Twitter Appoints New CEO – Why The Next Step Might Be A Google Acquisition
Dick Costolo, Twitter's new CEO
If there’s anything to be said about this year concerning companies, I can safely say that there were plenty of changes in CEO, probably more than in the previous years. Perhaps the most significant change in CEOs occurred at HP, the leading IT company in the world. Ex-CEO Mark Hurd was forced to resign, only to later on find employment, as a co-president at Oracle. HP has recently decided who its new CEO will be and appointed Leo Apotheker, previously employed at German software company SAP. Nearly the same scenario took place at Nokia, the Finish handset manufacturer. The company replaced CEO Olli Pekka Kallasvuo with a former Microsoft exec, Stephen Elop.
The last company to change its CEO, for the second time in a two year period is Twitter, who has recently announced that it has appointed Dick Costolo to take the place of Evan Williams. First of all, I’ll have to mention that the previous CEO, Evan Williams, who announced his plans to step aside on Monday, was the second Twitter co-founder to reach this decision. Know as @ev on the micro-blogging site, Williams said that he intends to focus on product development while he continues to work for the company.
The new CEO, Dick Costolo is an early investor who was hired as chief operating officer less than a year ago. Amongst other things, Costolo has also founded Feedburner, a company that provides media distribution and audience engagement services for blogs and RSS feeds. Feedburner was acquired by Google in 2007. Since his employment, the company has re-located to larger offices in San Francisco to accommodate a larger number of people who are now working for Twitter. While Twitter started out with a few dozen people, the company has roughly 300 employees now. Because of some recent changes, Twitter is now making more money than it previously was. The site went through a complete redesign process and it now has more opportunities to sell ads and connect users to advertising companies. A new feature called Promoted Accounts which was released recently stands as further proof to back this theory up.
Twitter co-founders Evan Williams and Jack Dorsey
According to the Associated Press, in a joint interview which took place on Monday, Williams and Costolo said that they believed Twitter had managed to reach yet another critical juncture which required a different set of leadership skills. “I have always been more of a product guy and we are entering a new phase of the company where we require a CEO who is more into operations, sales, finance and operations,” Williams said. “And Dick is better at those things than I am.”
Williams became Twitter’s CEO in 2008 when the company’s board believed that he could do a better job at expanding the site than another co-founder, Jack Dorsey. Dorsey obviously contributed a lot to what Twitter represents today. He came up with the idea of limiting messages to 140 characters and he was responsible for the first ever posted tweet, in March 2006. Costolo’s appointment is thought to cause speculation regarding a possible initial public offering of stock from Twitter.
What Williams and Costolo have in common, despite their completely different personalities, is the fact that they’ve both sold services to Google. Williams sold Blogger, the popular blogging service that you may know and love today, to Google in 2003. Costolo, as mentioned before, sold FeedBurner to Google in 2007. This makes you wonder whether Twitter will ever have a similar fate. It might, but the only question that remains is, when will Google decide to buy Twitter? Most analysts believe that the search engine giant would benefit a lot from buying the micro-blogging site. Despite all of Google’s CEOs, former and current, declaring that they’re interested in maintaining Twitter’s independence, they all agree that Google or any other bidder might be able to come up with an offer that investors couldn’t refuse.
Some people argued that Google might not be interested in Twitter just yet because the micro-blogging site isn’t such a big source of revenue. But now, Twitter is becoming more powerful and drawing in more advertisers. Google could definitely afford to make such a purchase and angel investor Dave McClure believes that a $5 billion offer could convince Twitter’s investors quite fast. The first rumors regarding Google’s plans to buy Twitter surfaced about a year ago. At that point, the two companies were said to be negotiating the terms and several publications estimated that a potential deal would be worth $1 billion. Back then, the search engine giant’s CEO Eric Schmidt called Twitter a “poor man’s e-mail system” and said that the company would probably wait for prices to get better before attempting to buy anything. But we could also assume from his speech that Google has seriously thought about purchasing Twitter on multiple occasions.
Starting from this point on, I’m going to continue with my opinion on the matter. First off, Google has done pretty much everything it could do regarding online services except for social networking. Sure, Orkut, the company’s social network exists on the market, but it’s best known for people in a couple of countries. The rest of the world has probably never heard of it. Why is social networking becoming more important? It’s simple. People aren’t spending a lot of time searching for things or watching clips on YouTube (though that still happens a lot). They’re connecting to friends, sharing photos and information on social networks.
In fact, some people practically live on social networking sites and have more activities going on online than offline. Advertisers are obviously interested in this type of sites, possibly even more than in putting up real-live billboards nowadays. It’s logical, if you advertise something, you want to grab the attention of an extremely wide audience? Hmm, let’s see, would Facebook’s over 500 million users be enough for that? Most likely yes. Since Facebook keeps growing and is on its way to become the biggest site on the Internet, this will definitely affect Google, who might possibly lose some revenue from advertisers. To get into the social network business, Google will have to put a lot of time, resources and advertising into building its own site to compete with Facebook. Because of a long string of over 23 acquisitions of smaller companies, which are mostly tied to social networking in one way or another, this year alone, people started believing that the search engine giant will come up with a social network called Google Me. So far this remains unconfirmed. But one great way to breach the social network market would be to purchase Twitter, who is already out there, working perfectly.
At this point, Twitter has over 160 million users. Twitter services could be tied to Google’s already existent services. A lot of improvements could take place. On top of that, Tweets are already a part of the results you’re getting in Google’s Real-Time search. Thus Google somewhat redirects traffic towards Twitter, boosting the micro-blogging site’s user base. I’m not an expert on how Google could further implement tweets in other services but it’s not hard to figure out that it’s possible and brings a lot of advantages.
From the point of view of a user, and not of a writer, I’m really hoping that if anyone ever buys Twitter, it will be Google. Both companies have showed that they can offer plenty of innovative new services and products and it would be wonderful to see what the two teams of people could go together. In light of the new Twitter CEO appointment, it’s tempting to say that a Google might end up buying Twitter, but it’s not a sure thing right now. It would be nice of the search engine giant decided to end a year filled with acquisitions with one of the largest purchases they’ve ever recorded, just in time for holiday season, don’t you think?
