Twitter loses Dick Costolo as CEO, Jack Dorsey steps in

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Twitter website

Twitter’s chief executive Dick Costolo has suddenly announced he is stepping down amid increasing scrutiny of the company’s slow user growth and its inability to attract advertisers at the same rate as most of its competitors.

Twitter CEO Costolo replaced by Jack Dorsey

Costolo will be replaced by co-founder Jack Dorsey, but only on an interim basis. According to sources, it was Costolo’s own decision to leave, and he said he had brought it up with the board last year as the company started talking about succession planning.

Twitter has had several management shake ups. Co-founders Jack Dorsey and Evan Williams have both served as CEO before Costolo, and Costolo himself has overhauled much of the management team over the past year.

“Unfortunately this news isn’t surprising”, said Nate Elliott of Forrester Research. “The bottom line is that Twitter isn’t very good right now at serving either its users or its marketers”.

Twitter CEO Dick Costolo
Outgoing Twitter CEO Dick Costolo.

Costolo said on a conference call that Twitter will now look at internal and external candidates for the next CEO and that it’s had the strongest management team it’s ever had. That influenced his decision to step down. In a statement, he said that he was tremendously proud of his six years at Twitter.

In an interview with Reuters, Dorsey said he was not considering remaining the permanent CEO because the search has just begun, though he did not rule out the job. He also said that he didn’t expect any change in Twitter’s overall strategy. He was ousted by management in 2008, but Dorsey said he is surrounded by a strong executive team and had learned from his experience running Square.

Dorsey said the company was looking for a CEO who uses Twitter every day and loves the product. He continues to act as CEO of Square. He had also served as president of Twitter and CEO from May 2007 to October 2008.

The Street has reacted positively to the news, as the company’s shares rose to $37.17, up 3.6%, after the announcement, meaning that Twitter is worth $900 million more without Costolo than with him at the helm.

SOURCE: Reuters.

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