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Twitter CEO Jack Dorsey chose 4:05 p.m. EST on Wednesday, just after market close and at the very same moment Facebook earnings were released, to make a surprise announcement that will have major implications for Twitter (TWTR). The company will immediately “stop all political advertising on Twitter globally,” Dorsey said in a tweet-storm.
He laid out his reasoning in 10 more tweets, the most direct of which goes straight for Facebook (FB) and its CEO Mark Zuckerberg: “It’s not credible for us to say: ‘We’re working hard to stop people from gaming our systems to spread misleading info, buuut if someone pays us to target and force people to see their political ad…well...they can say whatever they want!’”
Dorsey is summing up what Facebook’s stance has been on political ads on its site, a stance it has stuck with amid a torrent of criticism from tech media and lawmakers in the last few weeks.
Removing itself from the Washington tech backlash
But Dorsey and Twitter are not just scoring points here against Zuckerberg and Facebook. The company is also attempting to remove itself from the larger discussion, and regulatory scrutiny, around tech companies policing false information on their platforms.
Twitter stock fell nearly 2% after-hours following Dorsey’s announcement, which makes sense: shareholders are obviously thinking about the ad revenue that will be lost for the company.
But by 2021, this moment, in hindsight, could look like a bold business risk that paid off.
By banning political advertising on Twitter, Dorsey is betting that come 2021, he and other Twitter executives won’t be testifying on Capitol Hill about yet another cycle of false campaign information that influenced a presidential election.
Following in the footsteps of Dick’s and Nike
In a way, Twitter’s move is not unlike recent decisions made by Dick’s Sporting Goods or Nike.
When Dick’s (DKS) last year removed assault rifles from its stores and raised its age for gun buyers to 21, the move did not go over well with conservatives, and some threatened to boycott the sporting goods chain. The stock took a hit in the short-term as well. But Dick’s CEO Ed Stack told Yahoo Finance that the shooting at Marjory Stoneman Douglas High School in Parkland, Fla., was a tipping point for him personally and for the company’s values: “When we heard the students’ rallying cry, ‘enough is enough,’ it really got to us. We felt like we had to take a stand.” Dick’s stock has rallied 25% in 2019.