RAISING THE STAKES
Major shareholder suggests merger with Google, ‘live’ tab curated by human editors
Twitter shareholder’s essay criticizing social network makes waves,
SAN FRANCISCO— Twitter executives were all set to present their vision to shareholders at the company’s annual meeting in San Francisco on Wednesday afternoon when they were pre-empted by one of their own shareholders.
Just hours before Twitter opened the doors to shareholders, longtime Twitter investor Chris Sacca published an 8,500-word online essay on “What Twitter Can Be.”
The essay, from one of the company’s most loyal cheerleaders and largest shareholders, tore through the worlds of technology and finance, turning up the pressure on an already beleaguered management.
Sacca later referred to rumours of Twitter as an acquisition target and told CNBC Wednesday that it would be a good fit with Google Inc. in a merger scenario.
“I think it would be a fantastic use of Google’s cash,” Sacca said. “It’s an instant fit. This is the thing that Google never had. They’ve never understood social, have never understood those personal interactions. This bolts in quite clearly.”
Sacca’s comments followed his blog post, in which he called on Twitter executives to make products easier to use and less intimidating, offering concrete suggestions on how to broaden the appeal of the service by highlighting live events and popular discussions.
Sacca also chided Twitter for not taking bigger risks, saying it had lost out on nearly one billion people who tried the service but eventually gave up on it.
Twitter claimed 302 million monthly users in the first quarter of 2015, which is about one-fifth of Facebook’s 1.4 billion users
“I believe Twitter can be so much more than it is today,” wrote Sacca, a former adviser to the company who invested in Twitter through his own firm, Lowercase Capital LLC.
Sacca, who describes himself as “obsessed” with Twitter, says he has grown increasingly frustrated by its track record as a public company. Twitter has “failed to tell its own story to investors and users,” he said.
Among Sacca’s suggestions: a “live” tab to follow events as they happen with human editors curating the best tweets and Twitter channels dedicated to popular topics.
“Done right, and done soon, hundreds of millions of new users will join and stay active on the service, hundreds of millions of inactive users will return to the service and hundreds of millions more will use Twitter,” Sacca wrote.
Sacca did not address Twitter CEO Dick Costolo by name. And Costolo did not acknowledge Sacca’s essay during the hour-long shareholder meeting Wednesday afternoon, speaking instead about his commitment to increasing the number of Twitter users and boosting Twitter’s appeal with consumers. Twitter board members have voiced public support for Costolo, but that has not curtailed calls for him to step down.
Twitter’s slowing user growth has been a major sore point for investors. Twitter had 302 million monthly users in the first quarter. That’s about one-fifth of Facebook’s 1.4 billion users and about the same as Facebook-owned photo-sharing service Instagram.
But Twitter now has other problems as well. The stock has lost nearly 30 per cent of its value since late April, when the company slashed its sales forecast and reported revenue that fell short of Wall Street estimates. Shares closed up 60 cents, or less than 2 per cent, to $37 on Wednesday.
SunTrust Robinson Humphrey analyst Robert Peck said Sacca’s suggestions were “spot on, intuitive and highlight the (long-term) opportunity in front of Twitter if it executes.” With files from Bloomberg