Twitter co-founder and CEO Dick Costolo has stepped down, with company founder Jack Dorsey filling his spot in the interim while a permanent successor is found.

Costolo’s departure comes amid ongoing concerns among investors over the social bulletin platform’s financial performance, with the former CEO’s leadership ability being called ‘tepid’ and ‘lacking vision’.

Heading up Twitter since the company went public in November 2012, Costolo reportedly claims that discussions of his departure began late last year, but stepped down prematurely to avoid ongoing criticism directed at his employer:

“I personally felt like the scrutiny of the company would intensify if I remained CEO while the search process was ongoing,” he said in a prepared statement.

“I felt like it would be a distraction for the company, and didn’t think it would be in anybody’s interest to have that distraction.”

A brighter future?

Twitter’s stock has risen rapidly following the announcement, which was made on the social platform late last night (July 11).

Despite healthy audience figures, boasting 302 million monthly active users – an increase of 18% on last year – Costolo’s efforts have not met shareholders’ financial expectations.

The company’s Q1 revenue fell shy of analyst predictions and Twitter’s own recommendations at $436 million.

Since an IPO last year, the challenge has been for Dick Costolo to balance the need to monetise the platform without alienating its user base, but has suffered from a lack of growth in the former when compared to key competitor Facebook.

Twitter’s success could now rely on a reconstruction of narrative, shifting focus from a growing user base to utilising the full potential of its data and advertising products, according to Marin Software managing director Jon Myers.

“Overall Twitter ad revenue increased 97% (Feb ’14-Feb ’15) because it has become a highly attractive advertising medium for brands,” he commented.

Twitter has worked hard to attract brands by broadening its advertising options in recent months, opening up more audience data and launching new capabilities to reach users, such as pinned tweets and Vines. In the US it’s even trialling a ‘buy’ button.

“These moves have been important for brands, who might otherwise fear their message could be drowned out by the sheer volume of noise on the platform – over 9,000 tweets are posted every second,” said Myers.

“The bottom line is that as new CEO, Jack Dorsey, will continue to attract brands if the advertising works and if users are kept happy; keeping this balance in check will be critical. Only time will tell if he will succeed.”