Can Twitter CEO Parag Agrawal double revenues by 2023
November 29, 2021
The board of Twitter announced today that Parag Agrawal is the social media company’s new Chief Executive, replacing founder Jack Dorsey. "I am incredibly energized by the opportunities ahead. By continuing to improve our execution, we will deliver tremendous value for our customers and shareholders as we reshape the future of public conversation," Agrawal, who earlier served as the chief technology officer (CTO), said in a statement. He was also appointed as a member of the company’s board of directors.
Agrawal, 37-years-old, is the youngest CEO of a company in the S&P 500 Index. He joins other Indian American CEOs who run large and medium U.S. companies with a combined value of $6 trillion, according to a Global Indian Times study.
San Francisco based Twitter, which is one of the popular social media platforms among the 25 to 34 age group, had an average 211 million daily users worldwide during the third quarter of 2021. Analysts forecast its 2021 revenues will be around $5 billion, almost all from advertising. The company, which has a market value of $37 billion, has nearly 8,000 employees worldwide, according to its LinkedIn page.
Agrawal was not listed as a senior officer in the company’s 2020 regulatory filings, where Michael Montano was mentioned as the engineering lead. “Parag has been my choice for sometime given how deeply he understands the company and it’s needs,” Dorsey stated while announcing that Parag Agrawal was replacing him as CEO, in a memo to employees which he posted on Twitter. “Parag has been behind every critical decision that helped turn this company around. He’s curious, probing, rational, creative, demanding, self-aware and humble. He…is someone I learn from daily. My trust in him as a CEO is bone deep,” he added.
As CEO, Agrawal will receive an annual salary of $1 million and a bonus of up to $1.5 million. He was also awarded $12.5 million in restricted stock, which will vest over the next four years. He is eligible to receive an additional $12.5 million in performance-based restricted stock.
Dorsey co-founded Twitter in 2006. Agrawal joined the company in 2011, as a software engineer, while working on a Ph.D., and has served as CTO since October 2017. He has led teams, including in machine learning, to improve consumer experience and accelerate audience and revenue growth. Earlier, he spent over a year in research at Yahoo and also served in internships at AT&T Labs and Microsoft.
He holds a Ph.D. in Computer Science from Stanford University, 2005-2012, and a Bachelor's Degree in Computer Science and Engineering from the Indian Institute of Technology, Bombay. He finished high school from the Atomic Energy Central School in India.
He is married to Vineeta Agarwala, a partner at Andreessen Horowitz, a Silicon Valley, California based venture firm, which manages more than $19 billion. She leads the firm’s investments across therapeutics, diagnostics, and digital health. She holds a B.S. in biophysics from Stanford University, and MD and PhD degrees from Harvard Medical School /MIT where she worked in computational biology and human genetics.
“I believe it’s really important to give Parag the space he needs to lead…it’s critical a company can stand on its own, free of its founder’s influence or direction,“ Dorsey, 44-years-old, states in his memo to employees. "There's a lot of talk about the importance of a company being 'founder-led'. Ultimately I believe that's severely limiting and a single point of failure."
While running Twitter, Dorsey simultaneously was - and continues as - the CEO of payment firm Square, which he co-founded in 2009. Square, which has a market value of $98 billion, has provided a better return to investors than Twitter. Unhappy with Twitter’s stock performance, major investors were pressuring Dorsey to resign.
At the 2021 analysts’ day meeting in February this year, Dorsey said that Twitter had been slow, was not innovative and “that many people don’t trust” the social media platform. Outlining plans at the meeting to improve performance, Twitter said it aims to have 315 million monetizable daily active users by the end of 2023 and to at least double its annual revenue by that year.
Dorsey and the Twitter board likely see Agrawal’s Indian background as a major advantage in helping the company achieve its goals, especially given that American social media platforms are shut out of China. India is Twitter’s third largest market, behind the U.S. and Japan, with about 25 million users; the average number of daily users is lower. But, given India’s 1.4 billion population, the majority of whom are below age 35, Twitter, Facebook and other American social media platforms are aggressively pursuing growth in the country, which they view as their largest potential market.
Will Twitter, under Agrawal as CEO, be able to attain rapid user and revenue growth in India to help meet its 2023 goals? In his memo to employees, Agrawal was optimistic stating, “We recently updated our strategy to hit ambitious goals, and I believe that strategy to be bold and right.”