A day after Twitter (TWTR) CEO Jack Dorsey testified before the Senate Judiciary Committee about a foundational internet law alongside Facebook (FB) CEO Mark Zuckerberg, prominent NYU business professor Scott Galloway called for Dorsey’s ouster.
In an interview Wednesday with Yahoo Finance Live, Galloway, who has been critical of Dorsey’s decision to simultaneously serve as CEO of both Twitter payments firm Square (SQ), said the social network should cut Dorsey off from his current role.
“He should be fired,” Galloway said. “I mean this is a big company with thousands of employees that plays a big role in the discourse of society, and about 1 p.m. every day he peaces out and he goes to another firm.”
Galloway isn’t the only one who’s taken shots at Dorsey’s dual roles as CEO. In March, Elliot Management sought to oust Dorsey from Twitter after the social network’s CEO said he planned to move to Africa for 3 to 6 months while continuing to lead both Twitter and Square.
Twitter and Elliot eventually came to an agreement that left Dorsey in place, and gave Elliot and Silver Lake, which also joined in the scrum, seats on Twitter’s board.
Galloway, an investor in Twitter, however, still isn’t satisfied with Dorsey’s divided attention.
“The fact that he’s a part-time…renders him totally incapable of providing the attention and leadership that this company needs,” Galloway said. He added that Twitter has failed to innovate and “scarily” looks like it did in 2015, the year Dorsey started his most recent stint as CEO of Twitter.
Twitter declined when reached for comment on Galloway’s criticism.
‘I honestly didn’t think we’d land on Jack’
If Twitter were to fire Dorsey, it would not be the first time it axed its co-founder. Back in 2008, Twitter fired Dorsey as CEO while the fledgling site faced innumerable challenges including frequent site crashes, as Roger Parloff reported for Yahoo Finance. The ousted Twitter CEO went on to found Square and in 2015 returned to replace Dick Costolo, whose leadership disappointed Wall Street.
Scott Galloway, lecturer in Marketing at New York University, speaking at the DLD (Digital-Life-Design) conference in Munich, Germany, 18 January 2016. For three days, guest speakers discuss trends and developments in digitalisation at the innovation conference.
While the board initially said it would only hire a CEO who could lead full-time, it eventually reversed course and allowed Dorsey to lead again. Twitter co-founder Evan Williams wrote in a Medium post at the time that the board had “discussed ad nauseam the challenges of Jack doing both his CEO jobs at once.”
“I honestly didn’t think we’d land on Jack when we started unless he could step away from Square. But ultimately, we decided it was worth it,” Williams wrote, explaining that Dorsey’s ties to Twitter inform “a depth of vision and authenticity of voice.”
It is extremely unusual for one person to serve as CEO of two multibillion-dollar companies. The other notable example is Elon Musk, the CEO of both SpaceX and Tesla (TSLA), who has jumped in to defend Dorsey’s tenure as CEO.
Twitter is not monetizing itself properly
Dorsey’s firing is not the only change at Twitter that Galloway’s calling for. As for systemic changes, Galloway says that Twitter needs to transition away from an ad-based revenue business, and instead institute a subscription model.
“There isn’t a single platform that has the influence of Twitter that isn’t trading at 20 to 30 times the market capitalization,” he said. Facebook’s market cap as of Thursday was $777 billion, while Google’s sat at over a trillion and Twitter’s was just under $35 billion.
While the company may not have the scale to take on the likes of Facebook and Google in advertising, Galloway says the number of big-name influencers ranging from celebrities to experts in the fields of finance and media make it a ripe opportunity for subscriptions.
“Say 7,000 to 10,000 followers are free, 10,000 to 100,000 is $50 a month, and anyone above a million followers pays $1,000 to $10,000 per month. There’s tremendous value when you have that type of influence and followership on the platform,” Galloway said.
Such a move, Galloway admitted, could cause Twitter’s revenue to decline by 10% to 20%, but, he added, the company’s stock price would double.
“We’ll see if they come through with it, but that’s why I’m a shareholder,” Galloway said. “I think this company has tremendous value to be unlocked via the exiting of the advertising industrial complex and moving to a subscription model.”