360° Coverage : Twitter's Valley Of Thrones

Twitter's Valley Of Thrones

Jun 12 2014, 2:58pm CDT | by

Things are almost never what they seem when there are management changes at companies.

Earlier this week, David Marcus left his leadership job at PayPal to become a VP at Facebook.  Was it because – as was the dominant narrative in the press – he was attracted to a better job at a more successful company?  Or was it because Marcus’ boss, John Donahoe, got tired of PayPal’s performance and told Marcus he was fired but could save face by taking a job elsewhere and saying he was resigning?  Unless we’re inside the company, we will probably never know the answer.

We can speculate of course but we will never know.

It’s the same with what really happened with Scott Forstall and Tim Cook at Apple.

And it’s also the same with Twitter ex-COO Ali Rowghani who either quit this morning or was forced out.

If you thought the Game of Thrones was a great fictional tale which doesn’t happen in real life, the last 24 hours at Twitter show you otherwise.

Last evening, a tantalizing post from Kara Swisher at Re/Code came out discussing how Twitter was mulling some management changes including Rowghani thanks to the recent poor growth and engagement of its users which has caused Wall Street to gut the value of the stock since January (by about half).

You cannot read the Swisher post without coming away from it scratching your head about what a dysfunctional organization Twitter must be today.  I still love the Twitter service and will continue to be an active user.  And it appears that the company is doing a bang up job of making money from it as it continues to push ads in between our various comments and pictures of the ham sandwich we ate for lunch.

But Twitter’s not attracting new users and its engagement has been dropping off.  It’s been this way for about a year now.

It didn’t seem to matter in the run-up to the Twitter IPO – even though all the stats in the S1 pointed to it then.  Investors still wanted in to the deal because of the potential upside.

And it didn’t seem to matter when Twitter’s stock performed well on its first day or two months later when the stock traded up to $74 a share.

But since January, the stock has dropped like a stone and – as seen in the Re/Code story last night – the back-biting and hurt feelings inside the company have now spilled outside the company.

People apparently didn’t like that Rowghani – or someone else – referred to him as “Mr. Fix-It” in a Wall Street Journal article.  Folks at the quaintly titled weekly all-hands meeting, “#TeaTime,” complained that Rowghani sold some of his stock in May.  And I read today that people didn’t like Rowghani because he was a finance guy promoted to oversee product.

I won’t defend Rowghani since I don’t know him and don’t work inside the company.  However, the fact that this kind of complaining was going on to the point where it’s leaking out to the press is obviously a sign that there is something deeply wrong inside the company.  I’ve followed Yahoo closely for a long time and this last 24 hours has reminded me of the days when Jerry Yang was in charge and all kinds of gossip was spilling out into the press.

So, I have three conclusions about this mess.

1. People are as ruthless in real-life as they are in the Game of Thrones – it’s just that they don’t use swords.

There was a funny – and ironic – tweet that CEO Dick Costolo (a former stand-up comic) sent out 5 years ago before his first day on the job at Twitter reporting to Ev Williams as COO:

null

In Shakespearean plays, it’s often the fool who ends up speaking the truth about a particular situation.

Don’t forget that Cersai Lannister said this in the Game of Thrones:

Dick Costolo is still winning the game.  Ali Rowghani is no longer playing the game.  Maybe Rowghani’s departure has nothing to do with Costolo.  It’s possible but I think unlikely.  He would have to sign off on it so at the very least he’s a party to it.

2. Even if everything you have read about Rowghani being a bad fit or bad promotion is true, there’s still blood on the hands of Costolo from all this.  

Costolo ultimately hired Rowghani.  Costolo promoted him to COO. Costolo is the final guy charged by the board to grow users and engagement.  If one of Costolo’s direct reports fails to deliver on something, there is a final responsibility at the feet of Dick.

Whether Rowghani’s gone or not, Twitter still faces the challenge of increasing its users and engagement unless they of course turn their back on this strategy altogether and relegate themselves to a niche strategy.  A niche strategy would be like the Starks saying they only wanted to rule the North instead of the entire Seven Kingdoms in Game of Thrones.  It’s perfectly legitimate (as I’ve argued here).

The problem is that they’ve just IPO’ed, telling Wall Street that they will rule all the Seven Kingdoms.  And Wall Street gave them a lot of money to execute that strategy.  Twitter management can’t and won’t turn back now.

Rowghani’s departure today buys Costolo some time but Dick still probably only has until the end of the year to show some real meaningful progress.

