Twitter Inc. (TWTR - Analyst Report) recently appointed former Google (GOOGL - Analyst Report) executive, Katie Stanton the new Global Media Chief of the company. Katie Stanton is replacing Chloe Sladden, who had left the services of the online messaging service amid the recent management reshuffle. However, no reason was given for her departure.
The developments follow the resignation of Twitter’s Chief Operating Officer, Ali Rowghani in Jun, 2014. We believe that these executive changes are the result of the slowdown in Twitter’s user growth.
Stanton had joined Google in 2003 and served as the Product Manager of Google Finance. She was one of the first Googlers to join the Obama Administration, as the Director of Citizen Participation, in which she helped develop online tools that help Americans to get more involved with the White House.
In Jan, 2010 Stanton moved to the State Department as the Special Adviser to the Office of Innovation, where she worked on projects related to Twitter. She has been serving as Twitter’s Head of International Strategy since July, 2010.
Since Stanton has been associated with the top executives of Twitter for such a long time, she is well acquainted with the fundamentals of the company. The company expects that with Stanton onboard, it will be able to revive the slowdown in its user growth. Moreover, Twitter also hopes to encash Stanton’s strong public relations abilities.
Moreover, as the Head of International Strategy, she had to look after Twitter’s relationships with foreign media companies including the likes of BBC and Brazil’s Globo. Hence, it is believed that the new role will not be very pressing on Stanton and she will be able to deliver the goods.
Of late, Twitter has gained popularity as a medium for promoting the content of various media companies and Stanton’s new role will require her to oversee the various endeavors of Twitter aimed at the promotional activities. These, in turn will help the company in fetching greater volume of ad revenue going forward.
We believe that new products and services will be major growth drivers for Twitter in the long run. As spending on online advertising is expected to increase manifold compared to traditional media, we believe that Twitter has massive growth opportunity owing to its strong mobile products. International expansion and accretive acquisitions are other significant positives.
Twitter’s ability to attract advertising revenues, despite significant competition from Facebook (FB - Analyst Report) , Weibo, Yahoo (YHOO - Analyst Report) and market leader, Google, will be a key factor determining its growth. However, higher operating costs are expected to hurt profitability in the near term.
Currently, Twitter has a Zacks Rank #4 (Sell).