Twitter CEO claims that he is going to step down as Parag Agrawal takes his place.
In a story straight out of Silicon Valley, Twitter CEO Jack Dorsey has resigned from his position as the company’s largest shareholder. In a tweet posted Friday, Dorsey said making sure “Twitter is sustainable” would always be his priority.
What prompted this resignation?
Many believe that the resignation, which came after four turbulent years at the helm of one of tech’s most important companies, was prompted by growing pressure from activist shareholders who have been vocal critics over their lack of corporate governance and a lack of transparency in how technology platforms traffic and generate revenue.
Many of Twitter’s investors have been disappointed by the site’s growth and its inability to compete with the likes of Facebook and Google.
Dorsey will remain as chief executive and serve as chairman of the board. He also will keep his job as chief executive of payment service Square Inc., which he founded in 2009. Dorsey has said he hopes to return to running both companies.
The Twitter co-founder, who returned as CEO in 2015, said his first priority would be that “Twitter continues to grow.” He added that service was again on track to reach profitability, showing confidence in his management team, including Chief Financial Officer Anthony Noto, who helped lead a turnaround there.
“We have a plan to get there by increasing our audience, growing our engagement, and delivering impactful and timely content,” Dorsey said. “There is plenty of work — we remain focused on the long term and will remain heads down to execute.”
Dorsey said he would continue as executive chairman of the company’s board, but said he would step into a larger role as Twitter’s lead independent director. “Jack has led us into a very successful product strategy and operational execution,” Chief Executive Officer Jack Dorsey tweeted Friday morning. “We have exciting plans ahead. Twitter will be greater.”
Are there going to be new plans ahead for the platform?
Although Twitter’s revenue soared during Dorsey’s tenure, its net losses have also grown. After Dorsey returned, the company redesigned its service to be easier to use in an attempt to attract new users. It abandoned its initial public offering in 2013 in the face of weak user growth and doubts about how it would make money from advertising.
Dorsey was named interim CEO when Dick Costolo resigned in June 2015. Since then, Twitter stock has risen about 79%, even as user growth has stalled and revenue fell for the past three consecutive quarters.
Sales are “well below” expectations, SunTrust Robinson Humphrey analyst Robert Peck said last month after meeting with Dorsey and other executives.
The new CEO of Twitter, Parag Agrawal, will take over a company that is changing its approach to advertising. It is trying to take a page from the playbook of Instagram, which has been able to grow user engagement and profits by selling ads against its photographs and videos.
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