Connect with us

Company News

Twitter chairman keeps calm in chaos of Musk’s bid to scrap deal

At a technology conference in June, Bret Taylor, the mild-mannered co-CEO of tech behemoth Salesforce Inc., was losing his patience. Taylor had joined the conference to talk about the future of work, but the moderator kept asking about Twitter.

Taylor declined to discuss his side gig as chairman of Twitter Inc. With a $44 billion acquisition on the line, he said it would be inappropriate to comment. Yet the moderator kept pressing: What are the chances that Elon Musk goes through with his agreement to buy the beleaguered social network? Has the deal stalled? Is it possible you’ll end up in the courts? With each question, Taylor’s grimace became more pronounced.

“Again—we intend to close the transaction and enforce the merger agreement,” he said, before successfully changing the topic.

In simpler times, the VivaTech conference in Paris could have been a triumphant moment for Taylor, just seven months into his tenure atop Salesforce, alongside billionaire Marc Benioff. The 42-year-old’s resume includes co-creating Google Maps, inventing the “Like” button, founding and then selling two companies, and driving Salesforce’s largest acquisitions.

But his role at Twitter has placed him at the center of the most visible dispute in business, opposite would-be acquirer Musk, 51, the world’s richest man and CEO of Tesla Inc. and SpaceX. Taylor has been trying to say as little as possible as Musk heckles Twitter publicly and privately. But his actions speak volumes: Under Taylor’s leadership, the company sued Musk to enforce the contract after he changed his mind about buying the social network.

There’s little reason for optimism that the deal, reached in late April, will go well for Twitter, however it shakes out. If the company wins, it ends up owned by a man who doesn’t want it, and whom Twitter’s lawyers have portrayed in court as a manipulative liar. If Twitter reaches a settlement to end the dispute, Taylor and other board members could be sued by shareholders for breaching their duties by foregoing the $54.20-per-share acquisition price Musk committed to, which was approved by investors at a meeting earlier this week.

Against this chaotic backdrop, Taylor has been Twitter’s deal quarterback, passing information between bankers, advisors and directors while trying to project a calmly professional demeanor. It’s up to corporate boards to approve acquisitions, which explains why it’s been Twitter’s board chair taking on many key responsibilities alongside chief executive officer Parag Agrawal.

These duties include dealing with Musk, who has sent updates and threats directly to Taylor, sometimes over text, according to legal filings. In late March, Musk told Taylor that he could build a competing service if he didn’t get what he wanted at Twitter. Days before the acquisition was finalized in April, Musk promised Taylor he would initiate a hostile takeover—also known as a tender offer—if his $44 billion offer wasn’t accepted, according to filings in Twitter’s lawsuit against Musk. (A week earlier he had mockingly tweeted “Love me Tender,” a wink at his potential takeover strategy.)

It’s Taylor who fielded Musk’s advances, and now it’s Taylor who is serving as the public face of the company as it forces him to a courtroom. Both executives declined to comment for this story.

Taylor is known—in life and business—for being low-key, polite and by-the-book, according to conversations with 17 associates and friends. That puts him in stark contrast to the man sitting on the other side of the negotiating table. While Taylor has been saying “no comment,” Musk has given the media, and Twitter’s lawyers, plenty of material to work with. He’s posted memes hinting at his intentions, taunted Twitter’s executives and polled the public on Twitter’s future.

There was the time Musk tweeted a poop emoji at Agrawal, or challenged him to a public debate about bots. Musk’s posts were cited in Twitter’s lawsuit against the tech mogul, and will undoubtedly appear in the Delaware Court of Chancery come October, when the two sides are set for a trial.

Taylor, meanwhile, has sent only seven Tweets about the Musk entanglement, each time a sober update clearly vetted by lawyers, in a feed otherwise filled with smiling group photos, sports commentary and Salesforce product updates. He’s publicly refuted Musk’s claims about bots and spam and repeated the social network’s mantra about enforcing the deal in court.

