Jack Dorsey faces the struggle of his life

If deadly corona virus weren’t common around the world, more of us could talk about another life disorder as we know it: the possible end of Jack Dorsey’s recent term as CEO of Twitter.

Dorsey was a co-founder of Twitter, was his first CEO, and returned fourth in 2015. During that time, he was one of the more unconventional leaders in business. As reported in the history of Nick Bilton in the early years of the company, Incubate TwitterDorsey was initially pushed out of the job because he had spent too much time on yoga and fashion design classes.

When In 2015 he returned as CEOThis was also unlikely to replace Dick Costolo. The board originally announced that it would consider only one full-time employee to run the company. At that point, Dorsey had founded a second successful company, the payment company Square, and led it as CEO. But after a search, the Twitter board – whose chairman was Dorsey at the time – still chose him and he’s been running it ever since.

It was a rocky term. For most of Dorsey’s time as CEO, Twitter was unprofitable. It hasn’t offered much product innovation, nor has it found its way to significant user growth. Like other technology platforms, it was used productively by Russia in the 2016 elections. The company has made many, many promises of what it could ultimately do, starting with its intractable problem that users are bothering each other and then largely underserved.

Then there is the question of the share price – the metric for which all CEOs are ultimately held accountable. Twitter shares have fallen 6.2 percent since he returned. Bloomberg reported last weekwhile Facebooks have risen by 121 percent.

(Dorsey also plans to decamp somewhere in Africa sometime this year for an indefinite period. There’s a lot going on with this man!)

In short, it is not difficult to act against Jack Dorsey, and now someone has. The activist investor Elliott Management Corp. has acquired a stake of around 4 percent in Twitter and has now added four candidates to the company’s board of directors with the aim of replacing Dorsey as CEO.

In Axios, Dan Primack’s case argues:

– Dorsey can only devote part of his attention to Twitter because he also runs the payment company Square (in which he has a greater financial interest). And that is only aggravated by Dorsey’s plans spending much of 2020 in Africa to better understand the continent’s fintech revolution (i.e. something that is much more relevant to Square than to Twitter).

– Twitter at Dorsey saw constant executive sales and dropped the product innovation ball repeatedly (especially at Mothballing Vine, which was TikTok before TikTok).

What is Elliott Management Corp.? It is a hedge fund run by billionaire Paul Singer. Sheelah Kolhatkar profiled him by doing New Yorker in 2018, Kolhatkar described Singer as …

one of the most powerful and unyielding, Investors in the world. The seventy-three-year-old singer with a white beard and oval glasses is deeply involved in everything Elliott does. The company has many types of investments, but Singer is best known as an “activist” investor who uses his fund’s resources – about $ 35 billion – to buy shares in companies that he finds weak. Elliott then pressures the company to make changes to its business to improve the stock price. Elliott executives say that most of their investment campaigns are without significant conflicts, but a remarkable number appear to be in the drama. A signature Elliott tactic is the publication of a letter in which the C.E.O. of the target company is sharply criticized, which is often followed by the resignation of the manager or the sale of the company. One of Singer’s few unsuccessful campaigns to block a merger within Samsung eventually led to the impeachment and imprisonment of the South Korean president after Singer’s opponents were so desperate to fend off his attack that they allegedly started bribing government officials. From the outside, it may look like Elliott is causing the drama, but the company argues that it only identifies existing problems and checks the system.

Activist investing is controversial: critics believe that it can force companies to lay off workers and cut investment in new products in favor of programs that increase short-term profits, while proponents see this as a useful pressure source for CEOs to reduce and increase waste manage their businesses more effectively. The press compared Singer and similar investors to vultures, wolves and hyenas. Bloomberg has described Singer as “aggressive, persistent and controversial” and named him “the most feared investor in the world”. Singer’s efforts were consistently successful, with an average annual return of nearly fourteen percent, which made him and his employees extremely rich. The mere news that Elliott has invested in a company often leads to an increase in the share price, which brings Elliott even more prosperity. Singer has used his wealth in republican politics, where he was one of the top donors to the G.O.P. and has a strong influence on the party and its president. According to those who know Singer, in politics as in business, he strives to do everything to win.

To repeat it again: The most feared investor in the world is now targeting Jack Dorsey. What happens next?

