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Unveiling uncertainty: Insights from Linda Yaccarino’s Interview on X’s (formerly Twitter) direction under Elon Musk

August 11, 2023
in General
Unveiling uncertainty: Insights from Linda Yaccarino’s Interview on X’s (formerly Twitter) direction under Elon Musk
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The revelations from a comprehensive interview conducted by Linda Yaccarino, CEO of X (formerly Twitter) with CNBC today highlight a consistent theme: the more the tech boss tries to shed light on the platform’s path under the enigmatic proprietor Elon Musk, the deeper the labyrinth of questions seems to become.

Each time Yaccarino addressed a contentious aspect of the business, it seemed to trigger a cascade of new concerns, akin to an unending storm of uncertainty.

Below are the main takeaways from the conversation. 

Yaccarino on brand safety 

X’s struggle with brand safety is an ongoing tangle of content control hurdles. Traceable back to Musk’s takeover almost a year ago, it’s noteworthy that this issue persists as a primary concern for advertisers, despite Yaccarino’s apparent dismissal of its significance.

Speaking of her experience at NBC Universal working with Twitter as the company’s social partner, Yaccarino noted: “Twitter was safe, and we felt comfortable always being there.” In other words, the complete opposite experience to what advertisers have on the app now.

When confronted with worries about a steady stream of inappropriate content, a surge in hate speech, and the promotion of conspiracy theories — issues even endorsed by X’s owner — she steadfastly upholds the notion that the platform remains a secure environment for brands.

“By all objective metrics, X is a much healthier and safer platform than it was a year ago. Since acquisitions, we have built brand safety and content moderation tools that have never existed before at this company… I can confidently sit in front of you and say that 99.9% of all posted impressions are healthy.”

But despite CNBC’s Sara Eisen questioning how X defines “healthy”, Yaccarino somewhat avoided the question.

“We have to remember what’s at the core of free expression. We want to make it a healthy debate and discourse. Free expression at its core will really only survive when someone you don’t agree with says something you don’t agree with. And what a great place we would live in, if we were able to return to a healthy, constructive discourse amongst people that we don’t agree with… Labelling or deciding certain people are good or bad is not a universal thing. There are some people that disagree with us on our individual opinions, that’s why we’re doubling down on brand safety.”

She frequently referred to the “freedom of speech, not reach” policy which was introduced as a way to deter and remove hate speech: 

“If you’re going to post something that’s illegal or against the law, you’re gone, zero tolerance. But more importantly, if you’re going to post something that is lawful, but it’s awful, you get labeled. You get labeled, you get de-amplified, which means it cannot be shared.” 

But what about brands? 

“Brands are protected from the risk of being next to that content. And it’s also why it’s really important to note that once a post is labelled, it can’t be shared.” 

Yaccarino on her role as CEO 

While the industry initially welcomed the news of Yaccarino taking the reins as X’s new CEO, the subsequent escalation of platform turmoil since her appointment has failed to bolster confidence. This is partly attributed to Musk’s tendency to pursue his desires without constraint, leaving others to manage the resulting aftermath. This situation has prompted certain observers to raise doubts about Yaccarino’s actual authority as the company’s CEO.

Speaking about how their roles are defined, Yaccarino said:

“Elon focuses on product design. He leads a team of extraordinary engineers and focuses on new technology. So Elon is working on accelerating the rebrand and working on the future. And I’m responsible for the rest: running the company, from partnerships, to legal, to sales, to finance.” 

When probed by Eisen about whether she actually has autonomy in her role, Yaccarino responded: 

“Yes, I have autonomy. I have a great partner in Elon. It’s been eight incredibly supportive weeks. The way Elon and I talked about it before I started was that while our lanes are really clear and defined, we are brought together by the belief in what we’re trying to achieve.”