Friends and colleagues say Taylor is suited for the role of calm intermediary—he’s efficient, has technical knowledge and deals experience, and works well with strong personalities. He’s sold multiple companies, and worked near the top of other tech giants over the past two decades, quietly becoming invaluable to A-list CEOs like Benioff and Meta Platforms Inc.’s Mark Zuckerberg. Part of why he functions so well in those situations is that Taylor is just fine operating behind the scenes, without seeking credit or the limelight, said one person at Twitter who works with Taylor. He has developed healthy coping mechanisms, like a new habit this year of doing 100 push-ups a day.

Taylor trotted a familiar path on his way to Twitter’s board. After graduating from Stanford during the dot-com bust of the early 2000s, he landed at Google, where he co-founded Maps and made a group of friends now composed of senior tech executives and unicorn founders who still play poker together.

After Google’s IPO, Taylor left to create FriendFeed, a social-media startup, which built the now-ubiquitous “Like” button. Funding eventually dried up, and Taylor negotiated a sale to Facebook over a weekend in 2009, while Twitter also angled to buy the startup. The fire sale hurt his pride as a founder but gave him two new mentors—Zuckerberg, whom he reported to as CTO, and another ex-Googler, Sheryl Sandberg, who built Facebook into an advertising behemoth. Taylor has said Facebook is where he learned to be a manager, and he got a front-row seat to several lightning-fast acquisitions, including the $1 billion Instagram takeover in 2012.

When Facebook had to answer for early privacy controversies, the company sent the affable Taylor to Washington to testify before US Senators. Years later, he has said he still feels loyalty to Facebook and its leadership.

Taylor’s composure stems from his stable upbringing, friends say. His mother was a Chevron Corp. executive, eventually retiring to run wine country tours, and his father was a mechanical engineer who often had computers set up around the house. Both went to Stanford. Yearbook photos from high school in the 1990s show Taylor was a long-distance runner, wore a grunge band T-shirt and had long hair. Today, he lives with his wife and three kids a few miles from his own parents.

After Facebook went public, Taylor again ditched his flashy big-company gig. This time he pivoted to enterprise software and co-founded Quip, a company that let people collaborate on documents in the cloud, at a time when the norm was saving files on a personal computer.

He also accepted his first board seat, at Axon Enterprise Inc., maker of Taser stun guns and police body-cameras. That role gave Taylor his first lessons in boardroom diplomacy. When Axon’s directors had disagreements, Taylor was able to re-frame the issue in simple language and move things forward, said Axon chief executive officer Rick Smith. “Bret would be the guy that would say, ‘OK, let’s pause for a second, take the emotion out of this, and let’s just put the factors on the board.’” Hadi Partovi, an early investor in blue-chip firms like Uber Technologies Inc. and Airbnb Inc. who was also on the Axon board and recruited Taylor, recalls that Taylor was preternaturally wise. “I think he was probably the youngest member of the board but also the one that folks most wanted to hear from,” he said.

Quip never gained mass adoption, but had one huge fan—Salesforce’s Benioff. In 2016, the startup had plenty of cash in the bank, but Benioff made an offer that Taylor couldn’t refuse—$750 million for a company that had raised less than a 10th of that. “Marc—if you’ve ever met him—is a really charming salesperson and convinced us,” Taylor said in a podcast appearance last year. “The price tag was, you know, motivational as well.”

The acquisition was widely seen as an expensive recruitment play. Benioff had been mentoring Taylor for years by that point, and had attended many of the dinners Taylor regularly hosted with prominent company leaders, venture capitalists and entrepreneurs. After the deal, some within Salesforce took to calling Taylor “the 750-million-dollar man.”

Taylor’s software wasn’t immediately embraced at Salesforce. The service was said to be so clunky at times that workers joked they were caught in “Quipsand.” Some had reservations about Taylor, too, especially after he was so quickly elevated to a senior leadership role. Salesforce was primarily driven by a sales and marketing culture, and some staffers questioned whether the engineer and product expert could be the kind of bombastic evangelist that Benioff is. One former employee distinctly remembered Taylor’s folksy manners, incorrectly believing that Taylor had grown up in Indiana. (He was actually born in Oakland.)

But Salesforce employees came around to Taylor’s quiet confidence—he’s picked up many responsibilities from his mentor over the years, stepping up for keynote speeches, TV appearances, and company all-hands presentations. Every Monday, he leads a three-hour executive check-in, and he often personally calls CEOs to close deals, Salesforce chief product officer David Schmaier said in an interview. He’s also taken over delivering hard news, such as when he told protesting employees that the company wouldn’t cut business ties with the National Rifle Association after the school shooting in Uvalde, Texas.