3. Twitter’s growth and engagement problem won’t be easily fixed.  

The problem which sunk Rowghani and may sink Costolo isn’t an easy one to solve.  We can put anyone’s head on a spike out front of the castle and the fundamental problem is not going to change.

If Twitter increasingly Facebook-ifies itself, it risks losing its core users.  If it stays with the status quo that its core users love, grandmas won’t onboard.

Don’t let the bouncy balls, good cafeteria food, and pets sleeping between the cubicles fool you, Silicon Valley is just as ruthless as any Game of Thrones episode./>/>

[Long YHOO]

 
 

Don't miss ...

 

<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

blog comments powered by Disqus

Latest stories

Man with 'disconnected' brain, alive and kicking at 88!
New York, Sep 1 (IANS) This may sound and read unbelievable but there is an elderly man whose brain has no neural fibre connection between his two hemispheres!
 
 
Women at greater stroke risk from resistant hyper-tension
London, Sep 1 (IANS) The condition known as Resistant Hyper-tension increases stroke risk by 35 percent in women and 20 percent in elderly patients, according to new research.
 
 
World's first battery-less pacemaker in the works
London, Sep 1 (IANS) In a revolutionary breakthrough for heart patients, scientists have come up with a way to power a cardiac pacemaker with an alternative energy source - the heart motion.
 
 
New blood test to reliably detect TB in kids
London, Sep 1 (IANS) About one million children per year develop tuberculosis (TB) worldwide, but unfortunately detecting TB in children has been a challenge as the symptoms are often non-specific and similar to those of common paediatric illnesses, including pneumonia and malnutrition.
 
 
 

Latest from the Network

'Ukrainian conflict has escalated into war'
Kiev, Sep 1 (IANS) Ukrainian Defence Minister Valeriy Geletey Monday said the conflict in eastern Ukraine between government troops and pro-independence insurgents has escalated into a "war". "A great war came at our...
Read more on Politics Balla
 
IS slogan found on school walls in Saudi Arabia
Riyadh, Sep 1 (IANS) Slogans praising Sunni militant group Islamic State (IS) were found on the walls of some schools in the Saudi Arabia capital following Saudi King Abdullah bin Abdulaziz's call for coordinated...
Read more on Politics Balla
 
Japan to aid connectivity upgrade in northeast India
Tokyo, Sep 1 (IANS) India and Japan Monday decided to strengthen cooperation for improving connectivity and socio-economic development in northeastern states of India. According to an Indian government release issued...
Read more on Politics Balla
 
Words cannot describe Abe's hospitality, says Modi
Tokyo, Sep 1 (IANS) Prime Minister Narendra Modi Monday said he could not describe in words the hospitality he received in Japan, saying it was an indication of Japanese Prime Minister Shinzo Abe's special affection...
Read more on Politics Balla
 
PTI president says political crisis in Pakistan scripted (Roundup)
Islamabad, Sep 1 (IANS) In a clear sign of a revolt brewing within, Pakistan Tehreek-e-Insaf (PTI) president Javed Hashmi Monday claimed that the ongoing political crisis in the country was scripted amidst more clashes...
Read more on Politics Balla
 
Three Ebola cases recorded in Nigeria oil hub
Abuja, Sep 1 (IANS) At least three cases of Ebola virus disease (EVD) have been recorded in Nigeria's oil hub of Port Harcourt, where a fatality was confirmed last week, the country's Minister of Health Onyebuchi...
Read more on Business Balla
 
Blake Shelton and Miranda Lambert reject $1m Vegas offer
Blake Shelton and Miranda Lambert rejected a $1 million deal to perform three shows in Las Vegas. The country couple turned down the offer and tried to negotiate a $1.25 million deal, meaning they would earn $416,000...
Read more on Celebrity Balla
 
Adam Levine splashes out $4.55m on new home
Adam Levine and his wife Behati Prinsloo are set to splash out $4.55 million on their first apartment together. The Maroon 5 frontman and the Victoria's Secret Angel - who tied the knot in July - are said to be in...
Read more on Celebrity Balla
 
Seth Rogen says stolen celebrity photos shouldn't be posted
Seth Rogen has urged people not to post the naked photos stolen from Jennifer Lawrence's phone. The 'Knocked Up' star is disgusted by the leak of explicit images of the Oscar-winning actress and is adamant that what has...
Read more on Celebrity Balla
 
Miley Cyrus: Elvis was the original twerker
Miley Cyrus has claimed Elvis Presley was the original twerker. The 'We Can't Stop' singer has attracted much attention and criticism for her penchant to perform the butt-shaking dance on stage in various flesh-flashing...
Read more on Celebrity Balla