An important C-suite reshuffle is taking place in the world of social networking sites, and it may offer a glimpse into the future of the industry as a whole.
On July 1st, co-founder and chairman Jack Dorsey retook the helm as CEO at microblogging platform Twitter, a position he previously held until 2008, when he was fired. Upon making the announcement, Dorsey and outgoing CEO Dick Costolo insisted the move had nothing to do with the company’s performance.
However, Costolo has been under mounting pressure since Twitter went public in 2013 in a much-publicized IPO. The company has struggled with growing its active user base, which, at 302 million globally, is only a fraction of Facebook’s 1.4 billion users and has yet to become profitable.
“There is a sizable mismatch between Twitter’s global brand and how the company is performing,” says Brian Blau, research director for mobile, wireless and consumer technologies at Gartner, an IT research and advisory firm. “Twitter growth hasn’t been able to match other social app experiences—for example, messaging, which has expanded substantially in the same time frame that Twitter hasn’t.”
As the search for a new CEO gets under way, Dorsey will be interim CEO. Dorsey and co-founder Evan Williams were fired from Twitter by investors back in 2008 when the microblogging company suffered regular IT server outages. Speculation is now rife that Dorsey may stay in the role of CEO. He is also currently CEO of mobile payments company Square, a role he says he intends to keep. Costolo will remain on Twitter’s board.
Whether it is Dorsey or someone else, the new chief executive will oversee a key transition period for the microblogging platform. “They need to bring in a person who can manage their way out of this situation by finally solving [Twitter’s] user growth and engagement problems,” says Blau. “The new CEO also needs to have the right relationships with Wall Street, media and commerce and be able to manage one of the most prominent technology companies operating today.”