Twitter’s future is looking bleak

So long to COO Anthony Noto.
Image: leon neal/getty images

Yikes. 

Feelings of alarm spread via tweets Tuesday morning after news broke that Anthony Noto would be leaving his role as chief operating officer of Twitter and joining financial tech company SoFi as CEO. 

For Noto, the new gig is a lucrative opportunity and lines up with his skill set. The 49-year-old — who spent nearly a decade at Goldman Sachs, then served as the National Football League’s chief financial officer, and spent the last three and a half years at Twitter — can shape the direction of a young startup valued at billions and effectively disrupting the massive financial-services industry.

But for Twitter, the upcoming move is a major loss of an executive who inspired trust and respect among investors, advertisers, and media partners. While Twitter cofounder and second-time CEO Jack Dorsey remains at the top, insiders have instilled their confidence in Noto and have criticized Dorsey, in part for holding two CEO roles (Dorsey is also the CEO of Square). 

“Anthony Noto was widely seen as the adult in the room, someone with experience dealing with Wall Street and an eye towards financial discipline. Dorsey is not a dynamic leader, nor is he a pragmatic one, and it’s difficult to see how Twitter continues to build a story of improvement without Noto at the helm,” Jeff Reeves, analyst and executive editor at InvestorPlace.com, wrote in an email to Mashable. 

Now that Noto is leaving, confidence in Twitter’s future is waning. Twitter’s stock fell by as much as 3.9 percent Tuesday morning and continued trading down in the afternoon. 

The MVP

Since his hiring in July 2014, Noto has been a key player at Twitter, securing deals and retaining institutional knowledge and partner relationships while other parts of the business faced massive turnover. 

Noto’s “an operator, and those who have worked with him say he’s a get-shit-done kind of leader who doesn’t drag his feet or waver on decisions,” Recode’s Kurt Wagner wrote in December 2016. “Noto’s take-charge style was exactly what the troops needed,” Business Insider’s Julie Bort wrote in August 2017. 

Under former CEO Dick Costolo, Noto served as CFO and helped ensure revenue growth in a startup that recently went public and was facing the wrath of investors demanding more growth and eyeing competition from social media giant Facebook. 

When Costolo left a year later in July 2015 and ousted CEO Dorsey returned, Noto’s official title remained unchanged, but he led the charge in Twitter’s new push for live video. Noto’s connections and generous terms helped Twitter land the rights to 10 NFL Thursday Night football games, a high-profile deal that Facebook, Amazon, and YouTube were also battling over. 

Suddenly, Twitter was seen as a force that could beat the tech giants at something. Since that landmark deal, Twitter has secured dozens of original content deals from major media companies and professional sports leagues, and Noto has served as the face of the movement. 

The dealmaking isn’t over. As Noto told attendees of the Consumer Electronics Show earlier this month, Twitter is “what’s happening now” and “what’s happening next.” 

In December, Bloomberg launched a 24/7 news network, and yeah, it’s still running in 2018. 

The Next Play

But without Noto onboard, investors and industry experts are questioning Twitter’s future.

For Twitter, Noto’s departure is “an incremental negative,” Cowen & Co. senior equity research analyst John Blackledge wrote in a research note. “No other C-level executive has been with the company for more than two years.”

Dorsey’s other top dealmaker and “nice guy” Adam Bain left the company in 2016. Now the C-suite consists solely of Dorsey, Leslie Berland as chief marketing officer, and Ned Segal as CFO. Noto’s last day is March 1, and his responsibilities will be assumed by other member’s of Twitter’s leadership team, according to Twitter’s public filing. 

“A revolving door at the most senior level doesn’t sway people to sign on, it only makes the company look even riskier to investors and shares plunge,” said Ronn Torossian, founder and CEO of PR agency 5WPR. “Twitter needs to overcome stagnant user growth with a brand-new company identity, not just the medium of the president.”

The idea that President Trump is the biggest thing Twitter has going for it is a commonly held belief among many partners. But that’s not necessarily a bad thing if it helps Twitter focus on being a news platform. 

Twitter’s “in need of a new vision, or they’re going to end up being like Yahoo.”

Twitter “needs to continue to rethink their model. I don’t want to say pivot, but they missed the boat on video and imagery. It’s not a mass media play as it used to be — not for celebrity, not for high-quality video,” said Matt Britton, CEO of marketing tech company Crowdtap. 

While Google continues to solidify its reputation as the world’s destination for information and Facebook as a place for people to connect, Twitter has lost its original mission. Twitter was once a place for everyone to share their voice, Britton noted, but its crackdown on hate speech has tarnished that reputation. 

Twitter’s “in need of a new vision, or they’re going to end up being like Yahoo. Yahoo won early on by being a news aggregator, but other competitors took that away. All things to all people and nothing to nobody. Twitter needs to move quickly and find out what they’re doing,” Britton said. 

And that’s for the most part up to Dorsey, who splits his time between Twitter and his payments company Square. When asked how Dorsey is doing today, Square’s Twitter account replied with a reference to @jack’s AM tweet:

Image: twitter screenshot

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