Twitter Inc (TWTR)

[JohnSamuel]

Twitter Inc. Chief Financial Officer Anthony Noto seems to be taking a page out of his former employer Goldman Sachs' playbook, hoarding an increasing level of power.
This comes at a critical time for Twitter(TWTR), whose stock just suffered its worst seven-day decline in its history, and as investors flee social media stocks in general (http://www.marketwatch.com/story/7-charts-show-investors-antisocial-behavior-2015-05-01).
Noto, an investment banker poached from Wall Street darling Goldman Sachs (GS) in July 2014 to run Twitter's finance department, has expanded his purview to marketing from just finance, according to a report in The Wall Street Journal . (http://blogs.wsj.com/digits/2015/05/05/twitter-hands-marketing-to-financial-chief-anthony-noto/)
(http://blogs.wsj.com/digits/2015/05/05/twitter-hands-marketing-to-financial-chief-anthony-noto/)It's quite the unconventional strategy to give a CFO control over the marketing department, particularly a CFO who has become infamous for publicly tweeting what should have been a direct message of private company data. His Twitter account was later hacked.
Noto's resume is stacked with financial experience, such as leading the Twitter initial public offering and serving as CFO of the National Football League . His bread and butter is operational finance, accounting and tax, according to his LinkedIn page, not advertising and marketing strategy.
It underscores an internal struggle within Twitter internally, a lost-identity of sorts within the company's marketing department, which has struggled to find a permanent home among Twitter's corporate business divisions and a leader: Noto is the department's third boss since January.
But the news comes fresh off a weak earnings report, leaving Twitter grasping for straws as it struggles to improve analyst and investor sentiment. The stock is down 28% since its earnings report last Tuesday. Shares closed down 0.4% to $37.26 on Wednesday, though they remain up 17% over the last 12 months, outperforming the broader S&P 500, which is up 11.3%.
Last week, more than two dozen analysts lowered their stock price targets on Twitter following the company's April 28 earnings report. Cantor Fitzgerald's Youssef Squali cited a lack of visibility regarding growth.
Twitter's total ad revenue growth as a percentage of monthly active users decelerated during the quarter, which the company blamed on a weaker-than-expected contribution from its newer direct response ads. Sales of $436 million came in short of the $456 million analyst estimate on FactSet.
Morningstar analyst Rick Summer said Twitter's lack of scale compared with larger rivals Facebook Inc. (FB) and Google Inc. (GOOGL) may be lowering its share of the broader advertising budget pie. But improving that scale and those advertising proceeds are critical, as 89% of Twitter's revenue last quarter was composed of advertising revenue such as promoted tweets and videos, promoted accounts and promoted trends. The remaining $48 million of sales came from data licensing and what Twitter deems as "other revenue."
Twitter has a few other potential growth drivers up its sleeve, including Periscope, its new live broadcasting app, though the company has not yet announced plans to monetize it with ads. The company has also been trying to improve monetization among logged-out Twitter users, a much larger group compared with its daily active users, who access Twitter content on third-party sites.
- Jennifer Booton ; 415-439-6400; [e-mail]
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(END) Dow Jones Newswires
05-06-15 1724ET