Dick Costolo's 3 Best Moves as Twitter Inc.'s CEO

Dick Costolo is stepping down. Source: TechCrunch.

The Twitterverse shook a few weeks ago when Dick Costolo announced he would step down as CEO of Twitter on July 1. Costolo's term culminated after a quarter where revenue growth couldn't live up to expectations; this was after several quarters of disappointing user growth since the company went public.

Costolo led Twitter for five years, and while many will focus on the reasons why he might have been pressured out of the top spot at the company, he accomplished a lot in that time. Notably, he saw the company go from $0 in revenue to an expected $2.2 billion this year.

We asked a couple of our Fool contributors to write about some of Costolo's best moves as CEO. Brian favors a functionality while Adam chimed in with two moves, one about a product and one about a person.

Brian Stoffel (Periscope acquisition)Twitter made a lot of acquisitions under Dick Costolo's watch, but none may end up being more consequential than Periscope. The app allows anyone with a mobile device to broadcast something that's happening live to anyone who wants to watch.

The app is relatively new, and gained widespread notoriety during the Pacquiao-Mayweather fight, where many attending the fight or watching it on pay-per-view broadcast it to their followers, who had not paid for the experience. Though that practice will likely be clamped down on due to infringement issues, it was the perfect example of what Periscope can become.

We are increasingly seeing that Twitter has two major advantages over other forms of media. First, it allows for much more personal interaction with the world's powerful and famous. Second, it has become the de facto source for breaking news.

Both of these stand to benefit from the inclusion of Periscope in Twitter's portfolio. What better way for a reality star, athlete, or political figure to build relationships than by holding a Periscope broadcast from the comfort of their own home? And when it comes to breaking news, Twitter doesn't have to hire a team of camera operators to cover the action. Because of Periscope, there a millions of citizen-journalist who can provide coverage, at no cost, on a moment's notice.

Adam Levy (The purchase of MoPub)Costolo's decision to purchase MoPub in 2013 for $350 million may turn out to be Twitter's most important acquisition. MoPub is a demand-side platform for mobile ads, and reaches more than 1 billion mobile devices. SunTrust analysts project MoPub will generate more than $500 million in revenue by 2017.

Currently, MoPub's revenue sits in Twitter's data and licensing line item, which totaled $147 million in 2014. But MoPub could prove more valuable than many other DSPs due to the targeting data available from Twitter's social network.

But the door swings both ways -- MoPub benefits Twitter just as Twitter improves MoPub. MoPub extends Twitter's reach beyond its own platform. Advertisers can opt to extend their Twitter ads to other apps, which put tweets in front of users who otherwise might not be exposed to Twitter. As an added bonus, these types of ads stand out from standard mobile ads and are naturally more engaging, enabling MoPub to charge higher ad prices.

While it's quietly operating behind the scenes, MoPub may become integral to Twitter's business in the very near future.

A second very smart move by Costolo was making Kevin Weil senior vice president of product. With Weil, Costolo finally figured he needed to put an insider in charge of product after several years of little progress among the three people he brought on board from outside the company. Weil, who now heads up product development and design at Twitter, came to the microbloggin company in 2009 as a data scientist. With help from Weil's engineering counterpart, Alex Roetter, the product improvements have been fast and effective in 2015.

Notable new features that Twitter released in 2015 include:

  • While You Were Away: A feature that surfaces top tweets you missed since your last login.
  • Direct message improvements: You can now hold a direct message conversation with a group of users instead of just one-on-one. You can also start a DM conversation with users who don't follow you.
  • Improvement to video: Twitter added capabilities to capture video natively within the app. More recently, it made it so those videos -- and all videos and gifs -- autoplay as users scroll through their timelines.
  • More information about trends: Twitter moved trending hashtags to the search tab in its app. It added more information explaining what those hashtags mean, hoping to increase engagement on trending hashtags.
  • Revamped logged-out homepage: The new homepage allows logged-out visitors to jump right into Twitter instead of asking them to sign up. Management said it has more than 500 million logged-out visitors every month.
  • Product and place pages: Twitter just introduced a new place for information and conversation about products and places, setting the stage for social commerce.
  • Project Lightning: This project, still in development, highlights live events and curation.

Twitter has Weil to thank for the accelerated product launches in 2015, and most of those products are great improvements. However, those improvements precede user growth, which has been a big gripe from Wall Street lately, ultimately leading to Costolo's resignation.

The article Dick Costolo's 3 Best Moves as Twitter Inc.'s CEO originally appeared on Fool.com.

Adam Levy has no position in any stocks mentioned. Brian Stoffel owns shares of Twitter. The Motley Fool recommends Twitter. The Motley Fool owns shares of Twitter. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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