Twitter Brings Back Jack Dorsey to Help Catch Facebook

Mar 29th, 2011 | By | Category: Marketing

Twitter founder Jack Dorsey is assuming the role of Executive Chairman to reinvigorate the company’s product design, Twitter announced Monday. The move comes as Twitter strives to catch up with Facebook as an advertising platform.

M20 Jack Dorsey Twitter Brings Back Jack Dorsey to Help Catch Facebook

Photo by Joi Ito

Dorsey, 35, is considered a game-changer in business circles. He originally conceived what became Twitter in the 1990s as an online service to assist dispatch routing for taxi cabs, couriers, and emergency services. After the dawn of instant messaging, he and Blogger founders Evan Williams and Biz Stone expanded his original idea to create an instant messaging service where groups of friends could share short text messages. They named the service Twitter, comparing instant messages to a bird’s “tweets.” Twitter was conceived in 2006 and became its own company in April 2007.

The service grew rapidly, from tens of thousands of tweets per day in April 2007 to hundreds of millions of tweets per quarter in 2008. By the beginning of 2009, Twitter was the third highest-ranking social network, behind Facebook and MySpace. By summer 2010, with 65 million tweets a day, Twitter had passed MySpace, though it now lagged behind Windows Live Profile.

Dorsey stepped down as Twitter’s chief executive officer in October 2008, replaced by Williams, and became chairman of the board. He turned his attention to founding Square, a service for accepting credit and debit payments through mobile devices. Dorsey will remain CEO of Square and will stay focused on Square as his top priority even as he returns to Twitter. At Twitter he will report to CEO Dick Costolo, who replaced Williams in October 2010.

Twitter hopes Dorsey’s product design vision will help the company close its advertising revenue gap with Facebook. Facebook has 151 million users in the US, while Twitter only has 23 million. Facebook brought in an estimated $1.86 in advertising revenue last year, and remains far ahead of Twitter in ad revenue generation, at an estimated ten-to-one ratio.

Analysts say that to catch Facebook, Twitter needs to figure out how to attract more active users and get them to use the service longer and more frequently. Twitter usage is currently dominated by a core group of 20,000 users, who contribute more than 50 percent of all tweets. 100 million unique users in the United States would make Twitter a dominant media platform, analysts estimate. Williams said last October that the company aims to attract 1 billion users worldwide.

Despite lagging behind Facebook, Twitter is experiencing significant growth. Last year it updated its service to improve speed, usability, and ability to handle photos and videos. Its number of users grew 16 percent over the last year. Twitter currently has more than 200 million registered accounts and is creating almost 500,000 accounts a day. Over the next year Twitter ad sales are expected to triple to $150 million. The company was valued at $3.7 billion in December 2010.

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