Coverage: Twitter COO out after fighting with CEO

It’s no secret that Twitter is struggling and it looks like they’re going to have to add searching for a new chief operating officer to the list of things to fix.

Bloomberg had this story by Sarah Frier and Jonathan Erlichman:

Twitter Inc. (TWTR)’s Ali Rowghani resigned as chief operating officer after a power struggle over responsibilities, said people familiar with the matter, in the biggest executive exit since the microblogging company went public last year.

Rowghani, 41, wanted to keep control over Twitter’s product vision, as well as operations and corporate development, setting up a clash with Chief Executive Officer Dick Costolo, who decided to have more of those functions report to him, said the people, who asked not to be identified because the conversations were private.

The exit illustrates Twitter’s rocky internal dynamics as it grapples with growing pains following its initial public offering in November. Rowghani’s job entailed helping Twitter increase members, yet the social media company has experienced decelerating user growth and has struggled to boost people’s engagement with the service. Twitter shares, which rose 3.5 percent today to close at $36.79, are down 42 percent this year.

“If you’ve got too many smart people opining about the same subjects — perhaps in this case with Twitter about the direction of the growth — it’s possible that you can have too many cooks in the kitchen,” said Anthony DiClemente, an analyst at Nomura Securities. “There are plenty of companies in the Internet industry that don’t have a COO.”

The New York Times story by Vindu Goel said that Rowghani was struggling to keep users engaged:

Mr. Rowghani, who joined Twitter in 2010 as chief financial officer, ascended to the No. 2 spot a couple of years later. Although his duties varied, he had recently overseen efforts to expand the service by attracting new users and increasing activity among existing users.

But those efforts failed to bear fruit, and Twitter’s stock plunged from more than $70 last December to around $35 before the news of Mr. Rowghani’s departure. It rose 3.5 percent to $36.79 on Thursday.

Twitter had 255 million monthly users in March, a 5 percent increase from the previous quarter. It was the second quarter of disappointing growth for the service. Wall Street was hoping for an increase in the double digits or for other indicators that Twitter had a way to break out from its core audience.

The company also remains far behind Facebook in keeping users engaged. According to Forrester Research, 22 percent of Twitter users visit the site more than once a month, compared with Facebook’s 72 percent.

Apparently investors welcomed the news, according to The Wall Street Journal story by Yoree Koh:

Twitter’s stock, down 42% this year, rose 3.5% Thursday to $36.79 in New York trading.

Mr. Rowghani, a former Pixar Animation Studios executive, became operating chief in 2012 and rose quickly to become one of Mr. Costolo’s most-trusted lieutenants. He possessed such stature and influence within the company that some employees gave him the nickname of “co-CEO.”

As the company prepared to go public in November, Mr. Rowghani took charge of the product team after it was clear the company would badly miss its internal projection of 400 million monthly active users by the end of 2013, people familiar with the matter have said. Twitter reported 241 million active users, one-fifth that of Facebook Inc.

Mr. Rowghani’s first major task to fix the product was to find a new product leader after Michael Sippey stepped down from the role in January. Amid the four-month search led by Mr. Rowghani, Twitter’s product team suffered from a stream of exits.

In April, Mr. Rowghani hired Daniel Graf, who previously ran the maps product at Google Inc., as the new vice president of consumer product.

The Washington Post story by Andrea Peterson had more details about Twitter’s struggles:

Despite its big profile in the media and among celebrities, Twitter has struggled to catch on with the broader public.

For one, the number of monthly active users is only barely growing. In late April, the company’s first quarter filings showed the number of monthly active users increased just under 6 percent over the previous three months, to a total of 255 million users.

But that monthly active user figure doesn’t address a major issue related to the company’s struggle growth: The number of people who try the service, and then abandon it.

Twitter has been secretive about the number of people who register for an account, data that would shed light on exactly what’s going on among users. But an outside estimate by the Twitter-watchers at Twopcharts puts the total number of existing accounts at around 1 billion. If only around 250 million of those are monthly active users, that means there are roughly 750 million accounts lying dormant. That’s three out of four accounts.

That’s a lot of people who don’t bother to log into the service. If those numbers are true, it will drive know the number of advertisers willing to pay to get in front of users. Twitter has been the darling of revolutions, but it seems that it hasn’t caught on with daily users.