Twitter CEO Dick Costolo is stepping down as of July 1.
The company announced Thursday that Costolo will be replaced by co-founder Jack Dorsey who will be appointed Interim CEO. Dorsey will remain chief executive of Square, the mobile-payments company he also founded.
“Welcome back, @jack !!” Costolo tweeted.
Twitter’s stock, which had dropped as much as 25 percent following disappointing first-quarter earnings, had gone up as much as 7 percent after the announcement.
Costolo’s departure throws Twitter into further disarray. Investors had been calling for him to step down as the social-media giant struggles to deliver sustainable growth and sales. While seeing a spike in monthly active users from 288 million to 302 million in the first quarter, the microblogging service reported sales of $436 million, missing analyst estimates of $457 million. Profit was 7 cents a share, while analysts estimated 5 cents.
The company now projects revenue of between $470 million to $485 million.
For months Costolo said he wasn’t worried about his job security, as questions began resurfacing about whether he could hang on to his title as CEO. As recently as last month’s Code Conference in Southern California, Costolo said he had to show Wall Street that Twitter could make money.
“People believe the strategy,” he said then. “They buy it. But we have to show that. ‘It’s great you reached a billion people on and off your site — help me understand how you’re going to monetize that. Show me how you’re going to monetize that.’ Those are things we know, and we need to show them how we do it.”
Costolo joined Twitter in 2009 as the company’s chief operating officer, taking over the chief executive role in 2010. Before Twitter, Costolo co-founded and was CEO of FeedBurner, a Web feed platform that was acquired by Google in 2007. Before that, he co-founded two other companies: Web page-monitoring firm SpyOnIt and Burning Door Network Media, a Web design consulting company.