In other words, Dorsey would have to choose between the two companies.
That declaration, as it seems to have turned out, has been a largely empty one. The idea that Dorsey might return gained steam among people both inside and outside the company over the past few months even though he had no intention of leaving Square. He even referred to the companies as his two children when discussing the dilemma, according to a source. Another in-house candidate, head of revenue Bain, was also seriously considered and is very popular inside Twitter HQ. But Bain has refused to be considered for the job so long as Dorsey still wanted it, according to sources. So Dorsey it is.
There's much to be done at Twitter, which is going through arguably the roughest stretch in the company's history (which is saying something). The stock hit an all-time low in late August, and those close to the company are concerned about a lack of product vision coupled with the recent departure of three top product executives. Twitter's product team has since been restructured, with Jeff Seibert, who was running Twitter's developer products, now in charge of Twitter's core flagship product instead.
Dorsey said himself on the last earnings call that Twitter's product team needs to step up, and those close to Twitter believe that the company's product woes are a major reason Dorsey, who is very much a product visionary, was brought back in.
But while Twitter has finally filled its top position, it's likely that Dorsey's return will mean the departure of others from Twitter's upper ranks. Longtime head of communications Gabriel Stricker has already been ousted. Costolo was well liked internally, but criticized for failing to articulate Twitter's long-term mission. Dorsey is very much the opposite, and those who have worked with him say he can be ruthless if you disagree with his vision.