News Information and Media Site: Byers Market: Jack Dorsey's friends and foes; Jeffrey Katzenberg's 90-day trial

March 9, 2020

By DYLAN BYERS in Los Angeles &

AHIZA GARCÍA-HODGES in San Francisco

Good morning.🎙️ Coming attractions: This week on The Byers Market Podcast I talk to Adam Mosseri about Instagram and its influence on society, as well as his feelings on Facebook, TikTok, Snapchat and Quibi. The pod will be available Wednesday.

✈️ PSA: The Milken Global Conference in Beverly Hills has been rescheduled to July 7-10 due to coronavirus. Heads up: That's the same week as the Allen & Co. Conference in Sun Valley.

Join the Market: 🗞️ Newsletter | 🎙️ Podcast

Prakash Singh/Getty

Bird Hunt

Jack Dorsey's friends and foes

Moving the Market: Jack Dorsey is still trying to fend off Elliott Management's hostile effort to oust him from Twitter and install a new CEO. The two sides will continue negotiations over the direction and management of the company this week.

• The big picture: Dorsey is vulnerable. He does not have a controlling stake in Twitter. He has overseen tepid revenue growth. And he is dividing his CEO duties between Twitter and Square — a point of contention for the team at Elliott.

The latest: In an essential new piece from The Information, Kevin Dugan, Alex Heath and Jessica Lessin say Dorsey may get some unsolicited support from Twitter's biggest shareholders, like Vanguard (10.4 percent stake) and BlackRock (7 percent stake):

• "Elliott... has already tried to persuade a handful of Twitter's largest investors that Dorsey's part-time status is bad for shareholders, and partners have been soliciting ideas for new directors."

• "A board takeover may be a tough sell. Twitter's largest institutional investors, like Vanguard and BlackRock... don't see its current problems as too big for the current management to handle."

• "One cohort is likely to be on Elliot's side: hedge fund investors, which move in and out of stocks much faster. ... They own more than 10% of Twitter's stock."

What's next:

The Information's report says "Elliott doesn't necessarily want [Dorsey] gone," and that if he "can devote himself full time to Twitter and focus on revenue growth, Elliott... may not push for his ouster."

• Our understanding is that while Elliott could conceivably be OK with a scenario in which Dorsey says on, their ideal outcome would be to have him leave. More on that here.

Bloomberg/Getty

Future of Speech

Twitter tests 'manipulated' tag

Big in the Bay, big in the Beltway: Twitter has applied a new "manipulated media" label "to a deceptively edited video of... Joe Biden... shared by White House social media director Dan Scavino and retweeted by President Trump," WaPo's Cat Zakrzewski reports.

• "The video was the first test of a new policy... to label tweets that contain manipulated or synthetic media."

• "The altered video of Biden... [had been] edited to make it appear as if Biden inadvertently endorsed Trump for reelection."

The big picture: "Tech platforms have written new and diverging rules on political speech," NYT's Cecilia Kang writes. While Twitter tagged the video as manipulated content, "Facebook left the video intact without any flags about the false content."

😷 Coronavirus Watch 😷

Tim Cook has given Apple employees at most locations the opportunity to work from home due to the coronavirus outbreak, which he described as an "unprecedented event."

• And you've no doubt heard by now, but SXSW is officially cancelled.

Bloomberg/Getty

The Quibi Hustle

Jeffrey Katzenberg goes 90

Talk of Tinseltown: Jeffrey Katzenberg has announced a free 90-day trial for Quibi subscribers in a bid to sweeten the deal for his new subscription-only mobile video service. He also unveiled the 50 shows and movies that will be available at launch on April 6.

• The big picture: Katzenberg's biggest challenge will be getting people to pull out their credit cards and pay at least $4.99 a month ($7.99 without ads) for short-form videos when they already get that for free on YouTube. The 90-day trial will give him a big initial boost. NBCUniversal, the parent company of NBC News, is an investor in Quibi.

The big question: What happens after the 90-day trial? Will people have been so impressed by the slate of shows (many of them tied to celebrities) that they stick around? Will the "daily essentials" (news, sports, etc.) become a routine that people can't live without?

• The answer: It's anyone's guess. As Barry Diller told me on last week's Byers Market Podcast, Quibi is "a total speculation," and Katzenberg is "naked out there... waiting for the tide to either come towards him or leave him naked on the beach."

Market Links

• Global markets plunge on oil war, coronavirus (WSJ)

• Coronavirus misinformation stumps social media (NYT)

• Rajeev Misra has no plans to leave the Vision Fund (CNBC)

• Ren Zhengfei eyes 20% smartphone sales drop (Information)

• Jamie Dimon's health threatens China plans (Bloomberg)

Matt Winkelmeyer/Getty

New Beats

Lydia Polgreen joins Spotify

Revolving door: Huffington Post editor-in-chief Lydia Polgreen is joining Spotify as the head of content for Gimlet, one of the several podcast platforms now owned by the Swedish audio giant.

• The big picture: Spotify is spending big to dominate the podcast space. In the last year or so, it has acquired Gimlet, Parcast and The Ringer, as well as Anchor, the podcast creation app.

Jean Baptiste Lacroix/Getty

Shelved

Hachette drops Woody Allen

Moving Manhattan: Woody Allen's autobiography has been dropped by Hachette Book Group after employees staged a walkout last week in protest of the book's publication.

• Allen has faced allegations of child molestation but hasn't been charged with a crime. He has denied any wrongdoing.

The Reax: Ronan and Dylan Farrow, Allen's son and daughter, had both criticized Hachette's initial plan to publish Allen's book. Ronan Farrow called it "a betrayal."

• Stephen King said Hachette's decision made him "very uneasy," adding: "I don't give a damn about Mr. Allen; it's who gets muzzled next that worries me."

What's next: It's unclear if Allen's book will find a publisher. Last year, NYT's Alexandra Alter and Cara Buckley reported that his agent had approached several publishing houses to gauge interest in the memoir and came away without any offers.