(Recasts to add details, analyst comment)
By Supriya Kurane and Gerry Shih
June 12 Twitter Inc on Thursday
announced the resignation of its chief operating officer, who
had been responsible for the social media company's efforts to
revive flagging user growth.
Ali Rowghani, once seen as an influential No. 2 who oversaw
Twitter's product development, finances and dealmaking, departed
after clashing with Chief Executive Officer Dick Costolo over
whether he should continue to oversee product, a person familiar
with the matter said.
Although he had been praised for orchestrating a series of
financing deals for Twitter that culminated in a successful
initial public offering in 2013, Rowghani's exit, which had the
backing of Twitter's board of directors, underscores the
tensions and pressure at Twitter to tweak its microblogging
offering to attract new users.
Formerly the chief financial officer at Pixar Animation
Studios, Rowghani joined Twitter as CFO in 2010 but steadily
expanded his influence to rival Costolo's. He was appointed COO
in 2012 and was tasked last year with increasing Twitter's user
base and revenue, with high-ranking executives such as former
vice president of product Michael Sippey reporting to him rather
than the CEO.
But the mood within the San Francisco company has turned
sour as user growth flagged and its stock price traded at nearly
half its value six months ago.
Costolo projected privately in 2013 that Twitter would reach
400 million users by the end of that year, according to news
reports, but the company reported 255 million users as of early
The company said it did not intend to replace Rowghani,
whose responsibilities will be taken over by other managers.
Twitter hired Google Inc executive Daniel Graf to
lead its product development in April. The source familiar with
the company's internal politics said that was what precipitated
showdown talks between Rowghani and Costolo over his role.
Twitter shares jumped 3.5 percent to $36.80 on Thursday.
Some analysts warned Rowghani's exit would not be enough to
spur growth at Twitter.
"His resignation implies that the platform has not seen
acceleration in important user and engagement metrics," Jordan
Rohan, an Internet analyst at Stifel, wrote in a research memo.
"At this point we are not sure if or when user engagement will
Arguing that tweaks to Twitter's product would result in
better user engagement, Costolo has asked Wall Street for time
to show improvement, particularly in April after Twitter
disclosed data showing flagging momentum in user growth.
But in the end, slowing growth may only be a reflection of
Twitter's limited appeal.
"The issue for Twitter is not per se the management team,"
said Hudson Square Research analyst Daniel Ernst. "I think they
are doing all the right things. The issue for Twitter is not
Twitter, it's that the expectations Twitter could become as big
as Facebook were incorrect."
Technology news website Re/code first reported on Wednesday
that Twitter was considering a shake-up in top management,
including a possible shift in Rowghani's responsibilities. (r.reuters.com/weq99v)
(Reporting by Supriya Kurane, Lehar Maan and Abhirup Roy in
Bangalore and Gerry Shih in San Francisco; Editing by Don
Sebastian, Jeffrey Benkoe and Tom Brown)