Twitter faces a tough job ahead of finding a new CEO following the resignation of chief executive Dick Costolo, believes RBC Capital Markets analyst Mark Mahaney. While talking on CNBC’s Squawk Box, the analyst stated that the micro-blogging firm will need someone with a product and advertising background and experience of working at another public company.
A hard job
“That makes it a pretty short list of people who could come in and turn this around, and it also is going to take quite some time,” Mahaney said. Even though it will be be a “very hard job” to find a new CEO, the analyst does recommend the stock.
Last week, Twitter announced that Costolo will vacate his post from July 1 and Twitter Co-founder and Chairman Jack Dorsey will work as interim chief executive. For quite some time, the micro-blogging firm has been under pressure to replace Costolo. Many investors have expressed their concerns about the inability of the company to expand its user base. Also advertisers are doubtful if the micro-blogging firm can earn them a healthy return on their investment, Mahaney noted.
Though Costolo will step down from the post of CEO, he will remain on the board of directors, which already includes two CEOs, Dorsey and Evan Williams. This, according to Mahaney, may create an awkward situation for the new CEO as the new chief may want to hold the post of chairman also.
Who could be the next CEO of Twitter?
Some are expecting current CFO Anthony Noto to replace Costolo. However, Anthony DiClemente of Nomura Securities believes the new CEO will most likely be from a product background–someone who can explain to Wall Street the usefulness of the platform. Also there have been talks of Dorsey becoming the permanent CEO, but many investors are against this. One of Twitter’s earlier investors, Prince Alwaleed bin Talal, is not in favor of Dorsey. The prince believes that Dorsey won’t be able to give enough time to the job as he has other commitments also.
Twitter has lost its charm as a conversational technology, primarily due to the popularity of messaging apps, noted DiClemente. Twitter has around over 300 million users, while Facebook’s Messenger boasts of 500 million users and WhatsApp has more than 700 million users. So in such a time when user growth is low, the micro-blogging firm will have to come up with a replacement soon.