Elliott May Find Twitter Its Dara, But It Needs a Whole Lot More

(Bloomberg Opinion) -- Twitter Inc. deserves a full-time CEO.

That's the message from activist investor Elliott Management Corp., which has taken a stake of around 5% and has nominated members to the social-media company's board as part of a campaign to oust incumbent Jack Dorsey. In addition to running Twitter — which he co-founded — Dorsey is also CEO of online payments processor Square Inc. 

Getting rid of Dorsey may end up being the easy part.

Twitter's real challenge will be to not only find someone who wants the gig, but a person who has both the operational chops and the innovative thinking required to turn a pedestrian internet utility into a multi-faceted social-media operator that can lure both users and advertisers.

When I first heard of Elliott's move, in an article from Bloomberg News, the first name that came to mind was Facebook Inc. Chief Operating Officer Sheryl Sandberg. She's been at the world's largest social-media company for a dozen years and has both the operational ability and industry gravitas that Twitter needs right now. Her leadership of the “Lean In” movement would also help Twitter shed the tech-bro culture that typifies much of Silicon Valley. While I am sure that Elliott would love to have her lead the company, I doubt the feeling is mutual.

At the other extreme, Twitter could do with an Elon Musk-type — someone capable of coming up with innovative new ideas. After all, this is the guy who dreamed up a flame thrower on a whim, and then actually started selling it. But the world has enough Elon Musks, and he wouldn't exactly be a full-time CEO anyway.

What Twitter really needs is someone like Dara Khosrowshahi, a steady hand who commands respect but doesn't outshine the product he's pitching. While recognized and respected within business circles, the then-CEO of Expedia Group Inc. was little-known before the board of troubled ride-hailing startup Uber Technologies Inc. tapped him to lead it in a post-Travis Kalanick era. While Uber has yet to post a profit, and its shares are down since its May IPO, losses have narrowed and the stock has rebounded 30% since its November low.

But it's not enough for Elliott to agitate for change without making clear what Twitter should look like under new management. Saying that Twitter needs a full-time CEO is a statement too obvious to hold much meaning. 

Elliott seems to recognize what everyone else also already knows, which is that Twitter and its ubiquitous news feed haven't been monetized well enough. I discussed this last month when I wrote that half of its users are worthless. 

This isn't for lack of product innovation. Years ago, Twitter bought a company called Periscope before it had even launched its live-streaming video app. While still alive, Periscope has faded into irrelevance as it got eclipsed by offerings from Facebook and Alphabet Inc.'s YouTube, along with a slew of international rivals such as Momo, YY, LiveAF and BigoLive.

Then there's the most egregious fumble of all: Vine. Twitter introduced Vine in 2013 as an app for creating and publishing short videos of up to six seconds in length. It was a novel and fun product, attracting devoted fans and inspiring incredible creativity. But management failed to turn it into anything of value and pulled the plug four years later.

Today, the world's biggest startup makes the bulk of its revenue from Douyin and TikTok, short-form video apps that are popular around the world, including in the U.S. That company is ByteDance Ltd. and its valuation of $75 billion makes it three times that of Twitter's market cap.

So perhaps what Twitter needs isn't a leader with mere operational chops or innovative thinking, but one with a view for what the company can and should be. It needs someone with the kind of vision you can't get from six-month jaunts in Africa or silent meditation retreats in authoritarian states.

To contact the editor responsible for this story: Beth Williams at bewilliams@bloomberg.net

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

Tim Culpan is a Bloomberg Opinion columnist covering technology. He previously covered technology for Bloomberg News.

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