Twitter Names Noto CFO, Hopes For Better Wall Street Relationship

As part of a broader effort to improve investor relations, Twitter is getting a new chief financial officer.

Soon to step down is Mike Gupta -- who will assume the role of senior vice president, strategic investments at Twitter -- while Anthony Noto is in. Formerly managing director in the Technology, Media and Telecom Investment Banking Group at Goldman Sachs, Noto helped the microblogging giant go public last year. Prior to Goldman, Noto served as the CFO of the National Football League from early 2008 through late 2010.

Along with an annual salary of $250,000, Noto is getting 1,500,000 shares of Twitter common stock, which will vest over four years. Noto will also receive a one-time option grant to buy an additional 500,000 shares of Twitter common stock.

The change, expected to occur in the next 30 days, “is not related to Twitter’s previously-issued expectations,” the company noted in a filing with the Securities Exchange Commission.



With the switch, however, Twitter is no doubt hoping to improve its relationship with Wall Street.

During the first quarter of the year, the company beat analysts’ earnings estimates, but slower user growth continued to cloud its outlook. (During the first quarter, monthly active users rose about 25% to roughly 255 million -- down from the 30% user growth that Twitter reported the previous quarter.)

Analysts responded to Noto’s appointment with mixed reviews, on Tuesday.

“Though we believe marketer interest in the Twitter platform remains high, we believe the product offering needs to undergo substantial evolution if the company hopes to one day double its global user base,” Wells Fargo analyst Peter Stabler cautioned in a note to investors.

To Twitter’s advantage, “Noto brings relationships to the investor community and can offer insights into the industry given his unique experience that embodies the intersection of Internet and media,” Nomura Equity ResearchanalystAnthony DiClementesaid in a note.We also believe his experience with a live events-focused business at the NFL will translate well to the live nature of Twitter."

Marking another busy week for Twitter, the company has already expanded its app-promotion ad program, and announced the acquisition of mobile ad retargeting start-up TapCommerce.

Always a work in progress, Twitter’s executive structure has been especially fluid of late. After reportedly clashing with CEO Dick Costolo, COO Ali Rowghani recently resigned. Soon afterwards, Chloe Sladden, head of Twitter’s media unit, headed for the door.

By eMarketer’s estimate, Twitter’s usership will grow from about 43 million U.S. consumers in 2013 to just 65 million in 2018 -- or about half of Facebook’s current domestic user base.

Revenue for the first quarter grew 119% year-over-year to $250 million, which was better than most analysts’ estimates. Advertising revenue totaled $226 million -- an increase of 125% year-over-year -- while mobile ad revenue was approximately 80% of total ad revenue.

Stateside, all social media advertising revenues will grow from $5.1 billion in 2013 to $15 billion in 2018 -- representing a compound annual growth rate (CAGR) of 24%, according to a recent forecast from BIA/Kelsey.

At press time, Twitter did not return requests for additional comment.

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