"Twitter’s embattled chief executive will resign; Disappointment on wall Street over slow growth, ad sales" by Vindu Goel New York Times June 12, 2015
SAN FRANCISCO — Dick Costolo, Twitter’s embattled chief executive, is stepping down, the company said Thursday.
Jack Dorsey, the company’s cofounder and chairman, will serve as interim chief executive while the board searches for a permanent successor.
The change is effective July 1. Twitter shares were up more than 7 percent in after-hours trading immediately after the news was announced.
Since Twitter’s debut as a public company in 2013, Costolo has repeatedly disappointed Wall Street as the company struggled to attract new users, refine its products, and develop new forms of advertising.
Costolo’s departure will probably renew speculation Twitter is an acquisition target for the handful of tech giants that could afford the company, which has a market valuation topping $24 billion. In recent weeks, Google has been rumored to be looking at Twitter, but people with knowledge of the companies denied a deal was in the works.
“The situation at Twitter must be much worse than it appears, as replacing the CEO is such a big step,” said Brian Blau, an analyst with Gartner. “Twitter’s problems are clearly not over, and while Jack Dorsey knows Twitter well, they really should bring in some outside perspective, as most of their strategies so far are not working out so well.”
What could be wrong with Twitter?
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Pressure on Costolo grew in recent weeks after Chris Sacca, an early Twitter investor, went public with an 8,500-word analysis of what Twitter could be and how it could get there. Shortly after the essay was published on Sacca’s blog, Costolo fielded some tough questions from Twitter stockholders at the company’s annual shareholder meeting.
Sacca’s manifesto calls for a much deeper rethinking of Twitter’s service, which is still focused on 140-character text messages, to attract new users beyond the 302 million active users it reported for the first quarter.
“Twitter can afford to build the wrong things,” Sacca wrote. “However, Twitter cannot afford to build the right things too slowly.”
After Sacca posted his letter, Robert Peck, an analyst at SunTrust Robinson Humphrey, said that if Twitter’s financial results were to disappoint investors again in July, as they had for the past two quarters, “we think it’s possible that the company may look to make some changes” in leadership.
What? Twitter a piece of $hit?
Twitter said Thursday that its second-quarter financial results were on track to meet its previous forecasts.
As rumors swirled around Costolo, Twitter insiders have divided into camps regarding who should replace him. Adam Bain, who oversees global revenue and partnerships, is a particular favorite among employees, according to multiple people in the company.
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He didn't get it.
"In return to Twitter, Jack Dorsey gets his Steve Jobs moment" by Tim Higgins and Sarah Frier Bloomberg News June 12, 2015
Jack Dorsey is following in the footsteps of his Silicon Valley idol — Steve Jobs.
Named Twitter Inc.’s interim chief executive on Thursday, Dorsey returns to a job he had until being pushed out in 2008 from the firm he helped create. Similarly, Jobs returned to Apple as interim chief executive in 1997 after being forced out in 1985, and guided the company to create the iMac, iPhone, and iPad.
Dorsey, 38, demurred when asked during an interview whether he’s interested in becoming Twitter’s permanent chief. “It’s really up to the search committee and they’re going to look at internal and external candidates,” he said.
His return signals that Twitter is looking for a leader who can inspire confidence in the company’s product vision, after a slew of leadership changes in the past five years, slower growth than anticipated, and advertising efforts that have failed to gain traction.
Dorsey’s passion for Twitter, the social media company which he helped start in 2006 with Evan Williams and Biz Stone, has been evident.
The stock jumped up to 5.6 percent to $37.84 in early trading Friday after Twitter announced the leadership changes late Thursday. Shares closed Friday at $35.88, up 5 cents.
Dorsey tends to lead in terms of big ideas and grand visions. In operational meetings, he leans toward discussing philosophical positions on a product’s purpose, as opposed to going through a checklist of action items.
Much of the story of Twitter’s early days involves conflict among the founders. Dorsey’s relationship with Williams grew so strained that Williams pushed him out of the chief executive role. Dorsey kept his chairman title, but it was seen as ceremonial....
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UPDATE: Twitter’s departing CEO has no agenda for his replacement
