Twitter CEO Dick Costolo on Jack Dorsey, ad revenue, going public
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CORRECTION: The introduction to this interview originally misidentified the source of reports that Twitter founder Jack Dorsey’s role in the company was diminished. It was the New York Times. The text has been corrected.
Twitter CEO Dick Costolo rarely gives interviews. But just a week after the New York Times alleged that Twitter founder Jack Dorsey’s role in the company was diminished, Marketplace Morning Report host Jeremy Hobson got more than 140 characters worth of answers from Costolo in a one-on-one interview. He answers questions about Dorsey’s current involvement with the company, Twitter’s position on censorship, the company’s advertising business, and he responds to rumors about Twitters plans to go public.
Jeremy Hobson: It was created in 2006, it is the home of 140 character tweets and it now has hundreds of millions of users. I am talking, of course, about Twitter, and we are joined now by Dick Costolo, who is the CEO of the company. Good morning.
Dick Costolo: Good morning.
Hobson: I want to start by asking you just about this controversy that’s come up over the last few days after this profile of you in the New York Times, and whether Jack Dorsey — who founded Twitter — was taking on a diminished role at the company because employees found him, as the Times said, “difficult to work with.” Is that true?
Costolo: No, Jack is chairman of the board, and he does all the things that are required of that position. Additionally, when I asked Jack to come back into the company a couple years ago, it was because I felt we needed more clarity, guidance, and counsel around product vision and our design approach. And Jack has a very clear way of thinking about design and product, as the inventor of the product. He speaks with a fluency about those things.
So he did that, we launched our completely overhauled simplified view of the user interface at the end of the last year. Jack and I did that publicly together, and since that time, Jack is also, as you know, the CEO of Square, and has gone back to his role here as chairman of Twitter and CEO of Square. He’s done everything we’ve asked him to do at the company. He’s been an incredible help to me, and you know, people often ask me and they ask him, you know, ‘is Jack the next Steve Jobs?’ And my answer is always, ‘He’s the next Jack Dorsey.’ He’s going to go down as one of the great visionary entrepreneurs in American history.
Hobson: And at Twitter right now is he working more as a kind of adviser to you or involved in the day to day operations?
Costolo: His role as chairman of the board is certainly as an adviser to me, and then we look to him for advice and counsel on product vision and design vision.
Hobson: All right, well let me ask you more generally about Twitter. What is the most important role you think the company is playing in society right now — because it’s playing a lot — and how does that differ from what you would like it to do?
Costolo: I think the role that it’s playing in society right now is that we used to have a filtered, one-way view of events in the world from the media — whether it was a sporting event like the Olympics or an event like the presidential debates last week. America’s perspective of it, or the world’s perspective of that event, would be seen through the lens of the way that the media described it to them. For example, if you think about the debate you would have a guru in the studio next to the news anchor describing what had just happened. Maybe you would even have a couple people in a small room that would discuss what they’d just seen. Now with Twitter, people want to know what everyone else thinks and we’re getting this inside-out, multi-perspective view of what’s going on right now as it happens from everybody else that’s watching the same thing we’re watching. So I think the major transition for society has been one of from a single point of view in a filtered way to a multi-perspective, inside-out, unfiltered view of what people think of the event.
Hobson: So you see it primarily then as a media entity, as something that would compete with the other news outlets that we have?
Costolo: No, I view it as very, very complementary to the news outlets. In fact, one of the things we saw during the Olympics is that Twitter actually — it’s very much our perspective — drove tune-in to the Olympics. The NBC would I believe tell you that it was the highest-rated Olympics in 36 years. Now that was, keep in mind, in a world where people initially were saying on Twitter during the Olympics — how is this going to go well with NBC because people are going to be talking about what’s happening on Twitter during the day when the event’s not on until that night. In fact what was happening was people would see on Twitter something like — wow, the U.S. women’s 4-by-100 meter relay team just broke the world record and then they would make sure they tuned in that night to watch it when they might not otherwise even know that women’s track and field was going to be on that night. So I think it is incredibly complementary to news and media in a way that maybe other technologies haven’t been in the past.
Hobson: Well of course, like everything, it’s got its up and downs. And I have to say as a journalist I use Twitter. A lot of my fellow journalists use Twitter. But I do think it also enhances the echo chamber in the media a little bit. Do you think that’s the case?
