- Today, Twitter is ubiquitous — it says it has more than 200 million active daily users and the content published on its platform undeniably shapes culture, politics, and popular discourse across the world.
- It quickly proved to have wide appeal, attracting both users that wanted to connect and share messages with the growing social community, as well as companies that now had an easy way to interact with their customers and advertise their products.
- But discouraging earnings and an ongoing legal battle has not helped the already skittish state of platform advertisers, who have historically generated most of Twitter's revenue but have decreased spending amid recent economic uncertainty.
In this weekly series, CNBC takes a look at companies that made the inaugural Disruptor 50 list, 10 years later.
Today, Twitter is ubiquitous — it says it has more than 200 million active daily users and the content published on its platform undeniably shapes culture, politics, and popular discourse across the world.
But in 2006, Twitter was nothing more than a rough idea from then-New York University student Jack Dorsey. Dorsey, who was working at the podcasting startup Oedo at the time, pitched the idea to his colleagues of creating an SMS service that would allow users to publicly communicate with an entire community, rather than privately to one person, like traditional messaging.
The idea resonated with the Odeo team, and was then further developed by Dorsey and Noah Glass. A year in, Odeo founder Evan Williams told investors that the startup was pivoting its focus to Twitter, rather than podcasting, and hoping to save investors a loss, offered to buy back Odeo's stock.
Investors have since speculated if Williams knew more about Twitter's potential than he let on at the time, but nonetheless, they agreed.
At first, Twitter attracted little attention, but after the team attended the 2007 South by Southwest Interactive conference, where they recieved broad praises, the platform's usage tripled overnight— and Twitter established itself as a leading force in the emerging social media landscape.
In the following months, Twitter officially became its own company, with Dorsey as its CEO. Its first round of funding saw it raise $5 million at a valuation of $20 million.
Twitter proved to have wide appeal — it attracted both users that wanted to connect and share messages with the growing social community, as well as companies that now had an easy way to interact with their customers and advertise their products.
And it also proved to have a unique value for celebrities, politicians, and public figures trying to prove their relevance and communicate with their audience.
In the 2008 U.S. presidential election, for example, Barack Obama amassed more than 20 times the followers of his opponent, John McCain. This established the importance of a Twitter following, setting the tone for an entire future of political reliance on the platform.
And journalists followed suit.
Twitter allowed for the instant sharing of news, which facilitated the dissemination of information on an unprecedented timeline.
By 2012, when Twitter celebrated its sixth birthday, it said it had 140 million users that tweeted 340 million times per day and had established itself as a prominent outlet for the sharing of a vast array of information, from daily musings to breaking news.
In November 2013, Twitter became a public company in one of the most eagerly awaited initial public offerings since Facebook a year earlier. At the end of its first day of trading, the company had a market value of $32 billion.
Dorsey, who was forced to step down as CEO in 2008, returned to the position in 2015 and led the development of several new features to the app that aimed to increase user interaction, including Moments, which allowed users to curate collections of tweets. This was later replaced with Explore, in 2017, which collected trending subjects.
Twitter finally became profitable for the first time shortly thereafter, in its fourth fiscal quarter of 2017.
Over the next few years, the company continued to grow in both cultural popularity and number of users.
In November 2021, Dorsey stepped down as CEO again and was replaced by Chief Technology Officer Parag Agrawal.
Then, in April, billionaire entrepreneur Elon Musk agreed to buy Twitter for $44 billion.
But since then, Musk has tried to pull out of that deal, citing his belief that Twitter was in material breach of multiple provisions of the original agreement, particularly his request that the company share information about the number of fake and spam accounts active on the social media platform. In response, Twitter has denied these claims and sued Musk, in hopes to force the acquisition.
Twitter and Musk are set to face each other in court this October.
The ongoing legal battle has not helped the already skittish state of advertisers, who have historically generated most of Twitter's revenue but have decreased spending amid recent economic uncertainty. The company reported discouraging earnings last month, as its revenue declined, resulting in a net loss.
Then, just earlier this week, former head of Twitter security, Peiter Zatko, filed an explosive 200-page whistleblower disclosure with the Securities and Exchange Commission, the Federal Trade Commission, and the Department of Justice, in which he detailed that Twitter executives deceived both its board of directors as well as federal regulators about extreme deficiencies in its security measures against hackers, as well as the company's minimal efforts to combat spam.
Beyond being misleading to key stakeholders, Zatko argues that the company's practices have jeopardized U.S. national security. He claimed that thousands of Twitter employees had access to company software and data — which they used and interacted with to work on Twitter's live product — highlighting a stark departure from the norms of companies like Meta and Google, which require the use of dummy data. He ultimately pointed to this expansive access to user data as what allowed for the hacking of high-profile Twitter accounts, including former presidents Obama and Donald Trump, as well as Musk.
Zatko furthermore alleged that Twitter prioritized user growth at the cost of reducing spam, among a myriad of other security-related breaches.
Twitter responded to the claims by characterizing them as inaccurate and opportunistic, with Twitter spokesperson Rebecca Hahn telling the Washington Post that "Security and privacy have long been top companywide priorities at Twitter," and further claiming that Twitter had fired Zatko after 15 months "for poor performance and leadership."
What will come of Zatko's claims, and how it might both impact Twitter and Musk's legal defense against Twitter, is yet to be seen.
For now, Twitter is faced with the massive task of restoring confidence, both in the courts and in the minds of its millions of daily users, that the platform is secure, safe, and honest in its proceedings.
Ultimately, Zatko argued it was this hope for new scrutiny and accountability that would drive the company to improve its practices that led him to file his whistleblower complaint.
"I still believe that this is a tremendous platform," he claims. "And there is huge value and huge risk, and I hope that looking back at this, the world will be a better place, in part because of this."
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