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Summary:

Twitter co-founder Jack Dorsey is taking on an expanded role at the company, in what seems to be an attempt to show that Twitter is putting more emphasis back on the product after some recent mis-steps. Can Dorsey help put things back on the right track?

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Rumors have been circulating for some time now that Twitter co-founder Jack Dorsey might be taking on more of a role at the company, and Monday, Dorsey confirmed he is going to head up product development at Twitter as executive chairman, while continuing in his existing role as CEO of mobile-payment startup Square. The move to give Dorsey more authority appears to be an attempt by Twitter to show it’s putting more emphasis back on the product, rather than just on making money — something the social network has been catching a lot of flak about lately. But can Dorsey help steer the company back onto the right track?

The most recent dust-up for Twitter was the response to new rules around using its API for pulling data into third-party applications. In contrast to the more open approach the company took in its early years, where developers were encouraged to create apps and services that leveraged the growing social network, the new rules seemed to clamp down on many aspects of Twitter’s ecosystem. Combined with some heavy-handed responses to Twitter app providers such as UberMedia, this struck many as showing a different — and much less attractive — side of the company.

There was also some sharp criticism from users about a recent update to Twitter’s official mobile clients, which introduced a new feature called the Quick Bar (quickly dubbed the “dick bar” after CEO Dick Costolo) — one that seemed designed primarily to push the network’s new advertising-related services. Some users said Twitter was shutting down alternatives at the same time its own apps were becoming less useful.

Angel investor and Hunch co-founder Chris Dixon said in an email that he hopes Dorsey’s return to Twitter means good things for the company:

I just think the history of tech companies shows again and again that having a great product-focused founder at the helm has always been the best thing for the company and for its customers/users. So I think it’s great to see @jack back at Twitter. As an active Twitter user who loves the product I’m really looking forward to seeing what he does next.

Twitter founder Jack Dorsey

Dorsey’s return to prominence at Twitter is a reversal of fortune in many ways for the co-founder and his former boss Evan Williams. Dorsey started Twitter with several colleagues in 2006 as an experimental side project within Odeo, a media startup that was created by Williams after he sold the Blogger platform to Google. It soon became obvious that Twitter was more interesting than what Odeo was originally doing, and Williams shifted his attention to the new service — effectively forcing Dorsey out as CEO, something Dorsey compared to “being punched in the stomach” in a recent profile for Vanity Fair magazine.

Last year, Williams stepped down as CEO to devote more time to Twitter’s product development, and was replaced by former Feedburner chief executive Costolo, at which point the network started focusing a lot more on business opportunities and a lot less on developer relationships. According to a statement from Twitter today, Williams is no longer involved in day-to-day duties at the company, but continues to “have a close relationship providing strategic advice” and remains a board member. One report says the former CEO is hard at work on a new startup.

The big question for Twitter, and for Dorsey, is whether the network can push forward with its attempts to control its ecosystem and find new sources of monetization, while still maintaining the strengths that made Twitter so appealing in the first place. That’s a tough assignment for someone who already has a full-time CEO job at a different company, and the stakes for Twitter continue to rise along with its market valuation.

Post and thumbnail photos courtesy of Flickr users Rosauro Ochoa and David Shankbone

  1. Twitter does not have a product problem, twitter has a valuation problem.

    They’ve taken so much money at such high valuations that $100MM a year in revenue is a failure. Monetizing is not enough, they need to monetize in a huge way. Getting twitter profitable is trivial (they probably already are). Getting twitter caught up to its valuation is really hard.

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    1. Yes, that’s a good point Eriks — the valuation puts a lot of pressure on the company to come up with some big revenue, or at least plans on how to get there.

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      1. The problem is that the valuation is predicated on revenue being directly proportional to audience size. What if revenue is proportional to the number of very active tweeters? Roughly 50% of tweets consumed are generated by just 20K elite users, you can get money from those 20K users, monetizing the other 200 million users is much harder.

        Getting to revenue that supports a $5-10B valuation is going to be hard to do without monetizing the 200 million.

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  2. It’s obvious that Dorsey will not be able to wear two hats at the same time. Square or Twitter? That’s the question.

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    1. Why is that obvious?

      His first priority is Square, and it sounds like he’s spending 1-2 days a week at Twitter.

      Creatives love splitting time between two projects. It’s a great way to recharge and bring new thinking back to the table for both of them.

      Jack has a strong COO at Square in Keith Rabois. He can totally do both jobs.

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      1. There is a precedent — Steve Jobs effectively did this with Apple and Pixar for years, although obviously not everyone is Steve Jobs :-)

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      2. I understand your point Aaron and to Matthew’s one, I had Steve Jobs in mind when I posted my comment. But Steve Jobs has NEVER been a “micro-manager” at Pixar the way he was at NeXT and is at Apple. So even Steve Jobs was not equally involved. So for this to work, Keith Rabois will need to be better than great just like John Lasseter has been for Pixar as their Chief Creative Officer. Another precedent is Carlos Ghosn who’s running 2 multinational automakers: The japanese Nissan and the French Renault.

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  3. It was dubbed the “dick bar” because people hate it. Nice try though.

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    1. Some people used the term with that in mind, but others seemed to enjoy the fact that it could also refer to Dick Costolo.

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      1. The key word being “could” – That reference came later as Sarah pointed out.

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  4. What stood out for me from earlier is that people even with “no incentive” given still organize themselves with middle men. If twitter is a distribution platform I would create products based on organizational features and monetize around that too. Instead of in your face ads, that’s not organization that’s annoying.

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  5. Does anyone know what Ev Williams thinks about this whole idea? Is this a reason he “is no longer involved in day-to-day duties at the company”?
    Well, I hope Jack Dorsey helps Twitter find its everlasting mojo.

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