Twitter's Dick Costolo to step down as CEO in yet another shake-up

Thu Jun 11, 2015 6:40pm EDT
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By Yasmeen Abutaleb

SAN FRANCISCO (Reuters) - Twitter Inc (TWTR.N: Quote) Chief Executive Officer Dick Costolo abruptly announced he was stepping down on Thursday amid increasing scrutiny of the company's slow user growth and inability to attract advertisers at the same rate as its competitors.

Costolo will be replaced by co-founder Jack Dorsey on an interim basis.

The company's shares jumped 7.7 percent to $38.60 following the news before paring gains to trade at $37.54.

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

Costolo said on a conference call that he announced his resignation before announcing a CEO to ensure transparency in the search process. He added that Twitter will be considering both internal and external candidates and that it has the “strongest management team (it’s) ever had,” which influenced his decision to step down.

Dorsey said the search has not begun yet, but he noted the company was looking for a CEO who uses Twitter every day and "loves" the product.

Anthony Noto, Twitter’s chief financial officer, said Costolo did not receive a severance package because he voluntarily stepped down.

Costolo said he believed scrutiny of the company would intensify if he remained CEO throughout the search process.   Continued...

Twitter CEO Dick Costolo poses on the red carpet during the second annual Breakthrough Prize Awards at the NASA Ames Research Center in Mountain View, California in this November 9, 2014 file photo. REUTERS/Stephen Lam/Files