News Digest

Twitter CEO Costolo bows out as growth pressure mounts

Twitter chief executive Dick Costolo surrendered his post Thursday, handing the reins back to co-founder Jack Dorsey as the popular service struggles to boost the ranks of users. The shake-up comes amid rumors that Costolo was under tremendous pressure from investors to prove his worth, due to his inability to attract advertisers at the same rate as its competitors. Industry tracker eMarketer estimated that the number of people using Twitter monthly will grow 14.1 percent this year, compared to a growth rate of 30 percent two years ago. By 2019, Twitter user growth will slow to about six percent worldwide.

Unfortunately this news isn’t surprising. The bottom line is that Twitter isn’t very good right now at serving either its users or its marketers.

Nate Elliott of management consultant Forrester Research

Costolo will step down on July 1 and will continue to serve on the board, the company said in a regulatory filing. He guided the San Francisco-based firm through its initial public offering, but the company has yet to show a profit. Twitter said it formed a committee that will work with “a leading executive search firm to assist in conducting a global search which will consider both internal and external candidates” for CEO. In its latest earnings report, in April, Twitter said it had a net loss in the quarter of $162.4 million.