Dick Costolo resigns as Twitter CEO effective July 1st
Jack Dorsey will take over on an interim basis, Twitter stock shoots up over 7% on the news
I can't say that it's too much of a surprise considering the direction that Twitter has been going in ever since it went public, but news like this is always at least a little bit of a shock.
After months of pressure from investors over falling user numbers, and numerous people calling for his head, Twitter CEO Dick Costolo announced on Thursday that he is stepping down from the position effective effective July 1st.
“I am tremendously proud of the Twitter team and all that the team has accomplished together during my six years with the Company. We have great leaders who work well together and a clear strategy that informs our objectives and priorities," Costolo said in a statement.
His replacement has already been named: Jack Dorsey, Twitter's Co-Founder and Chairman of the Board, will step up on an interim basis. It should also be noted that Costolo will not be leaving Twitter entirely, as he will continue to serve on the company's Board of Directors.
"There is no one better than Jack Dorsey to lead Twitter during this transition. He has a profound understanding of the product and Twitter's mission in the world as well as a great relationship with Twitter's leadership team," said Costolo. "I am deeply appreciative of the confidence the Board, the management team and the employees have placed in me over the years, and I look forward to supporting Twitter however I can going forward.”
Twitter’s Board has formed a Search Committee to find permanent CEO, which is being chaired by the Board’s Lead Independent Director, Peter Currie, and includes Peter Fenton and Evan Williams.
It seems unlikely that Dorsey will be taking the job at Twitter permanently, as he will continue to be the CEO of Square, the payment company he co-founded.
“The future belongs to Twitter thanks in large part to Dick Costolo’s dedication and vision. Dick has put a world-class team in place and created a great foundation from which Twitter can continue to change the world and grow," Dorsey said in a statement. "We have an exciting lineup of products and initiatives coming to market, and I look forward to continuing to execute our strategy while helping facilitate a smooth transition as the Board conducts its search.”
Twitter has seen stagnating user numbers over the last few quarters. After the company missed badly in its Q1 2015 earnings, with advertising revenue coming in much lower than expected, Twitter shareholder Chris Sacca wrote a scathing blog post in which he blamed the company, without naming Costolo directly, for not having a bold enough vision to impress Wall Street.
"Trying to pin blame on anyone for why Twitter hasn’t made these moves sooner is unproductive. I want Twitter to press forward. I am glad to say there are positive signs that Twitter is once again becoming an organization that can and will ship innovation," he wrote.
"Despite that, my biggest concern is the abundance of public doubt and misunderstanding when it comes to Twitter’s vision and the near future for the service. It’s hard to blame Wall Street or the press. Twitter has failed to tell its own story."
Investors already seem happy with the move, as Twitter stock is now up over 7% in after hours trading, after dropping 0.06% to $35.83 a share during regular trading on Thursday.
(Image source: allthingsd.com)
Related Companies, Investors, and Entrepreneurs
Startup/Business
Joined Vator on
What is Twitter?
Twitter is an online information network that allows anyone with an account to post 140 character messages, called tweets. It is free to sign up. Users then follow other accounts which they are interested in, and view the tweets of everyone they follow in their "timeline." Most Twitter accounts are public, where one does not need to approve a request to follow, or need to follow back. This makes Twitter a powerful "one to many" broadcast platform where individuals, companies or organizations can reach millions of followers with a single message. Twitter is accessible from Twitter.com, our mobile website, SMS, our mobile apps for iPhone, Android, Blackberry, our iPad application, or 3rd party clients built by outside developers using our API. Twitter accounts can also be private, where the owner must approve follower requests.
Where did the idea for Twitter come from?
Twitter started as an internal project within the podcasting company Odeo. Jack Dorsey, and engineer, had long been interested in status updates. Jack developed the idea, along with Biz Stone, and the first prototype was built in two weeks in March 2006 and launched publicly in August of 2006. The service grew popular very quickly and it soon made sense for Twitter to move outside of Odea. In May 2007, Twitter Inc was founded.
How is Twitter built?
Our engineering team works with a web application framework called Ruby on Rails. We all work on Apple computers except for testing purposes.
We built Twitter using Ruby on Rails because it allows us to work quickly and easily--our team likes to deploy features and changes multiple times per day. Rails provides skeleton code frameworks so we don't have to re-invent the wheel every time we want to add something simple like a sign in form or a picture upload feature.
How do you make money from Twitter?
There are a few ways that Twitter makes money. We have licensing deals in place with Google, Yahoo!, and Microsoft's Bing to give them access to the "firehose" - a stream of tweets so that they can more easily incorporate those tweets into their search results.
In Summer 2010, we launched our Promoted Tweets product. Promoted Tweets are a special kind of tweet which appear at the top of search results within Twitter.com, if a company has bid on that keyword. Unlike search results in search engines, Promoted Tweets are normal tweets from a business, so they are as interactive as any other tweet - you can @reply, favorite or retweet a Promoted Tweet.
At the same time, we launched Promoted Trends, where companies can place a trend (clearly marked Promoted) within Twitter's Trending Topics. These are especially effective for upcoming launches, like a movie or album release.
Lastly, we started a Twitter account called @earlybird where we partner with other companies to provide users with a special, short-term deal. For example, we partnered with Virgin America for a special day of fares on Virginamerica.com that were only accessible through the link in the @earlybird tweet.
What's next for Twitter?
We continue to focus on building a product that provides value for users.
We're building Twitter, Inc into a successful, revenue-generating company that attracts world-class talent with an inspiring culture and attitude towards doing business.
Dick Costolo
Joined Vator on