Replacing Dick Costolo: The possible candidates who may take over at Twitter

By Alexei Oreskovic

Wall Street is not in love with Twitter CEO Dick Costolo, but finding a substitute won't be easy.

Twitter's mediocre financial performance last quarter, its ongoing challenges with stalling user growth, and Costolo's past stock sales have led many investors to wonder if it's time for a leadership change.

Those calls could become louder when Twitter has its annual shareholder meeting in San Francisco on Wednesday.

But there's one big problem for those hoping for a changing of the guard: There aren't any obvious candidates within the company who could quickly step in and turn things around.

Some observers point to head of revenue Adam Bain as the best suited to take the reins in the event of a change, though he's not a perfect shoo-in.

A string of personnel changes and Costolo's own particular style of promoting employees has left the company without a clear number 2 with all the qualities considered essential to lead the social media company, say some investors and former employees. While finance chief Anthony Noto has emerged as Costolo's right-hand-man, many question whether the ex-banker would make a good fit to lead an Internet company, particularly one with Twitter's challenges.

"I don't think there is an heir apparent internally," said one Wall Street analyst who covers the company closely, speaking anonymously because he was not authorized to speak to the press.

The situation may give Costolo some breathing room as he looks to revitalize Twitter's growth with a slew of new initiatives, including a recently-launched partnership with Google that will showcase tweets within Google's search page.

But the clock is ticking.

How long does he have?

"He probably has until the end of this year to show that he can deliver," said Walter Price, a senior portfolio manager at Allianz Global Investors, whose firm owns Twitter shares.

Price said that he's encouraged by some of the CEO's recent initiatives, such as a feature that will show users the most important tweets they missed while they weren't using the service.

But he added that for Costolo "to win my confidence he's going to have to show me the results," such as increases in number of users and in user engagement with the service.

Price met with Twitter management after the company's recent disappointing quarterly earnings report. The company's management appeared very focused on the problems at hand, he said. "They know what they need to do. I don't think they're clueless."

Of Costolo, Price said, "I think he's got the right idea of things they should be working on." He continued, "I guess my criticism has been his vision is too grand and they need to parse it into pieces that get them significant increases in audience and advertisers without executing to the grand vision in one step. Maybe make it in several steps."

In an on-stage interview at the Code conference last week, Costolo said he was not worried about losing his job.

"The board and I are totally in sync about what we need to do - we have a very clear strategy that we've articulated and that we're following," he said.

Twitter declined to comment on this story.

Fixing the product
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