Twitter reshuffle a good sign for revenue

James Riley
Wednesday, 06 October 2010 09:30

IT Industry - Strategy

The top-level management changes at micro-blogging phenomena Twitter may mark the end of the beginning for the company. Certainly analysts agree it's the moment where the company is showing how serious it is about making money.

Twitter announced this week its chief executive officer Evan Williams is to step down - he will now focus on product strategy, the company said - to be replaced by the Twitter money man, chief operating officer Dick Costolo.

Costolo has run several other businesses, including Feedburner before it was acquired by Google (where subsequently Costolo worked for several years.) He is considered in the industry an entrepreneur and has pioneered new revenue streams in the sector.

Where a CEO is usually replaced after a revenue plunge or a company has lost its strategic direction, the Twitter case is very different, Ovum principal analyst Eden Zollar said.

Zollar says the changed leadership "is a sign of just how determined Twitter is to push through its transformation from start-up to 'grown up' business, underpinned by a sustainable business model."

"Twitter has around 165 million users, but knows big numbers alone," he said. With its first foray into an advertising model controlled by the company - called Promoted Tweets - it was critical that Twitter makes that that advertising proposition flourish.

"(Williams) is not disappearing but will instead focus on what he and the team thinks he is best placed to address: product development," Zollar said.

"Providing the transition goes smoothly this will be a positive re-organisation where Twitter's senior management are pro-actively directing their skills to where they best serve the company and by doing so are putting the monetisation ambitions of Twitter, rather than their own egos, first and foremost."

Costolo moved to Twitter just over a year ago, and has worked on its advertising services and licensing deals with the industry giants Google, Microsoft and Yahoo.