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30-11-2021|Business

Jack Dorsey resigns from Twitter after 16 years; Parag Agrawal to be new CEO.

SAN FRANCISCO — Jack Dorsey resigned as CEO of Twitter on Monday, the social media platform he co-founded in 2006 and guided through the Trump administration's turbulent years and rising calls for regulation from lawmakers around the world.

He was replaced by Parag Agrawal, who has recently been working on technologies related to cryptocurrencies, which have become a fascination of the technology industry's power brokers, including Mr. Dorsey, as the company's chief technology officer.

Mr. Dorsey's departure represents a significant shift at Twitter, which has faced years of pressure from investors who believed it was not profitable enough, as well as criticism from Washington, particularly from Republican lawmakers who claim Twitter has stifled conservative voices on social media.

Former President Donald J. Trump, who used his Twitter feed to threaten his adversaries and keep his allies in line, was the most famous of these voices. Mr. Trump was banned from Twitter shortly after the attack on the Capitol on Jan. 6.

Mr. Dorsey, 45, is also the CEO of Square, a payments startup. He was dismissed from Twitter's top job in 2008 but returned in 2015. His resignation is the second major shake-up at a major social media business in as many months. Facebook changed its name to Meta last month. The change was accompanied by a new corporate logo and a focus on a virtual environment known as the metaverse, although Mark Zuckerberg, the company's high-profile CEO, will remain in charge.

Mr. Dorsey's departure marks a significant shift in the company's leadership. Mr. Dorsey's name has become as synonymous with Twitter as Mr. Zuckerberg's has been with Facebook, despite the fact that Twitter is a fraction of the size of Facebook. Mr. Dorsey has become a celebrity outside of Silicon Valley, with his long facial hair and personal wellness goals mocked on "Saturday Night Live" and mocked on his own social media platform.

Tim Hubbard, an assistant professor of management at the University of Notre Dame's Mendoza College of Business, said, "If you stand back and look about who's had a huge influence on social media over the last decade, the name Jack Dorsey is always going to come up."

Mr. Dorsey, like Mr. Zuckerberg, has been summoned to appear in Washington about his company's content moderation and censorship issues. However, one of Mr. Dorsey's lieutenants took the decision to delete Mr. Trump's account, in contrast to Mr. Zuckerberg's direct involvement in high-profile moderation decisions. When the incident occurred, Mr. Dorsey was working on a private island in French Polynesia, adding to concerns that he was not completely involved with his company.

Mr. Dorsey stated in an email to Twitter employees, which he also made public, that he wanted the firm to quit being a founder-led corporation, which he believes will be a liability in the long run.

Mr. Dorsey stated, "I've worked hard to guarantee that this firm can break away from its inception and founders," adding, "I believe it's vital that a company can stand on its own, free of its founder's influence or direction."

"There aren't many companies that achieve this level of success." Mr. Dorsey added, "There aren't many founders that put their company ahead of their own ego."

Beyond the announcement, a Twitter spokesman declined to comment. CNBC was the first to report on Mr. Dorsey's plans.

Employees and investors had been questioning Mr. Dorsey's leadership and concentration for some time. His retirement comes a year and a half after he resisted an attempt by activist investor Elliott Management to force him out.

Mr. Dorsey's attention was split between the two companies he led, which was one of Elliott's main concerns. Twitter, according to the corporation, had lagged behind its social media competitors in terms of boosting its stock price and launching inventive new products.

During the attempt to force Mr. Dorsey out, several employees rallied with him, adopting the hashtag #WeBackJack as a rallying cry.

Mr. Dorsey was able to stay at Twitter when Elliott Management reached an agreement with Silver Lake, one of Silicon Valley's largest technology investors, in March 2020. Jesse Cohn, the Elliott executive who supervised the Twitter campaign, was also given a seat on Twitter's board of directors as part of the transaction. Mr. Cohn was a member of a five-person committee that oversaw a review of Twitter's CEO succession plans.

The committee completed its evaluation in November, stating that it had "updated the C.E.O. succession plan in line with best practises,” according to a regulatory filing, laying the groundwork for the transition. Mr. Dorsey outlined an ambitious plan to double Twitter's revenue by the end of 2023 in February, as the company's stock began to rise. The company also increased the frequency with which it released new services such as audio chat, newsletters, and tipping.

In June, Mr. Cohn resigned from Twitter's board of directors.

In a joint statement, Mr. Cohn and Marc Steinberg, a senior portfolio manager at Elliott, said, "Our partnership with Jack and the company for the past two years has been constructive and beneficial." "We are sure that they are the ideal leaders for Twitter at this important juncture for the company," they said of Mr. Agrawal and Bret Taylor, the president of Salesforce and Twitter's new board chairman.

However, some of Twitter's stock market gains have faded in recent months, with shares now trading at around the same level as a year ago. Twitter's revenue increased 37 percent year over year to $1.28 billion in the third quarter, yet it lost $537 million.

Some lawmakers have called on Twitter to do more to combat misinformation and hate speech on the network, while others have accused Mr. Dorsey of censorship and argued that more content should remain accessible.

Mr. Dorsey has been irritated by the moderating issues for a long time. He saw Twitter as a vehicle for free speech and objected to the idea of censoring anything, particularly from world leaders and other newsworthy personalities.

Mr. Trump's inflammatory  tweets tested Mr. Dorsey’s stance.  Before finally removing Mr. Trump's account, Twitter compromised by labelling some of his tweets as false information.

Mr. Dorsey, who will remain on Twitter's board of directors until the next election in 2022, emphasised that he chose to go rather than being forced to. According to a person familiar with his thoughts who was not permitted to talk publicly, he had recently addressed his wish to leave Twitter and focus on cryptocurrency and charitable projects.

Mr. Dorsey has become more interested in cryptocurrencies and the principle of technology decentralisation in recent years. In 2019, he stated that Twitter would assist in the development of a decentralised form of social media that would allow individuals to design their own algorithms for boosting content and manage their own communities, rather than relying on tech companies to do so.

Mr. Agrawal was chosen by Mr. Dorsey to lead Twitter's contributions to Bluesky, a project that is funded by Twitter but runs independently. Jay Graber, a cryptocurrency developer and the founder of a social events start-up, was hired by Twitter to lead Bluesky in August.

Mr. Agrawal, 37, is a low-profile figure who began his career as an engineer at Twitter over a decade ago. He rose through the ranks of the corporation, eventually becoming its chief technology officer in 2017.

In his email, Mr. Dorsey stated, "Parag has been behind every crucial decision that has helped turn this company around." "I have complete faith in him as our CEO."

Mr. Dorsey's fortune is largely derived from Square, which he co-founded in 2009 after his last departure from Twitter. Mr. Dorsey stated last year that he would donate $1 billion, or about a third of his total wealth, to coronavirus relief efforts and other humanitarian endeavours. Mr. Dorsey has also donated $15 million to guaranteed-income initiatives, which allow cities to provide financial assistance to low-income individuals. Mr. Dorsey's net worth is estimated to be above $11 billion by Forbes.

Before trading was halted, Twitter's shares rose 5% on news of Mr. Dorsey's departure. It was down roughly 2.7 percent at the closing.

Mr. Dorsey tweeted on Sunday night, potentially foreshadowing the news to come, "I love Twitter."

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