Twitter Inc. (TWTR:US) Replaces Its Executive Board Yet Again

Dick Costolo, Twitter Inc. (TWTR:US)’s chief executive officer, has replaced one of the company’s executives yet again – this time the chief financial officer.

On Tuesday, Costolo brought in former banker from Goldman Sachs Group Inc. Anthony Noto. This is the fourth major executive turn over for the micro blogging company, following the exits of chief operating officer, head engineer, and head of consumer products.

Costello is doing everything he can to bring the company back up after a decrease in new users that caused the stock to fall 34% this year. In March, Twitter had 255 million monthly users, a 5.8% increase from December of the previous year, but still lower than the 260 million count that analysts hoped to see. The 50 year old CEO has gotten rid of nearly every single top executive in an effort to build his executive “dream team”.

While Noto is a respected banking veteran on Wall Street, there is doubt of how helpful he will be for Twitter. These changes give the CEO more power over the product and a new ally in Wall Street, but don’t solve the company’s fundamental problem – making a niche service, that specializes in unconventional abbreviations and symbols like RT and #, attract the general public.

“How do you convince my mom she needs to use Twitter? Facebook is obvious. Everyone likes to share pictures and message their friends,” said Richard Greenfield, a media analyst at BTIG Research. “If they want to reach everybody in the world like Facebook does, the product is going to have to change pretty significantly.”

Mark Mahaney, an Internet analyst for RBC Capital Markets, comments on Twitter’s high turnover rate. “It’s unusual to have this kind of management shuffle and turnover so soon for a public company. It just highlights there is still a lot of management risk here. They wouldn’t be making all of these shuffles if they were perfectly jelling.”

The ever changing of staff in the executive office shows that Twitter is losing its footing in the competition against Facebook. The recent executive replacements are reminiscent of other Web companies whose stock was dragged down over the years. Zynga Inc. and Groupon Inc. have both seen their stock drop after their IPOs in 2011, and both CEOs have since stepped down.

However, Twitter has worked with media outlets, TV networks, and advertisers to make itself at the forefront of events. For example, millions of users relied on Twitter to receive updates from tragedies like the Boston Marathon bombing in 2013, or to interact with other Super Bowl fans each February.

Since Noto’s appointment, Twitter’s stock has risen by over 2.6%, closing on Tuesday at $42.05. Noto is to be paid $250,000 in annual salary, and received 1.5 million company shares worth about $64 million as well as options to buy 500,000 shares.

Noto was actually supposed to start a job this week at hedge fund Coatue Management. He took the job at Twitter instead.