In April, while preparing for what would be a disappointing
earnings report, Twitter Inc.'s Anthony Noto was startled by a
email from his boss, who was traveling in Europe.
The email from Chief Executive Dick Costolo said Mr. Noto would
immediately be taking charge of marketing, an area the social-media
company had long overlooked. It was an unusual assignment for a
finance chief, but for Mr. Costolo's top lieutenant it was par for
the course.
Weeks later, the two executives were explaining to investors why
Twitter fell short of its first-quarter revenue projections. The
company's shares dropped nearly 20% within minutes of the quarterly
report.
In less than a year on the job, Mr. Noto has spearheaded major
business deals, pushed for bold acquisitions and, most recently,
helped mold Twitter's content strategy while expanding his role to
help explain what the product does.
A former tech banker at Goldman Sachs Group Inc., Mr. Noto has
emerged as a front-runner to replace Mr. Costolo, who announced
Thursday that he would be stepping down as CEO on July 1. Jack
Dorsey, Twitter's chairman and co-founder, was named interim
chief.
Analysts, investors and those close to the company were quick to
float Mr. Noto's name as a likely successor to Mr. Costolo, along
with that of Mr. Dorsey and Adam Bain, president of revenue and
partnerships, who is credited with boosting Twitter's advertising
business.
Mr. Noto, 47 years old, isn't gunning for the CEO job, said a
person familiar with his thinking.
If Mr. Noto doesn't get the top job, the incoming CEO would have
a strong-minded No. 2 who has gained considerable power within the
company.
Mr. Noto won the confidence of management when he led Twitter's
IPO in November 2013 while at Goldman Sachs. Since joining Twitter
last July, he has impressed investors with his business acumen.
"He's one of the adults in the room," said Bill Miller,
portfolio manager of the Legg Mason Opportunity Fund, which owned
150,000 Twitter shares as of March 31.
Some current and former employees regard Mr. Noto's growing
range of responsibilities at Twitter as a power grab and also
question his pay package. Mr. Noto's compensation last year of $73
million, mostly in stock awards, topped that of CFOs at S&P 500
companies, according to S&P Capital IQ.
"The additional responsibilities Anthony has at Twitter are a
reflection of Dick's trust in him, and not of any request of
Anthony's to take them on," said Twitter spokesman Jim Prosser.
His supporters say Mr. Noto's growing influence is a natural
progression for a take-charge executive at a company some current
and former employees say is short on focus.
Former colleagues describe him as a workhorse with grand
ambitions, as when he was chief financial officer of the National
Football League from 2008 to 2010.
Mr. Noto brought the NFL out of financial turmoil and
restructured a labor deal between the 32 owners and players. But,
by his third year at the league, he grew bored, said people
familiar with the situation.
To persuade Mr. Noto to stay, NFL Commissioner Roger Goodell and
New England Patriots owner Robert Kraft indicated he would be a
strong contender to be the next commissioner, these people said.
But Mr. Noto didn't want to wait around.
Representatives of Messrs. Goodell and Kraft didn't reply to
requests for comment.
Mr. Noto returned to Goldman Sachs, where he was previously an
analyst.
Within six months he was co-head of the investment bank's
technology, media and telecommunications group.
Some executive recruiters say Mr. Noto isn't likely to become
CEO of Twitter, unless its board wants to move in a new strategic
direction.
"What the board has to do is determine where the company is
headed," said Gary Burnison, CEO of recruiting firm Korn/Ferry
International. "At Twitter, do you need an innovator, or do you
need a strategist?"
The company has long shied away from making bold changes to its
140-character public-messaging platform for fear of alienating its
core users. As a result, user growth has stalled, leaving the
company a fifth the size of Facebook Inc.
Meanwhile, its ad-revenue growth is slowing. After roughly
doubling for years, Twitter's first-quarter revenue rose a
smaller-than-expected 74% from a year earlier to $435.9
million.
For most of his first year, Mr. Noto, who still commutes weekly
to Twitter's San Francisco headquarters from his home in
Connecticut, was the only outside hire on an executive team made up
mostly of longtime Twitter employees. As such, he brought fresh
perspective.
His predilection for exhaustive debates and his tendency to play
devil's advocate has frustrated some members of his
corporate-development team, say people to close to Twitter, but it
also has instilled a degree of rigor befitting a company with a
market value of $24 billion.
Mr. Noto's stress on teamwork—carried over from his years
playing football at West Point and as an Army Ranger—has helped
executives learn to pull together at a company scarred by a
management purge. In Twitter's first year as a public company Mr.
Costolo lost or replaced five direct reports. The company also had
three heads of product that year.
Mr. Noto often fires off call-to-arms emails loaded with
expressions like, "Play for the name on the front of the jersey,
not the back." That collaborative approach has earned him respect
since he joined Twitter, said people close to the company.
That's partly why Mr. Costolo has given him ever-increasing
responsibility. Mr. Noto spearheaded Twitter's search deal earlier
this year with Google Inc., which is expected to drive more traffic
to the platform.
When Twitter's board and executive team gathered in California's
Napa Valley this year to discuss whether to pursue a $1 billion
acquisition of newsreader app Flipboard, Mr. Costolo recommended
the startup's team report to Mr. Noto, said people familiar with
the matter. Twitter ultimately passed on the deal.
"He has superhigh bandwidth," Mr. Costolo said at a tech
conference in May. "We didn't bring him in to just be a CFO."
Justin Baer, Kirsten Grind and Kimberly S. Johnson contributed
to this article.
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