Twitter's Dorsey named executive chairman

Twitter co-founder Jack Dorsey will become executive chairman and head of product development as the company aims to narrow Facebook’s lead in online advertising and get users to be more active on its site.

The move means Dorsey, who stepped down as Twitter’s chief executive officer and became chairman in 2008, will play a more hands-on role at the San Francisco-based provider of microblogging. He will also remain CEO of Square, the mobile-payments provider he co-founded in 2009.

Twitter needs Dorsey, who helped build its blogging platform, to develop other products that get users to spend more time on the site, said Debra Aho Williamson, an analyst at EMarketer. Twitter may generate less than one-tenth the advertising sales of Facebook this year, her firm says, and its user base is expanding more slowly.

“Twitter is recognising that it might have a product problem,” said Williamson, whose firm is based in New York. “To be anywhere close to the success that Facebook has achieved, Twitter just needs to be used by more people on a more regular basis.”

Ad sales on Twitter may more than triple to about $150 million this year, according to EMarketer. Facebook brought in ad revenue of $1.86 billion last year, the firm estimated. Facebook had 151 million users in the US in February, up 35 per cent from a year earlier, according to ComScore Inc in Reston, Virginia. Twitter had 23 million, up 16 per cent.

Users of Facebook, founded two years before Twitter, should account for 42 per cent of the total US population this year, up from 38 per cent last year, according to EMarketer. Twitter users should make up 8.7 per cent of the country’s adult population this year, up from 7 per cent last year.

Twitter says it has more than 200 million registered accounts and that it’s creating almost 500,000 accounts a day. It took about 18 months to sign up the first 500,000 accounts.

Still, a minority of users contribute an inordinately high percentage of the service’s messages, according to a study by researchers at Yahoo! Inc. and Cornell University earlier this month.