Costolo will be replaced by Jack Dorsey as interim CEO

Jun 12, 2015 06:54 GMT  ·  By

Dick Costolo has announced he will be stepping down from his position as Twitter CEO, effective July 1, 2015. The decision was made known through a letter to his staff and an official press release.

The news came as a big surprise since Twitter stock has been going steady for months, but the reasons behind his decision are already rumored to be related to the company's struggle to improve its advertising market share, which is way under Google's and Facebook's.

According to Bloomberg, Costolo will leave without any severance pay and he will also forfeit all unvested equity capital.

In the email sent out to employees, obtained by the Wall Street Journal, Mr. Costolo clearly states that the decision to step down was his own.

Jack Dorsey to serve as interim CEO

To replace Costolo, who will remain on the Twitter Board of Directors, the company has brought back one of its founding members, Jack Dorsey.

Dorsey was the company's first CEO and a current member of the Board of Directors, but he currently spends most of his time leading his new startup Square, Inc., where he also serves as CEO.

To help find a new chief executive officer, the Board of Directors also put together a Search Committee, led by Peter Currie (former Netscape CFO), which also includes Peter Fenton (General Partner at Benchmark) and Evan Williams (Blogger & Twitter founder).

After the announcement, the Twitter Board of Directors held a live conference call with the media, which is also available online.

Following the news that Costolo will be replaced by Dorsey as Twitter's CEO, the stock market responded with a 10% rise for Twitter's stock price.

What will the new CEO have to fix?

First off, he should make the social network easier to use. It's quite hard to find anything useful on Twitter these days unless you're online when it happens.

Secondly, user abuse and harassment has gotten out of hand, which was never more clear than in the recent #GamerGate scandal.

Twitter's total user count has also been either stagnating or growing very timidly. The company needs more users, especially if it wants to cross the 1 billion mark which Facebook and Google have already surpassed.