tv Bloomberg Markets Bloomberg June 11, 2015 5:30pm-6:01pm EDT
emily: jack dorsey takes his place as interim chief executive. welcome to a special breaking his edition of "bloomberg west" from san francisco. ♪ breaking news, a big shakeup at twitter, just in the last hour, dick costolo is stepping down as ceo. cofounder jack dorsey stepping in. the stock surging on this news. investors have been calling for
headllo loss -- costolo's for quite some time. sarah frier is with us. ceo, former cfo of yahoo! -- we are digesting this news. what is your reaction? guest: oh, my god. i was an investor in the previous company which became twitter. emily: that is the company that evan founded. founded the company and evan reluctantly became the ceo and when it became twitter, evan was the ceo and then check became the ceo and then evan reluctantly became the ceo. it has been profiled in a couple books. this has been the company of rotating ceos. thenot surprised, based on exits of vps before, there is a joke known as the four-envelope
joke, but based on the people was noe exited, there other choice to go about to find a new ceo. emily: is anyone else surprised it is not ed? we should not be surprised by is that it is the founder. the founder having recently had to get involved in dispensing twitter over the past year, the founder is evan jack, they went andugh tee time -- tea time said, listen to jack, we believe in him. they have been trying to instill this in dick, but still the , and theykeep coming have actually been talking to recruits and saying no, it's ok, it is safe to work for twitter. maybe they thought we should handle this on our own after a wild, and they say this is dick's decision. is it dick's decision if they
are bringing in someone interim? costolo spoke with dick a few months ago and i asked him on "studio 1.0," and i asked him repeatedly if he felt he had success -- support from the board. listen to what he had to say about being a leader. dick: the challenge we have is the distance between awareness of twitter and engagement on twitter. that causes people to say, well i don't get why i would use it, so i don't get what it's for. i deeply feel that the platform to connect best way in real-time to what is happening in your world. emily: twitter is the best way to connect to your world? dick: things like live, in the moment, this is an amazing thing i'm watching right now, live broadcasting, live video, are going to be the future of the platform. that is the future of the platform. emily: looking at twitter from
the outside as someone who was in the c-suites of yahoo!, what is your take on this? guest: it's interesting that i happen to be here today comments total coincidence. you talk about the rotating that, i was rotating ceo yahoo!. i think we had five ceo's in the space of a year. these transitions, these dislocations take everybody by surprise. there can be public comments leading up to this that are completely hundred and three -- contradictory to what ends up happening. they are tricky things on the inside, but the really important part is now the communication starts. you have got to reassure investors, reassure employees most of all. decision,it is dick's why not go out and find somebody? is it really his decision? guest: i have no idea. what companies try to do is work
on these things. you announce something definitive at the same time someone is leaving. but i have no idea. emily: jack dorsey is running another multibillion-dollar company called square. he has another job. he has been very involved on the board. but they don't say what they are doing in terms of looking for a new ceo. what do you make of that? george: they will have to declare that. to me the fact they are not they are means considering jack as the ceo or someone else within the company that they don't want to name. they are not willing to name who the search provider is right now. emily: who do you think should be ceo of twitter? george: usually the best companies are the companies that preserve the founders. the founders carried the spirit of the cup in he. once you lose the founders of the uppity, you lose the spiritual backbone of the company. -- company, you lose the
spiritual backbone of the company. emily: there has been a clear divide between evan williams' vision of the future, and jack dorsey. george: and some of the original founders who weren't even in the company after it became twitter. is a founder really the right person, one of the three or four? i think a founder would be terrific because they have that spiritual leadership, but someone has to step up and unite it. what about the idea of twitter selling to google or microsoft? you could sell it to someone, but the question is how they will integrated. -- integrate it. in terms of integrating tweets into search is a great deal, but google is useless in terms of having consumer products. they would have to keep it as a separate business. i do not think they will improve twitter on their own. to take a listen
to another comment from dick costolo from our interview talking about the pressure, the insane pressure he is under at -- and has been as ceo. dick: anyone who tells you, a ceo of a company with a number of investors, private or public, that they don't feel any pressure, is lying to you. of course you do. >> in terms of job security? dick: no. the board and i are aligned. the pressure is, you have an entire company of people that are looking to you to lead them, and you want to be successful and you want to rally everyone together and articulate the motivation of why you have to be successful, and show them that those efforts are paying off. that is where the pressure comes from. frier had to step off the set to cover the story for bloomberg news straight what you make of those comments there, tim? being in that position of under pressure?
