Twitter’s COO bails

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TwitterBlue Reuters.

San Francisco - Twitter said chief operating officer (COO) Ali Rowghani resigned from his position, in the biggest executive departure since the microblogging company’s initial public offering last year.

Rowghani, 41, will continue as a Twitter employee and as a strategic adviser to chief executive Dick Costolo, the San Francisco-based company said in a filing today, adding that it won’t fill the COO role.

The exit illustrates Twitter’s rocky internal dynamics as it grapples with the growing pains of being a public company.

Rowghani’s job entailed helping Twitter increase revenue and members, yet the social media company has been grappling with two quarters of decelerating user growth and has struggled to improve how frequently people engage with the service.

Twitter’s stock is down more than 40 percent this year.

Twitter’s board has raised questions about growth in members and user engagement, said a person with knowledge of the matter, who asked not to be identified because the conversations are private.

Discussions over Rowghani’s role were precipitated around April by the hiring of Google maps executive Daniel Graf as vice president of consumer products, said people familiar with the matter.

Instead of reporting to Rowghani, Graf should report to Costolo, the company decided.

Graf is set to take on more responsibility with the company’s growth strategy, said the people.

 

Engineering, Product

 

Last month, Twitter also appointed a new head of engineering, Alexander Roetter, who was already at the company.

Costolo now has the head of product and head of engineering reporting to him, reducing the need for a COO, said one of the people.

Gabriel Stricker, a spokesman for Twitter, declined to comment.

Technology blog Re/code yesterday reported on internal friction with Rowghani.

“Our read through is that product innovation hasn’t kept up with the pace as expected by management and investors,” Robert Peck, an analyst at Suntrust Robinson Humphrey, wrote in a note today.

“Hence we think the reshuffling makes sense for the company.”

Twitter hasn’t always had a COO.

Costolo was brought on as COO to expand the business in 2009, and later that year replaced co-founder Evan Williams as chief executive.

The company didn’t have a COO again until December 2012, when it hired Zynga’s Mike Gupta to be chief financial officer (CFO).

Rowghani, who was finance chief at the time, took the operating role.

 

Rowghani’s Path

 

Rowghani joined Twitter in 2010 after nine years as CFO at Pixar Animation Studios.

Before that, he was an associate at consulting firm McKinsey.

Though he is known for his ability to analyse issues with company procedure, he doesn’t have experience building products, an area that Twitter has said its future growth depends on.

Rowghani recently sold 300,000 shares of his Twitter stake for a profit of about $9.9 million, even with the stock price near an all-time low, according to a filing with the US Securities and Exchange Commission.

The sales followed the expiry of a lock-up period on shares.

By contrast, Costolo and co-founders Williams and Jack Dorsey pledged to hold on to their stock to signal confidence in the company. - Bloomberg News



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