Twitter’s Chief Executive Officer Dick Costolo made a surprise announcement on Thursday that he would leave his post on July 1. The company’s shares rose by 3.6 percent to $37.17 following the announcement. The increase reached nearly 6 percent in late trading.
“I personally felt like the scrutiny of the company would intensify if I remained CEO while the search process was ongoing,” Costolo said.
“I felt like it would be a distraction for the company, and didn't think it would be in anybody’s interest to have that distraction.”
Investors have been criticising Costolo for several months and have asked him to step down. The Wall Street Journal has portrayed him as “a reactive thinker who bounces from one idea to the next.”
During Costolo’s leadership Blue Bird lost many top talents, including Product Vice President Michael Sippey, Creative Director Doug Bowman, Engineering Vice President Chris Fry, Chief Operating Officer Ali Rowghani, Engineering Vice President Jeremy Gordon, and Head of News Vivian Schiller.
The blue bird’s co-founder Jack Dorsey will lead the company until a new CEO is appointed while Costolo is to remain in the board of directors and CEO of Square.
Dorsey told Reuters that he doesn’t want to become a permanent CEO “at all,” adding that it was “super early” in process to find a new CEO, and he had yet to find a recruiting firm.
“We're looking for someone who really uses and loves the product,” Dorsey said.
Serving as Twitter’s CEO between May 2007 and October 2008 Dorsey also said that he doesn’t anticipate any change in the company’s strategy or direction.
“I believe in the course the company is on and the management team's ability to fulfil that and execute on it,” Dorsey, who is also board chairman, said during a joint conference call with Costolo and Wall Street analysts.
According to eMarketer, a company researching insights and trends in digital marketing, Twitter now owned 1.6 percent of the $50.7 billion US digital advertising market in 2014, compared with 1 percent in 2013. During the same period, Facebook’s share increased from 7.6 percent to 10.4 percent.
Twitter’s shares have lost 20 percent of their value since November 7, 2013 while Facebook’s value has risen 72 percent, Google’s value 9 percent and Yahoo’s value 27 percent.
One of Twitter’s earliest investors, Chris Sacca, posted a manifesto earlier this month. While he praised the acquisitions of Periscope and TellApart, Sacca underlined the company’s failure to engage with users, saying that one billion users had tried Twitter and left the service.
“In under five years as CEO, @dickc grew Twitter from a $3b valuation to a $23b valuation. Credit where credit is due,” Sacca tweeted on Thursday.
In a recent CNBC interview, Sacca hinted that Google should acquire Twitter, saying that the company would be an “instant fit.”