Displaying items by tag: Jack Dorsey
Twitter co-founder and chief executive Jack Dorsey has pledged $1 billion of his personal fortune to Covid-19 relief. The money comes from his share in Square and equates to almost a third of his overall net worth.
Dorsey said in a series of tweets that he would transfer his equity in his digital payments group Square to his limited liability corporation Start Small, contributing around 28 percent of his overall wealth.
The move could be the largest from a single individual for coronavirus relief and comes with the pandemic spanning the globe and inflicting a heavy toll in lives and economic devastation on the United States.
"Why now? The needs are increasingly urgent, and I want to see the impact in my lifetime," Dorsey said.
"I hope this inspires others to do something similar. Life is too short, so let's do everything we can today to help people now."
Dorsey said that after the pandemic ends, the fund would focus on health and education for girls and "universal basic income" efforts.
Dorsey, who is CEO of both Twitter and Square, has created a foundation as well as the Start Small LLC, a model similar to that established by Facebook founder Mark Zuckerberg in his Chan-Zuckerberg Initiative, to allow for flexibility in funding startups and efforts a foundation may be ineligible to fund.
A document link tweeted by Dorsey showed the new fund had already pledged $100,000 to a new initiative called America's Food Fund launched by Laurene Powell Jobs, the widow of Steve Jobs, and actor Leonardo DiCaprio.
Dorsey's net worth is estimated at about $3 billion including his stake in Twitter and Square.
He said he chose to use his equity from the payments group because "I own a lot more Square."
Other technology entrepreneurs have pledged relief efforts in varying amounts. Amazon founder Jeff Bezos has pledged $100 million to help food relief efforts during the pandemic, and Zuckerberg has offered more than $25 million to help research through the Bill & Melinda Gates Foundation.
The Gates Foundation last month pledged $125 million for research but is believed to be investing more in a variety of projects.
Twitter recently reported a net loss in the fourth quarter of 2016 of $167 million, after a $90 million deficit in the corresponding period a year ago. The company's shares dropped more than 12 percent to close at $16.41 as investor hopes faded for a revival of the micro-blogging platform, which has been lagging behind its social media rivals.
Revenue in Q4 2016 rose one percent for Twitter to $717 million. The crucial area of user growth saw Twitter end 2016 with 319 million monthly active users – an increase of four percent from the previous year and just two million more than the previous quarter. Despite the fact that US President Donald Trump shares updates via the platform, Twitter's user growth is relatively low.
Twitter relies heavily on advertising for its revenue, which was down slightly from the previous year at $638 million. In the United States alone Twitter's revenue was down five percent at $440 million. For the total year 2016, the company lost $456 million on revenues of $2.5 billion. That represented a narrowing of the deficit from 2015 and a 14 percent increase in revenue.
Twitter chief executive Jack Dorsey remains positive that the company will bounce back, speaking of long-term prospects following its efforts to revamp the platform with more video and other changes.
"The whole world is watching Twitter," said Dorsey in a conference call. "While we may not be meeting everyone's growth expectations, there's one thing that continues to grow and outpace our peers: Twitter's influence and impact." Dorsey said Twitter "carries some of the most important commentary and conversations," and is a tool to mobilize people into action.
However, some analysts believe Twitter is growing at too smaller rate in the rapidly evolving social media space. For instance, Jan Dawson from Jackdaw Research says Twitter has been attempting to get more users and has improved engagement, but "some of this stuff has been in the works for over two years, and Twitter still doesn't seem to be making meaningful progress."
Dawson went so far as to label Twitter's revenue outlook as "pretty awful" in a blog post, and said the company will likely face a difficult time keeping advertisers interested.
Dawson said, "Twitter's big competitors for direct response advertising -- notably Facebook and Google -- are just way better at this stuff than they are, and Twitter simply hasn't made anywhere near enough progress here over the last few years. As a result, Twitter is enormously susceptible to competitive threats."
Despite the criticism, Twitter says it continues to work toward achieving profitability in 2017. Dorsey said that Twitter "overcame the toughest challenge for any consumer service at scale by reversing declining audience trends and re-accelerating usage." He added that "daily active usage accelerated for the third consecutive quarter, and we see this strong growth continuing."
Twitter announced on October 27 plans to cut nine percent of its workforce as it struggles on after failing to find a buyer. There was talk about Google or Salesforce purchasing the social network, but neither confirmed that it wasn’t pursuing the idea. Twitter reported a net loss for the quarter of $103 million, compared with a $132 million loss last year.
The one area that Twitter has shown strength is in advertising, which saw the company’s revenue grow eight percent to $616 million. Twitter’s chief executive, Jack Dorsey said the company sees a “significant opportunity to increase growth as we continue to improve the core service,” referring to Twitter’s quarterly results. “We have a clear plan, and we’re making the necessary changes to ensure Twitter is positioned for long-term growth.”
Twitter has been battling to grow its audience. The key metric of monthly users rose slightly from 317 million from 313 million in the prior quarter – a growth pace which has prompted concerns over the company’s ability to keep pace with other fast-growing social media channels and attain profitability.
Twitter’s restructuring “is intended to create greater focus and efficiency” and help move toward profitability in 2017, the company said. The social media network faced disappointment when Salesforce – which showed interest in purchasing Twitter – didn’t proceed to make an offer, as it wasn’t a good fit for the group.
Dorsey insists that his company’s profits show positive signs, even though Twitter has never posted its profits. “The key drivers of future revenue growth are trending positive,” he said, adding that he remains “confident in Twitter’s future.” The staff cuts to the company amount to about 350 jobs based on the Twitter website’s headcount of 3,860 employees worldwide.