Twitter CEO shuffle: Dick Costolo out, Jack Dorsey in for interim

UPDATED: Costolo said the decision to bring on Dorsey as interim CEO was part of the decision to make the new CEO search as open and public as possible.

After months of speculation, Twitter confirmed what many insiders and analysts had been murmuring about: Dick Costolo will be stepping down as chief executive officer.

In a bigger twist, the San Francisco company announced on Thursday that co-founder Jack Dorsey would be stepping up as interim CEO, effective July 1.

Costolo will stay on with Twitter as a member of the board.

Costolo first joined Twitter in 2009 as the micro-blogging giant's new chief operating officer.

The Google veteran was promoted to CEO in 2010 amid a tumultuous shuffle with then-CEO and Twitter co-founder Evan Williams.

Dorsey served as Twitter CEO for two years before Williams replaced him in 2008. Now chairman of Twitter's board of directors, Dorsey currently as CEO of another prominent tech company he co-founded: Square.

Costolo, also a former comedian before he pivoted toward a career in tech, has often been credited for establishing Twitter's first revenue streams after years in the red and sole reliance on venture capital money.

Costolo has also long been an active proponent of Twitter's presence during live events, from the World Cup to the Oscars to live-tweeting the latest show available for binge-watching on Netflix.

Nevertheless, despite a splashy debut on Wall Street in November 2013, Twitter has faced unrelenting scrutiny over a different bottom line: user growth (or lack thereof).

Problems possibly reached a breaking point amid the last earnings announcement in April in which the first quarter report released early before the markets closed, apparently sourced from the company's investor relations website.

Twitter asked the New York Stock Exchange to halt trading on its shares at the time, nearly 20 minutes after the numbers were made public. Twitter denied the early posting was the result of a leak or hack.

The social network is expected to provide more details about the transition during a conference call at 2:15PM PT/5:15PM ET on Thursday.

UPDATED: Costolo said the decision to bring on Dorsey as interim CEO was part of the decision to make the new CEO search as open and public as possible. He added Twitter wants to "avoid speculation and rumors if we tried to attempt a CEO search privately."

"There is never, ever, a perfect time for a transition like this," Costolo admitted.

Reiterating his role to facilitate the transition amid the search process, Dorsey added he will be working "closer" with the Twitter team on bringing new products to market.

"This transition is not the result of anything more than Dick deciding to move on from his role as CEO," Dorsey insisted. "There is no connection with our near-term results as you can see from our reaffirming our long-term outlook."

Williams along with fellow Twitter board members Peter Fenton and Peter Currie will make up the committee overseeing the search. Dorsey added there is "no time table" set for selecting the next CEO.