Chief marketing officer Sarah Franklin said she’s seen Taylor become more relaxed and confident over time with the knowledge that he has built the loyalty of the company. “I don’t think our leadership team has ever been more aligned and communicative,” she said.

His rapid ascent at the company is in large part due to his close relationship with Benioff, said many of the people interviewed for this story. The relationship works because the two are so different and “Bret doesn’t want to be Marc,” said someone who has worked for them both. “People who want to be Marc can’t always work with Marc.”

Taylor has even taken on the responsibility Benioff may be most famous for: acquisitions. He played a key role on the company’s three largest mergers, Slack, Tableau, and MuleSoft, worth a combined $50 billion. “Between Facebook and Salesforce, I’ve acquired as many companies as probably most people you meet at this stage,” Taylor said in a 2021 interview with Greylock Partners, a VC firm that invested in Quip.

Benioff was so impressed with Taylor when he bought Quip that he made an exception to his usual aversion to outside corporate boards. Benioff himself hasn’t been on one since leaving Cisco Systems Inc.’s in 2014. Former Salesforce SVP Niki Christoff said she was fired from the company for taking an outside board membership in 2020. Just weeks before the Quip deal was announced in 2016, Taylor had joined Twitter’s board, and Benioff let him remain after the deal closed.

It was Twitter, after all. How much work could it be?

Within months of joining the board, Taylor had a front-seat to chaos. First, the company was itself on the block, holding discussions with several suitors including Salesforce, Disney and Google. Those talks fizzled out and Twitter remained independent.

A few years later, in early 2020, activist investors Elliott Management showed up at Twitter’s doorstep, forcing their way onto the board and pushing for changes to its governance structure, taking aim at co-founder and CEO Jack Dorsey. While Dorsey kept his job in the immediate wake of a settlement with Elliott that included specific growth and revenue goals, he resigned some 18 months after Elliott showed up. Dorsey was among those who wanted Taylor to take over as chairman, according to a person familiar with the situation, and he assumed the role in November as Dorsey left the board.

Taylor was one of the first people Musk spoke with as the billionaire became Twitter’s largest shareholder. When the company learned of his stake, it was Taylor who helped negotiate Musk’s board seat, and who first received the news that Musk had changed his mind about joining the board. When Musk offered Twitter’s directors $54.20 a share to buy the company on April 13, his offer letter was addressed to Taylor, and the two stayed in contact until Twitter accepted his bid almost two weeks later.

It was a whipsaw process, but Taylor had hashed out similar large M&A deals before, both as a buyer and as a seller, giving him the advantage of “pattern recognition,” said the Twitter source who has worked with Taylor. He understood when Twitter should seek counsel, and when decisions needed to be made quickly, said the source, bringing a “comfort level and sophistication” to the process.

On the day Twitter accepted Musk’s offer, Taylor solemnly addressed staff alongside Agrawal, explaining why the board decided to sell. Mostly, he defined “fiduciary duty” multiple times, explaining that his legal responsibility was to deliver high returns to shareholders. One employee asked if the deal could fall apart. Taylor wasn’t worried; he said that the board had taken steps to mitigate risks, which were mostly financial or regulatory. Perhaps he never suspected that Musk might just change his mind.

It was supposed to be a clean exit. Taylor told employees that Twitter’s board, and thus his job as chairman, would no longer exist under Musk’s ownership. Taylor, who has been so adept at reading such situations in the past, had apparently misjudged Musk’s capacity for mischief-making, and Twitter’s unique ability to find drama and foist its leaders into highly public no-win situations.

If the deal falls apart, Taylor and the rest of Twitter’s board will undoubtedly be second-guessed for brokering a deal in the first place with Musk, a man who used the deal’s per-share price to make a weed joke.

“The situation he’s dealing with is not being fought just in the court of law,” said tech investor Partovi, “but also the court of public opinion.” Bloomberg

Click to comment

You must be logged in to post a comment Login

Leave a Reply

Copyright © 2022 Communications Today

error: Content is protected !!