Short term, Employees and allies have gathered around Dorsey, On Monday, internal pro-dorsey discussions sparked on Twitter itself, where a few dozen employees tweeted the hashtag #WeBackJack. Elon Musk, CEO of Tesla, who recently appeared on FaceTime at Twitter’s annual employee conference, also tweeted about his support and announced that Dorsey “has a good thing [heart emoji], “

In the long term, Matt Levine from Bloomberg speculates about it The move could lead more founders to look for two-class voting shares to isolate them from activist investors like singers. Mark Zuckerberg did this on Facebook and later Evan Spiegel on Snap. Levine notes that Snap is in a far worse financial position than Twitter – and has no consequences for investors because they have no real legal means – Levine writes:

Elliott’s exclusion of a CEO of a stock corporation is not a pretty sight. (A CEO dropped off from Elliott memorable that commented “When he started researching Elliott online, the experience was like ‘Google this thing on your arm and it says,’ You will die. ‘”) If you are a public investor and bought Snap in shares due to the IPO Experience could lead you to object to two-class stocks in future IPOs, but if you’re a tech founder and watch Elliott wage an ugly proxy fight to help Jack Dorsey for mortal sin, half a day in his Working to get rid of the company could experience that you insist on two-class stocks in your company. IPO is a bit bad and its founder is in Elliott’s cross hairs. Snap is worse and its founders are doing well because they had the foresight to prevent this. The whole point about two-class stocks is to protect tech founders from Elliott because with them you can follow your bliss in a visionary way in the long term

However, the most interesting question is the least answerable question, and that will happen in the medium term. That means: can Dorsey survive? Singer’s experience of previous CEOs suggests that the answer may well be no. The case against Twitter’s leadership in the past decade has been tough and damned, and the promise that everything will be better in the future won’t work as well with a hedge fund as it did on the podcast circuit,

At the same time, it is at least a little strange that Singer is taking his step now, if Twitter has become consistently profitable, has returned to user growth, and finally the pace of product development started to accelerate, It’s still easy to say that Twitter can and should be much bigger and better than it is – it just feels a little rude to take this case when the company finally does it, and to the surprise of many of us, who have reported about it for the past decade is starting to turn it around.

But business is not a beanbag, and “good enough” is clearly not a problem for Paul Singer. If nothing changes dramatically, Jack Dorsey seems to be in the struggle of his life.

Pushback

Yesterday I wrote in the newsletter: “Today, Facebook is the entry into technology for most people. In some parts of the world, Facebook is said to be the Internet itself. And it works on a much larger scale than Facebook ever did. “Many thanks to my mother for writing to ask if I meant that Facebook works on a larger scale than Microsoft ever did. In fact, I have. Thank you mum.

We also apologize to Drew Harwell and Erin Cox, whom we mistakenly identified as reporters for them New York Times, In fact, they are excellent reporters for that Washington Post,

The 2020 Election Guide

Fourteen states vote in the Super Tuesday area code. While you wait for the results, I invite you to look at them our package about what is at stake for Silicon Valley in the months leading up to the general election and beyond. Start with this essay from our editor-in-chief Nilay Patel why and how we report on the race, From there, you can view four “living guides” on key issues in the technology industry:

We hope you find these guides useful and bookmarked in the coming months. In the end we will update it if events justify it. Let us know what you think – and if you have an idea for another guide, please send it to me.

The relationship

Today in news that could affect public perception of the big tech platforms.

Upward trend: Pinterest limits the search results for the coronavirus outbreak to information from established health organizations,

Upward trend: Google Provides customers with free video conferencing tools to assist them with mandatory work-from-home orders related to the Corona virus outbreak,

outbreak

Big headlines:

A computer biologist argues that Washington State could experience an explosion in some cases, (Helen Branswell / STAT news)

Non-partisan negotiators on Capitol Hill are approaching a $ 7.5 billion emergency bill to fight the coronavirus, Legislation is expected to be announced on Tuesday and adopted later this week before moving to the Senate. (Erica Werner / The Washington Post)

On the conference front:

On the travel front:

Elsewhere in the outbreak:

Airbnb planned for the IPO in 2020, However, these plans could be put on hold if the travel market continues to struggle with the spread of the coronavirus. (Olivia Carville / Bloomberg)

Counterfeit medicines and coronavirus conspiracy theories flood Whatsapp, The app is encrypted, making it difficult to stop viral messages since even Facebook can’t always see what they’re saying. (Tony Romm / The Washington Post)

Govern

Congress is expected to introduce new laws on Wednesday that would force tech companies to take aggressive steps to stop child sexual exploitation online, or to risk losing their Section 230 legal protection, The Earn It Act is also widely seen as a way to prevent technology companies from using encryption on their messaging platforms. This bill is terrible. Tony Romm on The Washington Post Reports:

The industry is particularly concerned about the legislator’s recent political salvo, fearing that it will not be feasible and could pave the way for the Department of Justice and other law enforcement agencies to dig into their networks, devices, and services to assist in their investigations. This could undermine end-to-end encryption, a security technology that does it so that only the sender and recipient of a message can see its content.

