Tuesday, October 5, 2010

Skype and Twitter "Do the CEO Shuffle"

The latest dance craze sweeping the tech world is, "Do the CEO Shuffle" with two notable and high profile positions being filled yesterday at Skype and Twitter. While this is not a new dance step, and actually it's quite well known in many industries, it's interesting that these two appointments fall on the same day. Both companies have enormous user bases and each are on a major roll.

So what it so interesting about Skype's new CEO announcement?

According to Erick Schonfeld who broke the news, Skype appointed Cisco SVP Tony Bates as CEO to replace Skype's current CEO Josh Silverman. Bates had been running Cisco's Enterprise, Commercial and Small Business Group, which accounted for 80 percent of Cisco's annual revenue worth $30 billion. Bates is the second Cisco executive to jump ship following Dr Jonathan Rosenberg who left Cisco last November to become Skype's CTO.

Schoenfeld said:
"The company recently filed to go public in August. And while there were rumors that a company like Cisco might buy it, adding a new CEO at this time points more strongly in the direction of an IPO. The earlier Cisco rumors now make sense. Cisco wasn’t trying to buy Skype. Rather, Skype was trying to hire the guy who runs most of Cisco."

In the press release Bates noted that Skype is both a powerful brand and global leader in Internet communications, and said:
"There are extraordinary opportunities ahead for Skype and I am eager to lead the company through this exciting juncture in its continuing transformation. I look forward to working with Skype’s management team and talented employees to engineer the next wave of game-changing products and services for our users.”
As Skype makes a serious move into the enterprise, and is on track to exceed $1 billion in revenues in 2011. Skype has over 560 million registered users and averages 124 million active users a month, but only 8.1 million of them actually pay for the service. Last week, Kara Swisher reported that Skype and Facebook are readying a deep integration partnership, that would include SMS, voice chat and Facebook Connect.

According to Om Malik:
"Bates’ hiring is indicative of three things:
  1. Skype is dead serious about an initial public offering (IPO).
  2. The company isn’t looking to sell out anytime soon.
  3. Skype is about to make a deeper push into carrier and enterprise markets."

And what about Twitter's new CEO?

As Twitter CEO for the last two years, Evan Williams noted the amazing growth of Twitter from 3 million registered users when he took job to more than 165 million. He cited the success of his brainchild, the New Twitter, as the main reason he is stepping down as CEO. He's appointed Twitter's COO, Dick Costolo, to succeed him as Twitter’s CEO starting today, so that he can focus completely on product strategy.

Williams and Costolo have been friends for years, and actually have switched roles sometime back with Williams returning to his software development roots and Costolo working on business development, revenue and other campaigns. Costolo is a three-time CEO and most recently helped found Feedburner, which was sold to Google. Costolo will oversee Twitter's day-to-day business functions and further expansion.

According to Fred Wilson, a VC who is also on Twitter’s board, said it's a very smart and gutsy move Williams' part, and that Costolo was “more of a manager, more of an executive, more of a businessman” than Williams.

Read more here: Evan Williams of Twitter Steps Down as Chief - NYTimes.com