Still confused? Yaccarino expanded on the point:

That “joint belief being free expression being the foundational core value of the company… Put it simply as almost like a relay race. Elon works on the technology. He dreams of what’s next and passes the baton to me. I bring it to market for economic prosperity not only for our company, but for all of our customers like our advertising partners.”

Certainly, they may be aligned in their vision, yet the reality remains that Yaccarino’s appointment was strategic, leveraging her background, and intended to re-engage advertisers – a mission that becomes increasingly challenging when the company’s owner openly acknowledges his indifference to losing advertising revenue due to his statements or actions. Nevertheless, this doesn’t render her role insurmountable, Yaccarino said. 

 “It definitely does not make my job impossible,” she continued. “It fuels more of an ambition for my job to make sure that everyone, including Elon, is entitled to their own opinion,” before suggesting that “We all do things that we reconsider.”

Yaccarino on Twitter’s rebrand to X

Last month, Twitter underwent an official rebranding to X, which garnered a diverse range of reviews.

On one side, dedicated Musk supporters rallied behind the transition. Yaccarino noted, “Three out of four within our user community express positive sentiment. Many of them are highly enthusiastic about the rebrand due to their familiarity with us. It’s become a part of their routine, as they comprehend our ethos and direction.”

Conversely, the remainder exhibited notable dissatisfaction with the shift.

The truth is, the trajectory was set in motion once Musk took the reins of Twitter. He always planned to create an everything app, and Twitter simply became the foundation to build it on.

“Elon has been talking about X, the everything app, for a very long time. I was joining the company to partner with Elon to transform Twitter into X, the everything app.” 

But given Yaccarino’s history in advertising, and understanding that branding is important to a business and getting buy in, the question still remains: why kill off a globally recognised brand, on what felt like a bit of a whim:

“If you stay as Twitter or you stay as whatever your previous brand is, change tends to be only incremental. And you get graded by a legacy report card. And at X, we think about what’s possible, not the incremental change of what can’t be done. If you think about the velocity of product changes and infrastructure improvements that have happened over the last 10 months, it answers the question of why rebrand… we’re not limited by that legacy thing.” 

The company’s finances

Given that Musk stripped the company of about 80% of its employees, and advertisers aren’t spending anywhere near the amount they were, it’s easy to assume that X is still losing a lot of cash. Only last month, Musk himself admitted that X still retains a negative cash flow due to a 50% drop in advertising dollars. 

As Yaccarino confirmed: “We’re a company that has gone from 8,000 people, and has gone through a very necessary cost discipline exercise, to about 1,500 people. So it makes sense that there would be some type of impact of presence.” 

But when asked when the company will reach cash flow positive, Yaccarino said: “I’ve been at the company eight weeks, the operational run rate right now, we’re pretty close to break even. We’re pacing well when you think about the cost discipline that I mentioned,” before stating that the company is already hiring for new roles. 

Yaccarino on X’s audience (it apparently has half a billion users)

Both Musk and Yaccarino have frequently suggested that X has experienced “all time highs” of users — but until now, neither one has admitted publicly what that number looks like. That is until Yaccarino mentioned the “half a billion users who are on the platform”. 

Undoubtedly, this marks a significant achievement for X, especially considering the company’s reported user count of approximately 386 million as of December 2022, according to Statista. However, while X appears to have taken around seven months to welcome an additional 132 million users, its primary competitor Threads managed to amass over 100 million users within a mere five days.

Yaccarino on whether Threads is a threat to X?

Although X asserts that it isn’t concerned about Threads, Meta’s rival app, recent actions such as Musk prohibiting links to Threads and any references to it in X’s posts, along with the sudden generous compensation to creators coinciding with Threads’ launch, could suggest a different perspective.

And Yaccarino admitted as much when she said that the team still plays close attention to their new rival.

“You can never ever take your eye off any competition because they’ll continue iterating and as much as the launch has stalled, we’re keeping an eye on everything that they’re doing. What we can see is that they may be building to what Twitter was. We’re focused on what X will be. And it’s an entirely different roadmap and vision.”

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