Twitter made co-founder Jack Dorsey its new CEO, ending months of speculation and handing him the tough task of turning around the company's sluggish user growth.
Dorsey is also CEO of mobile payments company Square, creating the unusual situation of having one person lead two high-profile Silicon Valley companies at the same time. He's also on the board of The Walt Disney Company.
Dorsey has been Twitter's interim CEO since Dick Costolo stepped down abruptly four months ago, so the big change, approved by the board on Sept. 30 according to an SEC filing, is to make Dorsey's role permanent. That filling also said that "there are currently no plans to provide Mr. Dorsey with direct compensation for his role as Chief Executive Officer."
On a conference call Monday before markets opened, the Twitter executive team sought to convince media and analysts that Dorsey can lead Twitter and fuel new product development while simultaneously running another company.
Dorsey "surpassed goals as interim CEO while also running Square," said Peter Currie, lead independent director of Twitter. "Jack not only understands Twitter's culture but is a part of it."
Currie portrayed the CEO search effort as an arduous one that considered a variety of candidates but ultimately led back to the company's co-founder.
Currie said the company board met 10 times, the executive search committee had 15 separate meetings, and there were more than two dozen meetings between candidates and search committee members in an effort to find a new CEO.
"The board ultimately concluded that Jack is that leader," Currie said. "Between Twitter and Square Jack has built two great companies from the ground up," he added.
The board also appointed Adam Bain, who has been president, Global Revenue & Partnerships since September 2010, as COO. Also on Sept. 30, Costolo resigned his position on Twitter's board. While Dorsey had been Twitter's chairman, the SEC filing made public on Monday said that he will no longer serve in that role although he will remain on the board.
Currie said the board will be reaching out to candidates to fill the chairman position.
On the call, Dorsey stressed that the appointment of Bain as COO was crucial. "My ability to manage Twitter and Square is made possible by the great teams at both companies," Dorsey said. " No one is more determined than I am to see this company achieve its promise."
Dorsey's main tasks at Twitter are to figure out how to attract users at a faster pace, and to create a path to profitability.
Dorsey said the pace of product development at Twitter would pick up. The way to retain users and attract advertisers is to "make Twitter easier for everyone around the world to get utility from," Dorsey said. At the moment "the product makes people do a lot of work to get value," he said
Dorsey and other Twitter executives mentioned the upcoming Project Lightning as an example of a feature designed to give users more value. Project Lightning will occupy a new tab on the site that will call up content around popular events immediately. And instead of just showing tweets based on chronology, human editors will also decide which content to show.
Currie said the product is coming "soon" but did not specify a date. Among other projects, the company will also be enhancing Vine and Periscope, the executives said.
The social network is under intense pressure to figure out how to draw new users to its service. Unlike Facebook, which ramped easily to a billion subscribers, Twitter grew quickly at the start but seems to have hit a plateau.
It reported strong growth in its advertising business last quarter, but the social network isn't profitable, in part because it's investing in the infrastructure that delivers its service.
More worryingly, the number of core users who access Twitter at least once a month increased by only 2 million last quarter, to 304 million.
"This is unacceptable and we’re not happy about it," Dorsey said at the time.
In July, he outlined steps to draw more users, including making it easier for people to get started on Twitter, and showing more meaningful tweets in timelines.
"People all over the world know of the power of Twitter, but it's not clear why they should harness it themselves," he said then. Twitter needs to communicate better why people should want to use it.
He even talked about rethinking Twitter's signature chronological tweet stream, but a challenge for the company is that any big changes could alienate its core base.
Dorsey created Twitter in 2005 and 2006 with Evan Williams, Biz Stone and Noah Glass. Dorsey became CEO soon after but lost the role in 2008, because he became a "distracted manager," according to a profile in The New Yorker.
The following year he co-founded Square, known for its technology that lets small merchants take credit card payments on smartphones and tablets. He's chairman and CEO of that company, in addition to now being CEO of Twitter.
Twitter's investors don't seem thrilled at having a CEO who divides his time between two companies. The company's stock slipped more than 8 percent last week after reports emerged that Dorsey was likely to get the top job. Shares edged upward slightly Monday morning after the announcement, gaining $0.20 to trade at $26.51.