Padmasree Warrior in race for Twitter CEO's post

Pressure on the Twitter board is mounting. In the three months since the company started searching for a new chief executive officer (CEO), its stock has slipped 22 per cent and several product executives have left.

Sources say a leading internal candidate is interim leader and co-founder Jack Dorsey. Twitter's search firm, Spencer Stuart, has also been reaching out to other potential leaders, including former Cisco Systems executive Padmasree Warrior and CBS Interactive's Jim Lanzone, according to people familiar with the matter.

They added Adam Bain, Twitter's revenue chief, was also an internal candidate, though he was unsure whether taking the job might jeopardise his relationship with Dorsey.

"The company, its employees and certainly its shareholders are in a little bit of limbo," said Colin Sebastian, an analyst at Robert W Baird & Co. "That qualifies it as an urgent matter of business."

Search for a CEO takes time, and even with the urgency, the board needs to be careful not to make a decision that's too rushed, as was the case when Hewlett-Packard chose Leo Apotheker in the wake of Mark Hurd's departure, says Jo-Ellen Pozner, who teaches corporate governance and organisational misconduct at the University of California, Berkeley. Apotheker lasted a year and is mostly known for a disastrous acquisition and a series of reduced sales forecasts.

Even so, the San Francisco-based Twitter doesn't have the luxury of a long, drawn-out process. Twitter's board didn't have a succession plan in place when former CEO Dick Costolo left, though it wasn't a surprise exit. That meant the search was with public knowledge of the matter, opening it to scrutiny about all such moves, Pozner said.

"The board needs to take some action and communicate it to shareholders," she said. "There's a huge amount of uncertainty, which creates a really uncomfortable feeling for shareholders and internal stakeholders."

Jim Prosser, a spokesman for Twitter, declined to comment. If directors pick Dorsey, who also runs mobile-payments start-up Square, they'd have to backtrack on an assertion in June that Twitter would only consider a CEO with "full-time" commitment.

Square spokesman Aaron Zamost declined to comment.

Unless Dorsey scaled back his role at Square, which he also co-founded, it wasn't "a satisfying solution" for Twitter, said Sinan Aral, a corporate governance professor at the MIT Sloan School of Management, who owns Twitter stock. "Jack Dorsey, on paper and with his history, is probably a great candidate, but not if he's also going to be CEO of Square."

Technology investors, including Chris Sacca of Lowercase Capital LLC and Marc Andreessen of Andreessen Horowitz, have come out in favour of Dorsey, or some arrangement that keeps founders in control at Twitter. "I'm reflexively in favour of founders leading companies whenever possible," Andreessen said in an interview with Bloomberg Television.

For the past month, the Twitter stock has been at around the $26 price investors paid at its initial public offering in November 2013.

Part of the sell-off was triggered by Dorsey, who, after the company's second-quarter earnings report in July, bluntly stated it would take a while before Twitter was able to reverse a slowdown in growth. He called its product performance "unacceptable".

The company is working on plans to fix that, including a new feature that will aggregate the best content on Twitter around live events, making it available to people who aren't logged in. That might be a bigger challenge after the recent exits of executives such as Todd Jackson, who left for Dropbox, after helping Twitter debut its Highlights product, and Christian Oestlien, who helped drive growth and is now with YouTube. Trevor O'Brien, another product leader, has also left.