Twitter is undergoing a major reevaluation of its top management, including a possible shift in the duties of its COO Ali Rowghani.
Sources familiar with the company say it has already made some moves to shift responsibility from Rowghani, who at one point was considered one of Twitter’s most valuable assets.
For instance, product VP Daniel Graf, who was hired in April, does not report to Rowghani, who had been overseeing product since last fall. Now the unit run by Graf reports directly to CEO Dick Costolo.
That move was a clear demotion for Rowghani, who had been charged with goosing Twitter’s consumer offering and also attracting more users to its platform. But growth has been lackluster, as has product innovation. Those problems have combined with some other issues — such as a recent large stock sale by Rowghani — to prompt some evaluation of whether Twitter needs a COO at all, sources say.
Twitter declined to comment.
Rowghani has been at the company for just over four years, coming to the San Francisco social communications company as CFO from Pixar, where he was also CFO. He was elevated to COO in late 2012.
In addition, North American media head Chloe Sladden has been reorganizing her unit, and there has also been some internal chatter that she could also depart the company, although that is not clear. Her division, as well as the international growth and strategy unit under Katie Jacobs Stanton, report to Rowghani.
Currently, the only other division he is in charge of is global business development, run by Jana Messerschmidt — who also has developer relations under her.
Besides the growth and product issue, which is not new, Rowghani’s status has been under stress for a number of reasons.
For example, there has been some tension among the Twitter top staff over the May sale of 300,000 shares of stock, for $9.9 million in profits, by Rowghani. The transaction came as Twitter shares have been under a lot of pressure and on a very downward slide and as other insiders, including Costolo and co-founders and directors Jack Dorsey and Evan Williams, vowed not to sell as a signal of confidence about Twitter’s prospects.
There was, in fact, a question at a recent “tea time” — bi-weekly employee meetings with top execs — about Rowghani’s large sale of his shares. Those in attendance told me that Rowghani got up and told the audience that he was not thrilled to answer the question, but noted that he wanted the money to give to research to battle a disease that took his father’s life. It was an emotional address, said those present.
This came after a poor internal reception — including among directors — of an article in The Wall Street Journal on April 29 that dubbed the 41-year-old Rowghani Twitter’s “Mr. Fix-It” and said he was seen inside the company as a “co-CEO among employees” to Costolo.
Not so much, and the characterization chafed board members and other top managers, since the issues of growth — really, lack thereof — has been on Rowghani’s plate to start with since last year.
As Mike Isaac and Peter Kafka noted, Twitter announced in 2012 that it had more than 200 million active users — who are people who used the service at least once a month. Soon after, Costolo told employees he expected to get to 400 million users by the end of 2013. Twitter ended 2013 with 240 million users and in was 255 million at the end of the first quarter of 2014.
“If [Rowghani] had nailed growth, that would have been great,” said one source with knowledge of the debate over how to turbocharge the company. “But he did not, and it was not clear he was the one that could.”
To be fair, Rowghani has been instrumental in a number of ways, including the acquisition of social TV analytics startup Bluefin Labs and the deal with Nielsen to create the Twitter rating system. That said, his strong backing of the recently abandoned purchase of music-sharing service SoundCloud was another black eye for him, after news of it leaked. The deal received a poor reception on Wall Street.
The shift in Rowghani’s status comes after Twitter had touted him heavily over the past few years, as it has other execs including departed product head Michael Sippey.
And, in fact, Rowghani had been considered a well-regarded CFO, and the IPO itself that he played a big part in was considered a very successful one, especially compared to the train wreck that was Facebook’s IPO.
Still, since it went public, shares of the social network are up 72 percent and Twitter is down 21 percent.
That is not due to its advertising growth, which has been strong under sales head Adam Bain, but to its user growth and lack of product innovation, which had been Rowghani’s responsibility.
Both are now Graf’s task, as well Costolo’s. In fact, much of the responsibility for setting expectations and communicating about Twitter’s successes falls to him, along with managing top execs.
We’ll see how it all sorts out in a “streamlining” being contemplated of all of the units of the company under HR head Brian Schipper, whom sources said has been charged by Costolo to look over the current structure of Twitter for changes that will vault it forward.
Graf has already reorged his unit, said sources.
“It’s a good thing to upgrade now and maybe bring in some new people,” said one person familiar with the situation. “This is not a negative thing, but the way companies evolve.”
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