Although Twitter CEO Dick Costolo had already announced internally at the end of last year that he would soon leave his post, Costolo’s resignation yesterday was anything but expected. Twitter is overflowing with #ThankYouDickC tributes by colleagues still in shock. Two years of stalled user growth and a storm of controversy about trolls got the best of him in the end.
Twitter posted a revenue of $436 million, up 74 percent, year-over-year, but that was below Twitter’s projected revenue range of $440 million-$450 million. The social media giant saw a net loss of $162 million on the quarter, which was attributed to “lower-than-expected contribution from its newer direct response products.” Six weeks ago, its shares had gone down 18 percent following weak earnings in Q1.
So what’s next? Costolo is set to leave on July 1 without any severance. Co-founder Jack Dorsey will take over on an interim basis until a search committee chooses a new candidate. A popular candidate, according to USA Today, is Adam Bain, a longtime media executive who runs global revenue and partnerships at Twitter.
What's next for Twitter?
In April, a new wave of rumors had it that Google was looking into buying Twitter. Consequently, the social media company’s shares went up almost 5 percent. So, logically, that rumor could very well transform into reality sooner rather than later. But both Dorsey and Costolo were adamant about not changing the social media’s current strategy. This might not please shareholders, who see in Costolo’s exit a possibility to move things around.
The New York Times reports that Costolo’s relationship with Wall Street was becoming weary, similarly to Jack Ma’s – Alibaba CEO and founder who confessed last week that if he were to do things again, he would not go public. And although the former Twitter CEO says he was not pressured into leaving, one can only wonder. After Costolo announced he was leaving, Twitter’s stocks went up 7 percent. It now declined by 4 percent according to TechCrunch, but the resignation was clearly seen as a positive move by its shareholders.
Plus, Costolo’s announcement comes only a week after one of Twitter’s main individual investors and supporters (who has had stock in Twitter for nine years) – Chris Saca - posted a long post on the changes Twitter should be making. He even said that Twitter would be an instant fit for Google. Costolo, who will remain on the Board of Directors, says he's confident Twitter can thrive as an independent company, adding that "the focus right now is on maximizing Twitter's value and its broad impact as an independent public company."
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