As Twitter's stock tanked after revenue fell short of projections and disappointing guidance for the second quarter, CEO Jack Dorsey sat down for an interview to talk about what Wall Street has wrong about the company, and his vision for the future.
Despite the stock sinking by more than 13 percent in after-hours trading Tuesday, Dorsey insisted that his turnaround plan is working, and that he's the right person to run the company. (Twitter stock was down 15 percent Wednesday.)
"We've never had more focus as a company, as a development team," said Dorsey. "I want to make sure that Twitter is the place that you check first thing to start your day. It will tell you exactly what's happening in the world. What's most important. What matters. And that's what we're driving towards, what we're focused."
Dorsey said he has a system and team in place to allow him to juggle running two publicly traded companies at once -- mornings at Twitter, afternoons across the street at Square. And while he says the board has a fiduciary duty to evaluate any acquisition offers, he's focusing on executing the plan he laid out to turnaround Twitter.
When pressed about the ad weakness that's weighing on Twitter's revenue and outlook, he pivoted to the fact that advertisers are shifting from Twitter's traditional ad formats to video ads, laying the groundwork for growth ahead. He wouldn't comment on whether Twitter is suffering from increased competition from advertisers such as Facebook and Snapchat, just saying that there's "a lot of opportunity" ahead in video ads.
Jack Dorsey, CEO of Twitter. Getty Images
One surprise bright spot for Twitter: It gained 5 million users in Q1, after losing users for the first time the previous quarter. Dorsey attributed that improvement -- 2 million more users than expected -- to "refinements" he's been making to the service, the introduction of the Moments feature, and more integration of live streaming video service Periscope. "More tweets, more replies, more replays, more retweets, more likes obviously," Dorsey said of the impact of the changes. "We're seeing less than 2 percent opt out. People are actually loving the experience." But Dorsey said to make bigger shifts, Twitter must make sure the fundamentals of the service is strong, which is what its been focusing on for the last six months.
Dorsey didn't answer a question about whether he wished the company was adding users faster, just saying that the company has "a lot to fix on the fundamentals." He wouldn't give any insight into how quickly he foresees the company adding users over the rest of the year. He also wouldn't say what impact he thinks Twitter's recent deal with the NFL will have on Twitter's user base. Instead, he said the NFL deal speaks to the value Twitter sees in live events, and is a sign of things to come. "We think this is a great opportunity for our advertisers and also people that are interested in the NFL and football," Dorsey said.
Twitter is facing increased competition from Facebook, which is making a big play into Twitter's focus on live events, particularly with its big push behind Facebook live-streaming video. And Facebook has a user base that's five times the size of Twitter's. Dorsey insisted despite Twitter's smaller scale and lack of meaningful growth, it still has an advantage.
"We've always seen competition over our 10 years and we believe we have a leadership position in live. Live is not just about live streaming, but it's around these live events. And we think Twitter is better positioned than anyone else out there because the people on it are tweeting every single day about what they're seeing, what they're thinking, and about what's happening right now. Because we're public, because we're distributed, because we're real time, and because we're simple.
Dorsey dismissed the fact that Facebook has a lot more information about its users than Twitter does. He responded that Twitter has always had information about what people like based on what they're following and tweeting about: "That signal is extremely rich, so we can provide fundamentally better experiences because they match your interests, because we can connect you with people who share that interest."
He also made a dig at Facebook Messenger's recent move into customer service, an area Twitter has been working on for some time. Dorsey subtly derided the fact that Facebook's Messenger is focusing on artificial intelligence to allow companies to interact with customers: "We think that this is a place to get really human-focused customer service and a human touch around that."
Dorsey said the investment community doesn't understand Twitter's massive power "influencing culture and influencing the world." He sees a path to make the service easier to use, which will "unlock new behavior."
"I don't think there's any other place in the world where you can see what's happening in the world faster than Twitter," he said. "And that hasn't been replaced no matter how hard others have tried." But there's a clear disconnect between Dorsey's quiet confidence and Wall Street's perception of the company's potential, as evidenced in double-digit declines.
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Amina AlTai teaches entrepreneurs and intrapreneurs how to balance a thriving career, body and mind.