Bloomberg 
 
 Dick Costolo is stepping down as chief executive of Twitter Inc. on July 1, as the social media company struggles to convince Wall Street of its growth strategy. 
 
 The company said Chairman and co-founder Jack Dorsey will take over as interim chief executive. Twitter TWTR, +0.00% will search for a permanent CEO both within the company and outside it, with the search committee consisting of board members Peter Currie, Peter Fenton and Evan Williams. 
 
 “I am deeply appreciative of the confidence the board, the management team and the employees have placed in me over the years, and I look forward to supporting Twitter however I can going forward,” Costolo said in a statement. 
 
 The abrupt change comes after months of growing pressure from investors amid mixed messages, a series of executive changes and disappointing growth. Twitter shares rallied sharply in after-hours trading, up 7.3% to $38.45. 
 
 Costolo has attempted to right the ship in recent months, trying to get investors to focus on the size of Twitter’s reach—an audience that sees Twitter content but doesn’t use the service—instead of the 302 million monthly active users who sign in, a user base that has only grown 18% over the last year and remains about one fifth the size of users who log into Facebook Inc. FB, +0.77% 
 
 An extended version of this report appears on WSJ.com 
 
 More from MarketWatch 

 Embattled Twitter CEO Dick Costolo will step down on July 1, the company said Thursday. 
 
 
 
 Costolo will remain on the social media company's board while Chairman and co-founder Jack Dorsey will take the position on an interim basis. Twitter will look for successors both internally and externally, but Dorsey suggested on a call after the announcement that there would not be any strategy changes. 
 
 Many investors and analysts have called for a shakeup amid a sluggish run for Twitter's stock. The company has struggled to expand its user base and grow revenue through advertising and other streams. Investors reacted positively to Costolo's departure Thursday, as shares spiked as much as 9 percent in extended trading. 
 
 
 
 Read MoreTwitter CEO and board are 'totally in sync' 
 
 
 
 But sources told CNBC that Costolo was not forced out, and that it was actually his decision to step down, something he had been considering for some time. 
 
 "This transition is not the result of anything more than Dick deciding to move on from his role as CEO," Dorsey said on a call after the announcement. "There is no connection with our near-term results." 
 
 In fact, Dorsey said that one of the reasons he is stepping into the interim role is that he believes Twitter's current business strategy is "right." 
 
 Read MoreTwitter is changing how users chat privately 
 
 

 Dick Costolo is stepping down as Twitter Inc.’s chief executive after five years, as Wall Street began losing faith in him and the social-media company’s future growth. 
 
 The move puts a spotlight back on co-founder and Chairman Jack Dorsey, who will serve as interim CEO while he remains chief executive of payments startup Square Inc. Mr. Dorsey was Twitter’s first CEO from May 2007 to October 2008. 
 
 Twitter...
– Dick Costolo is stepping down as CEO of Twitter after about five years. The company announced the news in a press release but provided no explanation. CNBC doesn't sound shocked, however: "Many investors and analysts have called for a shakeup amid a sluggish run for Twitter's stock," says its report. "The company has struggled to expand its user base and grow revenue through advertising and other streams." Twitter co-founder Jack Dorsey, 38, will be interim CEO until a replacement is found. The move takes effect July 1, and the 51-year-old Costolo will remain on the board of directors. With Twitter's base of 302 million active monthly users up a relatively sluggish 18% over the last year, the Wall Street Journal reports that Costolo was trying to convince investors that they should look at the larger number of people who see Twitter's content even if they don't have an account. "His efforts appear to have fallen short," says the Journal. Shares rose sharply after the news, up 7.3% to $38.45, reports MarketWatch.