Costolo: The power of the platform is that it gives everybody a voice. There are certainly people on both sides of the spectrum that want to hear what they already believe so that they can then turn around and echo that. I think, hopefully what the platform has done is painted a picture that there is a world of opinion in between the two ends of the spectrum. Look, you can choose to listen to one end of the spectrum or the other on Twitter, just like you can on television. But hopefully what we’ve done is given a voice to that broad middle ground.
Hobson: Have you been able to make ad revenue work through these broad promoted tweets?
Costolo: Yes. The very simple answer to that is yes. Our ad platform is working fantastically well. I think the beauty of the ad platform is it was designed so that the ads went everywhere the tweets went. Twitter was — from its origin — a mobile service. So we happen to have an ad platform that is perfectly suited to being a mobile advertising platform in a way that is probably the first of its kind and that’s going to be tremendously helpful to us as our entire use base transitions to mobile.
Hobson: How have you been able to do that because a lot of your competitors out there — or at least other Internet companies, big ones that we all use — have had a very hard time getting advertising revenue to work for them?
Costolo: I think the key point for us was we had a constraint when we first designed the ad platform that was it has to work on mobile because the origin and future of Twitter is mobile. The 140-character constraint was born out of a constraint in mobile messaging. So with that constraint in mind, we were able to design an advertising platform that was inherently mobile and was almost guaranteed to work on that platform from day one.
Hobson: What is the latest on whether and when you are going to go public?
Costolo: We are in the fortunate position not to have to worry about that right now — both from a financing perspective and the way the company is growing. So it’s not something we talk about inside the company or at board meetings. I’m sure it will be a subject of future conversation, but it’s not on our radar right now.
Hobson: Could you imagine yourself just not going public — being able to retain control over the company and stay private?
Costolo: I think the short answer to that question is that with some changes and regulations that have been made recently allowing for a larger number of shareholders in private companies and so forth — I think that the options open to private companies are much more interesting. Yes. I think it provides private companies with much more flexibility with regard to how they finance future growth and I think that’s incredibly helpful.
Hobson: On another issue, you obviously — since you’re so important in so many countries around the world, some of which are not quite as free as we are here in the United States — have to deal with issues of censorship or security or authorities coming to you and saying, ‘Take that tweet off’ or ‘Tell us who that person is, who’s tweeting?’ How do you deal with that?
Costolo: That’s a great question. As you can probably imagine, every one of these cases is different depending on national law, etc. In the U.S., where we obviously are headquartered, our perspective here and in the other countries in which we operate is one of look, we have to respect the rule of law, but we are going to do everything we can do defend and respect our users’ privacy and their voice. So for example, there was a case here in the U.S. — the Harris case — where we were asked to hand over a user’s information that we felt that the user should have the right to protest the forced production of their private information. So we fought that at a significant legal expense both in terms of our lawyers’ time and money. We were told that we had to hand over the information or we would be held in contempt. So what we did was we handed over the information under seal asking that it not be unsealed until the appeal had been resolved. I think that that’s one specific example and then there will be other examples that are very, very different from country to country. As you may know, we’re blocked in a couple of countries. We’re blocked in Iran and in China. We would love to be unblocked in those countries, but as you said, other countries don’t have the same thinking with regard to free speech that we do.
Hobson: But you’re just making those decisions on a case by case basis there at the top of Twitter?
Costolo: I think what we have is an overall perspective on how we want to deal with these things, which is very much defend and respect our users. And try to make sure that as much information on Twitter is as broadly accessible to people as possible. Having said that, we have then have to respect the rule of law in the countries in which we operate. A specific example is there are in the U.K. a kind of injunction known as a super injunction in which you’re asked or are required to hand over some information, but also may not even comment on the fact that you have been told to hand over this information. I think those kinds of things, we always worry about. They feel very Kafka-esque. I’ve talked about that before publicly. So we try to fight those things when we can, but again understanding we have to respect the rule of law.
Hobson: Finally, let me ask you: Where does Twitter go next? What is next for Twitter and what are the risks ahead for you?
Costolo: I think if you look down the road for Twitter, we would like to be a company — a service — that is used by billion of people around the world in every country in the world because we feel that the power of Twitter is that it brings people closer to each other, to their governments, to their heroes, etc. So that is absolutely our overriding goal for this service. I think the only thing standing in between that goal and where we are today is our own ability to execute against that vision.
Hobson: Dick Costolo, CEO of Twitter, thanks so much. It’s a pleasure having you on.
Costolo: Thanks for having me.
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