Twitter chief executive Dick Costolo is to step down on 1 July following growing impatience among investors over slow growth at the social media company.

Shares on Wall Street soared on the news, rising by 7.8% in after-hours trading following the announcement. Jack Dorsey, cofounder and chairman, will take over as unpaid interim CEO. The company’s regulatory filing stated that Mr Dorsey had “agreed to forego any compensation for your role as interim chief executive officer”.

Anthony Noto, Twitter’s chief financial officer, said Mr Costolo will not receive a severance package because he voluntarily stepped down.

However, he has struggled to monetise the service and investors have been underwhelmed by the company since its flotation on 7 November 2013. In that period it has lost 20% of its value.

They have also been disappointed by declining revenue growth. Costolo has been CEO of Twitter since October 2010.

It came to market admitting that it would not turn a profit for years, but investors are getting twitchy about just how long it is likely to take. Users are also proving a puzzling lot.  Some 44% of those who sign up only do so to monitor what others are tweeting and have never posted a single message themselves.

Unlike bigger online services, such as Facebook and Google, it is also being left behind in the inevitable development of new ideas and in acquiring other businesses which bring in new products and users. Even on the innovation front, Twitter is falling short.

Facebook has acquired more than 40 companies including the instant messaging service Whatsapp which it bought for $19 billion last year, and the photo sharing company Instagram which it aquired for $1billion in 2012.

Twitter needs to keep its users interested and advertisers believing the numbers will keep on growing. According to one source, Facebook commands a 7.93% share of the $145bn worldwide digital advertising market. Google, the runaway leader, has 31.42%, while Twitter has just 0.87%.