tim: you get it from all angles. the employees know what is going on with the stock price. if there is a divide amongst the original founders and potentially the management team, there could be different factions who are voting effectively for one direction or the other. you've obviously got the investor angle, which is very powerful because these days they have so many different forms and the press has so many different forms and ways of getting the opinion across. it is like bombardment. emily: george, do you think twitter can get beyond the factions, beyond the drama, pass the turnover? is right,think dick great companies are led by someone who is a visionary and a product leader. employees usually push back and basically have a mutiny because they say, why am i staying here with ace -- with a depressed stock price if i don't hear about great products? a great ceo, so
uniting this quote unquote factions is about them listening to someone say, we are going to this great place, and you should come along. if they don't hear that, they start thinking about exiting. that is were twitter is that. we are going to continue this conversation after a quick break talking about this dramatic shakeup at twitter. the box ceo aaron leavy will be coming up later in the show. ♪
stepping down as ceo, cofounder jack dorsey stepping in as interim ceo. is with us.ry we also have aaron levie with us and tim morris, former cfo and interim ceo at yahoo!. are a big twitter user. you've always got some thoughtful things to say about the industry. what you think? -- what do you think? for anybody watching, i came on the show to talk about our earnings and this happened jerod i don't know enough to add much value. came to ack and jack conclusion on what they wanted to do. this is probably more of a story about wall street possibility to think long-term about high-growth technology companies than it is about anything around twitter's potential.
i don't know enough to really kind of comment on that. emily: you do know about the twitter product as a user. do you feel that as a service, twitter is living up to its potential? aaron: i don't think any services living up to its potential. there's always room for building new capabilities, new acquisitions, opening up new parts of your platform. i saw some of the things in chris's notes. some of the things did not resonate. that's the case with every product. we have roommates -- roadmaps of box let go out for the next 10 years. until we accomplish those, we are not living up to our own potential. as a twitter user, i'm quite happy with the service. emily: you mentioned an early twitter investor. i interviewed him for an episode of "studio 1.0" that will air tonight. take a listen to what chris stock a had to say about what
chris had to say about twitter. chris: i talked to a lot of people at the company. it was a well-received post. at points wall street in the direction of this is how you should be evaluating a company. you should not be headhunting a ceo. you should be focusing on these things. hely: one of the things that was very clear on is he wants twitter to be easier to use. one billion people have come to twitter and they have not stuck around. does he have points here? guest: he definitely has a valid point. emily: he's calling for some dramatic shakeups in the product , focus more on live, live video to make it easier to see those nba tweets from the players during the game. guest: i have agreed with almost everything they chris wrote.
there has been some product experimentation which is pretty cool. but i think the basic core and hasce is limited not gotten significantly better. there has been pretty much a constant rotation of vp of product, which basically has told me that there isn't a good vision around product. guest: if you keep turning out the management that way, you never get traction on anyone roadmap great -- roadmap. those are any of companies likely -- do you see a deal happening? alibaba is a wildcard. the likely one is facebook. i view facebook as a publishing company. they constantly by new channels. instagram is a channel. i think twitter will be a new channel for them.
