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Twitter Co-Founder Dorsey Coming Back as CEO?

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After three months, Twitter, Inc .'s TWTR search for a permanent CEO seems to be over. Media reports indicate that co-founder Jack Dorsey, who is currently serving as the interim CEO, will likely be back at the helm for the second time. The announcement is expected to come in the next few days. These reports sent shares up 5.3% yesterday.

Dorsey's name has been doing the rounds ever since the company started its search for a full time CEO after Dick Costolo stepped down on Jul 1. However, given the fact that Dorsey is the CEO of Square, a mobile payments startup that he founded, he is unlikely to do Twitter much favor as the company battles its toughest time since its inception. Moreover, Square will also be facing stiff competition from other payment companies and as it gears up to go public it will need tremendous attention.

However, sources claim that Dorsey is expected to pull off a Steve Jobs, managing two companies at the same time. Jobs served as the CEO of Apple Inc. AAPL and animation studio Pixar until it was sold off to The Walt Disney Company DIS in 2006. Currently, Elon Musk manages Tesla Motors, Inc. TSLA and Space X.

Many analysts view Dorsey as the logical choice as "founders sometimes bring the internal legitimacy needed to alter a company's course, by virtue of having conceived it".

Moreover, as the interim CEO, Dorsey has been very vocal about the future of Twitter. He himself has criticised some of the product changes and has admitted that Twitter needs to go mainstream. He has been trying to bring big and sustainable changes to the product, which in turn will appeal to the masses and expand its user base.

Twitter is launching a news curation feature called project Lighting. It is also launching a massive marketing campaign to help people understand the product. Moreover, Twitter is supposedly mulling the idea of increasing its signature 140 character limit enabling people to post longer tweets.

Currently, Twitter has a user base of 316 million, not anywhere close to rival Facebook's over 1.5 billion user base.

Jack Dorsey along with Evan Williams, Noah Glass and Biz stone founded the micro blogging site in 2006. Dorsey became the CEO in 2007 but was ousted the following year as his leadership was branded as subpar by fellow founder Williams. However, Dorsey remained on board at Twitter. In subsequent years, Dorsey founded Square, mended his image and slowly moved up Twitter's corporate ranks.

Dorsey has a huge task in front of him if he becomes the CEO. Twitter's inability to make profits, a sluggish user growth rate and the lack of clarity regarding a permanent CEO to lead the company has widely reflected on its stock price.

Twitter's stock has lost 26.4% so far in the year and is trading just a notch above its IPO price of $26. Moreover, it also suffered the ignominy of trading below its IPO price on some trading days this year.

It remains to be seen how Dorsey would execute his double duties as CEO of Twitter and Square when both the companies are at a crucial juncture.

Twitter at present is a Zacks Rank #3 (Hold) stock.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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