Disclosure: I own less than 500 shares each of Twitter, Yahoo, and Aol stock.
The new year always brings new speculative tech predictions. Some of the most common predictions this year are that neither Dick Costolo and Marissa Mayer will make it through 2015 with their titles intact. Wall Street analysts and activist investors have called for changes at Twitter and Yahoo (and at our parent company Aol) so many times that perhaps everyone should just play CEO musical chairs: Dick Costolo can come to Aol, Tim Armstrong can go to Yahoo, and Marissa Mayer can go to Twitter.
While Costolo was SoulCycling to Beyoncé in Las Vegas this week, chatter abounded at CES, among “people who hear things,” that Twitter President of Global Revenue Adam Bain is the front-runner for the next Twitter CEO.
It’s not clear where this rumor came from, but it’s hit the surface. On the “Jay and Farhad” show last week, Business Insider’s Nich Carlson speciously confirmed it, “Adam Bain’s friends tell me that Adam Bain is going to be CEO of Twitter someday. That that’s gonna happen.”
We’ve heard the same about Bain, but one source says that these whispers are most likely the outgrowth of analysts like Walter Price and Robert Peck calling for Costolo’s head, and former Yahoo CEO Ross Levinsohn suggesting that Twitter and Yahoo merge.
Twitter has steady but not stellar user growth and a big user retention problem. It needs to find a solution soon: Its stock price has plummeted, hence investor thirst for executive change despite solid revenue numbers. Twitter’s stock rose 4% after Peck’s comment that “there’s a good chance he’s [Costolo’s] not there in a year.”
According to another source, *if* someone does end up replacing Costolo, it would be Bain. But Twitter hasn’t gotten to the point where it’s considering it internally and the rumor did not come from inside the company or the board, they said. The board hasn’t even started considering CEO replacements according to our source.
However, an internal discussion might happen if Costolo misses Twitter’s fourth quarter and fiscal year earning expectations on February 5th. If he does miss on user growth numbers (namely MAUs), the public market outcry for his removal will be too much for board members to ignore. When asked if that were likely to happen, our source said that Twitter would likely not miss on revenue, but on user growth, who knows?
Bain, who has been at Twitter since 2010 and was at Fox Audience Network before then, is well liked internally and externally. He is a star, and also hits this magic trifecta: He’s someone whom Wall Street, Twitter employees and users trust.
For what it’s worth, investor Jason Calacanis wrote that firing Costolo would be a “huge mistake” because Twitter has the potential to be a celebrity powerhouse when it launches its much-anticipated video product in a few weeks. Costolo has a prodigious sense of humor, has managed to turn Twitter into a huge cultural and revenue generating force, and has taken the company public. As a tiny shareholder, I’d also hate to see him go, but acknowledge that Twitter needs to get its story straight asap. Or buy the next Instagram.