they can move users across these different channels, capture them across different metal states, -- mental states, ages. emily: as a twitter user and full understanding you came on here to talk about box earnings, but as someone who is thoughtful about the industry, what do you think of a company like a facebook or a google buying twitter? is that something you would like to see? aaron: if you're any one of those companies, you would want twitter. if you are twitter, there would be way too much potential to stay independent. ceo aaron levie. we will either have a conversation about box another time. i do appreciate you playing ball here. joining us on the phone now we have anthony did clemente from analyst onop-rated
twitter. he covers internet and media companies. the wall street view on this. obviously the stock is looking pretty good. anthony: just on the stock movement after the close, as part of the announcement, the company reaffirmed their full-year guidance. that is part of the reaction. there are a number of investors who like the previous callers inc. the twitter can overhaul its user interface to improve it to make it more engaging, to rejuvenate growth in users, to amp the monetization. there is a view that there is time for a fresh change in leadership. we will see what the company says on its conference call in half an hour and see how the stock trades tomorrow morning. it is such a volatile leadership culture at twitter, even going back to the early days, and if anyone of your listeners has
read "hatching twitter," you can take away from that book that you have a history of change in terms of the leadership, and for me, i contrast that with something like facebook, which admittedly is controlled and closely held by mark, but you have a very stable leadership and a very strong and will clarify vision for the future of the company. whether orto be seen not these management changes will have more of a detrimental impact on twitter overtime than a positive one. emily: i have read every word of that book. there is so much drama. is it really like that on the inside at twitter? is it a soap opera? my first was for experiences. there was always volatility in
the company, volatility between the players in the company. but i don't see the maliciousness that nick ascribed to the players. 0 you don't -- emily: you don't think jack dorsey was gunning to come back as ceo? george: i don't think there was the evilness that nick pointed out. there was passive aggressive behavior, but it was a bunch of people who did not communicate well together, so they found a method to communicate, which was an indirect method, which is also twitter. they created a product which is identical to their method of communication, which is indirect. emily: from your experience at yahoo!, how difficult is it going to be to change the culture from the inside out? guest: enormously difficult if you choose an internal candidate and if you choose an external candidates.
communication is the key, and just keep at it, but you need to has a link to say as well. they have to first decide what they want to be in the messaging can flow. a change in any culture is tough, and such a high profile twitter and yahoo! was and is, multiply it times 100,000. emily: tim morris, former interim ceo of yahoo!. george zachary, early twitter investor. anthony did clemente. we will continue this conversation after the break. ♪
an early investor in twitter. we also have the former yahoo! cfo tim orris, former yahoo! interim ceo, and joining us is crawford del pratt, chief research officer for idc. we have been talking about this hour.he last a lot of turn out as to who can be the ceo of twitter. who can do this job better than stolo,stello -- dick co considering jack dorsey has another job? crawford: i don't have an individual in mind, but i do think when you start looking at what you want to do to replace this job, i believe it needs to be someone who comes from media. the media business has learned a tremendous amount about ease-of-use, engaging users. that is a big angle of what twitter needs to accomplish here. i would think as media has evolved, that is where they are going to look when you start seeing the next chapter for this company. there's a lot of folks
out there they could be talking to, but is not necessarily from a third platform tech company. this is really about a company that understands as much about media as they do tech. emily: i've heard kevin sister and's name thrown out there. there are people within the company. guest: i think it will be someone from facebook who knows how to grow. emily: like sheryl sandberg? guest: probably not sheryl. emily: do you see anyone in particular? guest: i do not think it will be someone from traditional media. my guess is a will come from someone on the product side of who basically sees that facebook is a limited platform, limited in its focus on person-to-person, groups were people know each other. tim, what do you think? tim: i don't have a name either.
i would say the experience we went through at yahoo!, there are a lot of people who end up emerging on these lists that you would not think of at first, people who are either assumed to be well entrenched in their current companies are just off the radar screen, and some of them can be great candidates. emily: do we think it will be jack dorsey? guest: they could be, but jack has to save square. emily: square is running into its own challenges, right? guest: they're are people who run two companies at a same time. emily: running one company is a difficult and challenging job. running two seems almost impossible. guest: yes, there's a very short list. guest: especially if both companies have issues to take care of immediately. emily: should it be jack? crawford: i don't think so. i think the first chapter of twitter is closed. i think the next chapter was dick's chapter.
the next chapter should be someone who involves the product. emily: evan williams? crawford: again, i think this product needs to evolve, needs to be taken to a new place. it needs to attract and engage new kinds of users. emily: crawford del prete of idc. the newly appointed interim ceo of yahoo! joining us. on theuitous to have you show today. thank you all for joining us. this is a story we will continue to follow. dick costolo resigning as ceo of twitter. jack dorsey stepping in as interim ceo. jack dorsey the founder and also ceo of another multibillion-dollar company called square. thanks for joining us today. tomorrow we will talk gaming with the e.a. founder, trip hawkins. ♪