Dick Costolo announced to step down effective from July 1 as Twitter CEO after five years in its rein and he will be replaced by in co-founder Jack Dorsey. Last year several top executives have left the company and its time for Costolo to replace himself.
The move comes when the company failed to show the future growth of the social media site and gain faith of Wall Street investors. The micro-blogging was struggling to boost its user base after a much-anticipated public offering in 2013.
Until search panel finds a new CEO, co-founder and Chairman Jack Dorsey will serve as interim CEO of the company while he will still remain chief executive of payments startup Square Inc. Mr. Dorsey was co-founder of the company and Twitterâ€™s first CEO, held the position from May 2007 to October 2008 until he was forced to step down. He was succeeded Evan Williams another co-founder and one of the companyâ€™s biggest shareholders.
Dick Costolo to step down as CEO, will remain on Board, and Jack Dorsey appointed Interim CEO, effective July 1
Though Costolo will spare himself from his executive position will remain in board guiding the new team. Costolo in an interview told investors
There is never, ever the right time to begin a transition like this, but you want to do these things when the org is stable and the product is robust.
From last year Twitter could not acquire user base in terms of its expectation. Currently, the company has 302 million active users worldwide which will grow 14.1 percent this year, down from 30 percent which was two years ago. In comparison Google and Facebook Twitterâ€™s mobile ad share is much lesser- the company holds 3.6 percent share of the $19.2 billion mobile Internet ad market compared to Facebookâ€™s 18.5 percent and Googleâ€™s 36.9 percent.
Rumours are also echoing around Wall Street that big companies eyeing on Twitter â€“ though the company has denied the news and stated it will work as an independent company in the future. If speculations are to be true then search engine giant Google is eyeing on Twitter which has a market capitalisation of $24 billion.
Stock market hailed the news as Twitter stock grew 7% after the news came. Twitterâ€™s revenue, which grew 74% from a year earlier to $435.9 million, fell short of its own forecasts as well as analysts predications. Twitter financial result in the first quarter disappointed its investors but the company on Thursday assured that they are expecting revenue outcome to reach from $470 million to $485 million and earnings before interest, taxes, depreciation and amortization of $97 million to $102 million.