Jack Dorsey took to Twitter on Monday to announce he will serve permanently as the CEO of Twitter and Square.
The selection of Dorsey gives Twitter a product-minded CEO at a time where the company's inability to simplify its product has emerged as its top issue. The choice should also bring stability back to Twitter's executive suite, which has languished in uncertainty since Twitter's previous CEO, Dick Costolo, announced his resignation in June.
As interim CEO, Dorsey has pushed for major changes at Twitter, such as rethinking the service's 140-character limit. Under his watch, the company has also tested a "News" tab and widely rolled out a "Buy" button.
Dorsey also announced that Twitter's revenue head Adam Bain will take over as chief operating officer. Bain posted on Twitter that Dorsey "has the insight as well as the moral authority as a founder to push teams to make big, bold changes to Twitter."
The company also said that Dick Costolo, the former chief executive, would leave Twitter's board of directors. Dorsey, Twitter said in a filing, will not take any compensation for his role as executive officer. Dorsey is one of the company's largest individual shareholders, owning just under 22 million shares. Dorsey has also stepped down from his role as chairman and the company will seek an outsider from its current board to serve in that role.
"Jack has already demonstrated the ability to inspire the team and think boldly about the next phase of Twitter, Ev Williams, another Twitter co-founder who served on the board's search committee, wrote on Medium. Williams wrote that he had "interviewed a handful of incredibly accomplished and impressive executives" and had "learned a lot about dozens more."
Twitter's board said in June that it was only considering "who are in a position to make a full-time commitment to Twitter," a stance the board jettisoned when they settled on Dorsey.
"We also discussed ad nauseam the challenges of Jack doing both his CEO jobs at once," Williams wrote. "I honestly didn’t think we’d land on Jack when we started unless he could step away from Square. But ultimately, we decided it was worth it."
In early trading, the company's stock jumped up over 2% to almost $27. The company first sold shares to public at $26 and the price rose to $44.90 on its first day of trading in November, 2013.
Dorsey will have work cut out for him. The company's efforts to attract and retain new users have disappointed by its own admission. And its inability to grow has frustrated Wall Street, which has punished its stock as a result.
"The notion that Jack Dorsey would serve as CEO of two public companies gives us pause, particularly given that concerns persist regarding Twitter’s user growth trajectory and ability to stem deceleration in monetization trends" Nomura analysts wrote in a note last week when Re/Code reported that Twitter had settled on Dorsey for the job. "That said, the naming of a highly respected CEO should mitigate investor concerns regarding the stability of leadership."
During Twitter's earnings call last in July, Dorsey criticized the company's lack of progress in attracting new users, calling it "unacceptable." He said Twitter will "continue to show a questioning of our fundamentals in order to make the product easier and more accessible to more people."
The problem Dorsey is facing is largely one of Twitter's own making. The company set expectations sky-high at the time of its 2013 initial public offering and has been unable to meet them. The company's market cap today sits at $17 billion dollars but Twitter brought in only $1.4 billion dollars of revenue last year.
Mary Ann Georgantopoulos is a reporter for BuzzFeed News and is based in New York.
Contact Mary Ann Georgantopoulos at firstname.lastname@example.org.
Matthew Zeitlin is a business reporter for BuzzFeed News and is based in New York. Zeitlin reports on Wall Street and big banks.
Contact Matthew Zeitlin at email@example.com.
Alex Kantrowitz is a senior technology reporter for BuzzFeed News and is based in San Francisco. He reports on social and communications.
Contact Alex Kantrowitz at firstname.lastname@example.org.
Got a confidential tip? Submit it here.