Twitter’s great divide: A clash of product and business

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The audience at Le Web in Paris was stunned last week when Jason Goldman, the beloved VP of Product at Twitter for the last four years, announced he is leaving the company.

He tweeted afterward: “Thanks so much everyone at Twitter for the best job I could ever imagine. It’s been amazing and I think the future will be even brighter.”

Goldman’s departure, hot on the heels of former CEO Evan Williams’ resignation, has revealed a growing schism between the product side and business side of the organisation. Twitter’s business folks (led by new CEO Dick Costolo) have begun edging out employees with loyalties to Williams.

Though this kind of tension is nothing new in tech companies, Twitter is no ordinary tech company. Now enjoying a valuation as high as US$4-billion despite relatively modest revenues and a flattening of its traffic growth, Twitter needs to grow into a sustainable business.

The transition will not be easy, as the new CEO is already discovering. Costolo told the UK Telegraph last month: “I am currently trying to define what Twitter’s purpose is in the long term. We will be able to be more specific on that answer in the near future.”

The company won acclaim for its September redesign, making the site friendlier for casual users. It has begun generating advertising revenue while increasing its mobile usage. But, it’s still a long way from the mainstream.

A report released Thursday by the Pew Research Center indicates that only 8 percent of American Web users are Twitter users, and about the same percentage of American smartphone users also use Twitter.

In emerging markets, the percentages are substantially higher. ComScore reports that more than 20 percent of Brazil’s internet audience uses Twitter, as is the case in Indonesia. India ranks much lower at 8 percent, while South Africa is not in the Top 20 Markets. However, the Twitter co-founder has said that expansion into Africa via SMS is a priority.

Speculators say that only a major product push will win the mainstream audience for Twitter, which may require a fresh product team led by aggressive executives. Dan Frommer at Business Insider quotes an unnamed source who said the shift at Twitter “is the kind of sh*t that makes people want to configure their boards so that the business side can never oust the product side.”

Frommer uses the case of Facebook, where “product guy” Mark Zuckerberg retained the CEO title and brought the company great success. That took time, however, and Twitter has no shortage of investors willing to support the company until it finds itself. But at the very least, it appears, Twitter’s board wants to see a serious effort.

Part of Twitter’s growing pains include a fractured relationship with outside developers trying to build applications using the company’s API. In the Silicon Valley tech community, Twitter is considered the “least innovative company.”

Goldman told the LA Times that he takes criticism of the company in his stride: “I compare the evolution of Twitter to the evolution of media generally. When new media comes along, it has its weaknesses. There’s still a push-back to the internet. I think it makes sense that sometimes it’s hard to find the place in our lives that new media occupies. That’s something we have to work at.”

It’s unknown whether former CEO Williams will take Goldman’s spot as the head of product development, or if he’s on his way out of the company himself. But one thing is certain — losing a fixture like Goldman is a turning point for the adolescent organisation.

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