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Twitter CEO Dick Costolo quits

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Posted at 8:38 PM, Jun 12, 2015
and last updated 2015-06-12 20:38:47-04

NEW YORK  — Dick Costolo hasn’t delivered, and now he’s out at Twitter.

Many on Wall Street have been calling for Costolo to step down over the past year, as Twitter struggled to add new members and generate more revenue from its ad products.

“I am tremendously proud of the Twitter team and all that the team has accomplished together during my six years,” Costolo said in a statement announcing the resignation.

Twitter stock rose about 8% in after hours trading.

The company’s board of directors named Twitter chairman and co-founder Jack Dorsey interim chief while they search for a new leader. Dorsey will not receive immediate compensation, and he will also continue to serve as the CEO of Square, an online and mobile payments startup.

Dorsey launched Twitter as a micro-blogging platform in 2006, as social media networks were gaining massive popularity. It quickly took off as an easy and efficient tool to chat and share information online, especially among the tech and media communities, but failed to gain traction among new users. People said they just didn’t “get it,” and found Twitter difficult to use.

The company, under Costolo, has tried to persuade investors and analysts that innovation was coming fast but those efforts didn’t come quickly enough and weren’t big enough to make a difference.

Most recently, Twitter redesigned its log in page, created automatic timelines so new users would have something to look at and browse when they first created an account, and toyed with different kinds of timelines that show tweets from people users weren’t already following.

Twitter’s first quarter performance continued to illustrate the stagnation and slowing user growth.

Sales missed forecasts even though earnings were better than expected and user growth was in line with Wall Street’s forecast.

Twitter also announced it now has 302 million active monthly users, up 18% year-over-year — the slowest growth ever.

Compared to other social apps like Snapchat, which — after only a few years — already has almost 200 million users by some estimates, investors and advertisers had reason to doubt a dramatic turnaround.

Costolo will officially leave his role July 1.

Ironically, in an interview with tech journalists at Re/code a few weeks ago, he was confident about staying in his position as CEO despite all the clamor to the contrary.

“I don’t worry about that at all. The board and I are completely in sync. Believe me, I don’t worry about that at all,” Costolo told Re/code.

Employees of Twitter started tweeting as soon as the news hit — with messages of thanks with the #ThankYouDickC.

“I can’t imagine there being a cooler CEO out there, but I’m sure we’ll be in great hands! Thanks for all you’ve done @dickc,” tweeted Tom Sotelo, a recruiter at the company.

“If you can’t get your gracious departure to trend on your own platform as you step down you’re doing it wrong ;-) #ThankYouDickC,” Savannah Peterson observed.

Costolo will continue to sit on Twitter’s board of directors.