or destroying the foundation of the company after securing a deal, few will deserve more public scorn than Dorsey.
When Musk wanted to discuss the future of social media amid multiple frustrations with Twitter—content moderation policies, spam bots, reliance on corporate advertising—his first call to a company official went to Dorsey in late March, per the filing. (Dorsey still serves on Twitter’s board after resigning as CEO in November.)
In early April, on the same day that news broke of Musk joining Twitter’s board, the two friends spoke again. According to the filing, “Mr. Dorsey shared his personal view that Twitter would be better able to focus on execution as a private company.” The filing does not say whether Dorsey encouraged Musk to buy Twitter. At a minimum, though, the statement waters the seeds of acquisition.
Four days after that conversation, Musk notified Twitter officials that he planned to decline the board seat. Instead, he would launch a takeover bid.
In the five weeks since, Dorsey has lauded Musk, at one point calling him “the singular solution I trust” to maintaining Twitter as a public good. He has been mostly quiet, however, as Musk toys with Twitter’s board and denigrates the company’s top officials. (Dorsey is somewhat limited in his ability to comment publicly on the deal, owing to his position on the board.)
Dorsey’s support of Musk still could prove prescient. If Musk ultimately relents on his spam bot charade and closes the deal—perhaps after negotiating a lower price than his initial $54.20 per share offer—it’s not out of the question that Musk improves the platform. In which case, Dorsey deserves credit for his belief in Musk.
But if Musk backs away from the deal, Twitter will be left decimated.
Its stock price will immediately plummet, potentially falling to its lowest depths in five years. New CEO Parag Agrawal will be left with a dejected, depleted staff after he replaced two executives and, per Bloomberg, three other high-level leaders resigned in the past week. The coming months and years could be overshadowed by drawn-out litigation with Musk, who signed a merger agreement that, in theory, doesn’t allow him to easily worm his way out of the acquisition. (Twitter’s board told The New York Times on Tuesday that “we intend to close the transaction and enforce the merger agreement.”)
Under that nightmare scenario, there will be plenty of blame to go around. Twitter’s board will take flack for getting outfoxed by Musk. Federal regulators and legislators will draw criticism for failing to stop Musk’s flouting of securities rules. Musk himself will face heat for treating a multibillion-dollar enterprise as a plaything.
Dorsey, too, will deserve his more-than-fair share of condemnation. He has put his trust in Musk, an eminently unreliable figure. If his friend fails to repay that faith, Dorsey’s already mixed Twitter legacy becomes even harder to defend.
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A disastrous quarter. Chinese tech giant Tencent posted its worst three-month period since going public nearly two decades ago, illustrating the impact of President Xi Jinping’s assault on the industry and nationwide economic weakness, Reuters reported Wednesday. The entertainment and social media company recorded virtually no quarterly revenue growth and a 51% decline in year-over-year profit, largely due to a sharp slowdown in ad sales and deep cost-cutting measures. The Chinese government’s crackdown on tech companies took particular aim at growth in Tencent’s video game business, which was hit by an order freezing new game licenses for several months.
A COVID step back. Apple on Tuesday delayed implementation of a plan to start bringing employees back into offices for a third day each week, citing a recent rise in COVID-19 cases, Bloomberg reported. Apple staff are still required to spend two days at corporate offices, a mandate in place since April. Company officials did not specify when they might revisit the three-day-a-week rule, which was set to go into effect Monday.
The pink slips begin. Netflix announced layoffs Tuesday totaling 150 employees, or roughly 1% of all staff, the latest cost-cutting measure at the streaming service, Bloomberg reported. The job cuts follow a pledge by Netflix executives to trim spending amid the company’s first quarterly net subscriber decline in a decade. Netflix also laid off about 25 employees from its marketing department last month as part of a broader reorganization of the department.
Hangry in NYC. A GrubHub promotion caused a measure of chaos Tuesday across New York City, leaving restaurateurs overwhelmed with undeliverable orders and customers frustrated during the lunch hour. Big Apple users flooded the food delivery app with thousands of orders per minute between 11 a.m. and 2 p.m., a window during which GrubHub offered a $15 discount. However, some restaurant managers complained they weren’t told in advance about the promotion and that there weren’t enough employees to fulfill orders or GrubHub drivers to deliver them.
FOOD FOR THOUGHT
Making Tinder less gross. The new CEO of Match Group’s Tinder app had a generally positive personal experience with the dating site, having met her husband on it six years ago. But Renate Nyborg knows that’s not the case for many women, who have been inundated with unwelcome and graphic messages. As Fortune’s Emma Hinchliffe reported Wednesday, the first-year Tinder chief is prioritizing a better experience for women and LGBTQ users, aiming to repair the app’s reputation amid competition from more female-friendly rivals like Bumble. The focus has already produced several new features in development, including an option to block personal contacts from seeing a profile.
From the article:
In Nyborg, Match Group hopes to have finally found, well, a match. The new CEO is working to improve the product for those who've felt excluded in the past and is tapping her global experience to help the brand expand internationally; she sees particular promise in regions like Asia, where online dating has penetrated less of the market.
For Nyborg, Tinder’s future goes beyond dating. She envisions the app’s next decade (century, even, if she’s feeling ambitious) as a globally minded “place to foster meaningful human connections,” be they short term or long term, romantic or platonic, digital or offline.
IN CASE YOU MISSED IT
The private sector steps in to protect online health privacy, but critics say it can’t be trusted, by Darius Tahir and Kaiser Health News
BEFORE YOU GO
Fortune favors the silent. Celebrity endorsers couldn’t shut up about crypto. But now that the shine has worn off, what do they have to say for themselves? Barely anything, at least to The New York Times. The Gray Lady tried to interview several high-profile crypto champions about their reaction to the recent decline in values and $40 billion collapse of a popular coin. Predictably enough, crickets. Matt Damon wasn’t brave enough to comment. LeBron James, currently watching the NBA playoffs from home, couldn’t be bothered to talk. Naomi Osaka must be in a country without a wireless network, because a rep said the tennis star “sadly is overseas and not available.” And the one person who did respond, the director of an FTX Super Bowl ad featuring comedian Larry David, should’ve just kept quiet. His comically bad response, in part: “We have no idea how cryptocurrency works [even after having it explained to us repeatedly], don’t own it, and don’t follow its market. We just set out to make a funny commercial!” Hilarious.
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