Twitter Inc. (TWTR)’s COO’s Resignation – What it Could Mean to CEO Costello and Investors


Twitter Inc. (NYSE:TWTR)’s Chief Operating Officer Ali Rowghani announced his resignation Yesterday. Kara Swisher, co-executive editor of Re/code shares her views on how current Chief Executive Officer, Dick Costolo will handle the change in the lineup on CNBC News’ Closing Bell with Kelly Evans.

Twitter Inc. (TWTR)’s COO’s resignation - What it could mean to CEO Costello and investors

Swisher feels that many things led to Rowghani’s move. Many issues, right from growth, product innovation, stock sale, etc., led to his resignation and it might even be an aftermath of buying Soundcloud. One single reason cannot be singled out as all the issues might have coagulated into making Rowghani’s approach not working out as expected.

Swisher was asked about what this resignation might mean to CEO Costolo and if Twitter Inc. (NYSE:TWTR) employees were unhappy following this revelation. She said that the employees were surprised when the news came out. They had a growing sense of the impending resignation, but the quick moves surprised them. On the employees’ reactions and CEO’s future role, she said:

“I’ve been watching this for a while; these issues around Rowghani and others there, and I think they’re (employees) shaken up, but the CEO Dick Costolo has to take a really big hand in this and be in charge of product innovation, and charge of growth, and charge of things like that.”

CNBC’s Jon Fortt goes on to talk about Twitter Inc. (NYSE:TWTR)’s shares, and he questions Swisher if any stability would be forthcoming on Twitter Inc. (NYSE:TWTR)’s usually tumultuous top rates and also on how forceful their strategy needs to be in picking a long term new product head. For an answer, Swisher reveals that Twitter Inc. (NYSE:TWTR) had just hired a product manager from Google Inc. (NASDAQ:GOOGL). She also hopes that he’ll stay for long term position and that Twitter Inc. (NYSE:TWTR) has to solidify what is going on. She finishes by saying that many companies go public before having a strongly based management structure; but again, if the structure does not work out, changing it is not too bad.

Meanwhile, on CNBC News’ Fast Money, Neil Doshi of CRT Capital has discussed how CEO Dick Costolo’s more active role on the product side could be advantageous. Rowghani’s resignation is widely touted to be a result of failed deadlines in user growth, etc., and even though the stocks are rallying as a result, Costolo’s increased participation could signal a huge positive growth. On this, Doshi said:

“We have seen that with Yahoo, with Marissa Mayer, we’ve seen that with Facebook and Mark Zuckerberg. When Larry Page took over as CEO of Google, we really started to see acceleration in terms of product innovation. I think that’s what the market is expecting as well.”

Asked about Costello’s possible moves, Doshi said that he might bank on the ongoing FIFA World Cup. Twitter Inc. (NYSE:TWTR) has taken an innovative step, by bringing in all tweets, pictures, videos, etc., related to the World Cup into a single event tab. This step could attract more people towards using Twitter Inc. (NYSE:TWTR) as an event base. If the same concept is implemented for many more events, user growth could face a potential upraise. Around 4 billion people could be hooked on to the World Cup over the following month and Twitter Inc. (NYSE:TWTR) could be one of the main social media through which they can remain engaged and communicate.

It is Doshi’s opinion that the COO  Rowghani’s resignation means an increased participation of CEO Costello in product development, and this could mean a better future for Twitter Inc. (NYSE:TWTR)

Disclosure: None

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