Twitter founder steps down as CEO.

In a move that has been rumored for months, Twitter Inc. has handed the reins to its chief operating officer Dick Costolo, who replaces co-founder Evan Williams as chief executive.  Williams, who has run the privately held San Francisco company for the last two years, will focus on product strategy. He said he asked Costolo to take over. Mr. Costolo, 47, joined Twitter last September and has been leading its advertising initiatives. Mr. Costolo, a former management consultant, was formerly an advertising product manager at Google Inc. Building things is my passion, Williams said in a blog post on the company’s website. Twitter is an Internet sensation that private investors have valued at more than $1 billion. Making money is Twitter’s No. 1 challenge as its popularity continues to rise. Some advertisers, such as Virgin America, have had success advertising on Twitter, but others aren’t yet sure. Williams took over as CEO in 2008 from co-founder Jack Dorsey, who now runs another company, Square. Costolo is known for his business acumen and his sense of humor. When he joined Twitter in September 2009, he tweeted: First full day as Twitter COO tomorrow. Task No. 1: undermine CEO, consolidate power.

In an interview Monday, Mr. Costolo said the leadership shift occurred because in recent weeks it became clear to everybody that Ev's got to be able to focus on product strategy. Costolo, an early investor in Twitter joined the company a year ago to spearhead its advertising initiatives, which, he said in an interview with The Times, had gained traction. Twitter just rolled out a major redesign of its website, in part to make it easier for advertisers to get noticed. Williams took charge of the redesign and Costolo took the lead in running the business, a signal of the personnel change to come. Today, Twitter users post more than 90 million updates each day. Twitter.com had 96 million unique visitors in August, up 76 percent from a year earlier, according to research firm ComScore Inc. Twitter has expanded to meet the demands of it users, swelling to more than 300 employees. The popularity of Twitter—which now has more than 160 million users—has fueled expectations that marketers could use the messaging service to target ads to consumers interested in real-time information about breaking events and other topics. As part of its efforts to woo marketers, Twitter in recent months has hired experienced advertising executives from Google and Facebook, among other companies. Several marketers including Virgin America and Verizon Wireless have touted the success of advertising on Twitter, while others say it remains an experiment. Since launching its advertising offerings in April, Twitter has signed on more than 30 big-name brands, including Coca-Cola Co. and Verizon Wireless, to test them. Twitter, which has raised roughly $155 million from venture capitalists, has been valued by private investors at more than $1 billion. Last week Mr. Costolo said Twitter had, every intention of remaining an independent company" and that "we have no interest in selling.

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