On Tuesday, Facebook expressed early doubts about the bill before it was even published. The fate of encryption is critical to the companyGiven that the WhatsApp messaging service is secured in this way and Facebook wants to continue to provide encryption in its chat tools.

Venture capitalists and tech managers are in favor of moderate presidential candidates Mike Bloomberg and Pete Buttigieg (before he got out), You are increasingly worried about a Bernie Sanders win even though many of their employees advertise for him. (Nellie Bowles and Erin Griffith / The New York Times)

Mike Bloomberg spends much more money on promoting gun control than on its ability to strike Trump card in Texas, It’s a surprising step in a deep red state – but it also shows how candidates use microtargeting to share different messages with different voters on Facebook. (Jeremy B. Merrill / quartz)

The U.S. government has made an effort Tick ​​tack talk about political misinformation, The Chinese-owned app has become increasingly popular in the United States and has been used frequently to share political memes, although the company has tried not to become a platform for political talks. (Alfred Ng / CNET)

reddit has the reputation of a toxic rumor mill, But the website has become an unlikely home for passionate users who aim to cause disinformation while spreading. (Steven Melendez / Fast company)

Facebook remote networks of accounts dealing with coordinated spurious behavior, originating in India, Egypt, Russia, Iran, Myanmar and Vietnam, The news is part of the company’s first monthly report on coordinated spurious behavior.

The right media ecosystem differs from the rest of the mainstream press and is insular, says Harvard professor Yochai Benkler, This asymmetry will play an important role in 2020 – but the main drivers are mass media, companies and domestic actors, not Russians, Facebook, algorithms or bots. (Mathew Ingram / Galley by CJR)

TurboTax Parent company Intuitive just acquired Credit karma for $ 7.1 billion, The deal raises serious antitrust concerns, according to legal experts, since Credit Karma was a TurboTax competitor. Facebook is buying Instagram again, but will regulators notice? (Eric Newcomer / Bloomberg)

Industry

Facebook said it would support existing government-backed currencies in addition to those Libra Token when it releases its Calibra wallet later this year. These include the US dollar and the euro. The move is seen as a direct response to the strong regulatory pressures Facebook has faced since Libra’s announcement last year. Here is The information Alex Heath:

The external Libra Association, which is made up of companies that Facebook has wooed to run the project, intends to introduce a Libra token along with the collection of digital government-issued currencies, another person said with the plans is familiar. Facebook is expected to highlight the digital versions of existing government currencies in its own wallet.

Facebook has postponed the planned release of its digital wallet called Calibra to October this year, rather than June, as previously planned, the three said. The wallet release coincides with the introduction of digital currencies. The initial introduction of the wallet that Facebook wants to have available in WhatsApp and Messenger could be limited to certain countries based on the local currencies it ultimately supports. Facebook’s new strategy may face less resistance from financial regulators, who fear the social network’s impact on the direction of the Libra.

Pharmaceutical companies are getting braver about advertising Facebook, The practice is to uncover gaps in the way data can be used to provide consumer-related ads about your personal health. (Nitasha Tiku / The Washington Post)

Facebook has built a fleet of robots to monitor its data centers, The high-tech initiative could increase the company’s profits and revolutionize the data center industry – and potentially lead to job losses. (Rob Price / Business insider)

A breast cancer lawyer says she discovered a hole Facebooks Privacy settings that could compromise the health data of millions of people, She filed a complaint with the Federal Trade Commission, saying Facebook was required to protect membership lists for health groups and had not disclosed the alleged security vulnerability to users. The gap has now been closed. (Ryan Prior / CNN)

To make Messenger easier and faster, Facebook wrote the app from scratch, The new version is 30 MB in size, less than a quarter of its top size. It has also increased from 1.7 million lines of code to 360,000.

In a new study published in American Economic Review, deactivate Facebook The participants were shown to have 60 minutes, It also had a small but significant impact on improving their overall wellbeing. (Cal Newport)

Whatsapp finally gets a new dark mode for iOS and Android today, After months of beta testing on both mobile operating systems, WhatsApp dark mode is available to all users. (Tom Warren / The edge)

And finally …

Let’s use the prepper to end the day.

Out here Business insideris How to clean your smartphone of germs without damaging the screen.

And here, from The Verge, is how to make your own hand sanitizer,

Have a wonderful evening.

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