Why Twitter’s New CEO Matters
Elon Musk’s chaotic reign at Twitter appears to be coming to an end…sort of. The acting chief executive officer confirmed on Friday that veteran ad exec Linda Yaccarino is taking the helm, spurring a raft of jokes about a new “chief twit” finally coming to town and evicting Musk.
Not so fast. It’s not as if Musk was suddenly driven out. He chose Yaccarino and, as the outspoken tech billionaire still owns the company, he clearly plans to continue pulling many of the major levers, at least on the tech side.
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“I am excited to welcome Linda Yaccarino as the new CEO of Twitter!” Musk said, of course, on Twitter. The CEO hails from NBCUniversal, and according to his tweet, she will steer “business operations,” while he focuses on product design and technology.
Yaccarino joins at a crucial period, not just for the company, but big tech at large. The past year amounted to a painful lesson for Silicon Valley, which benefited from the pandemic’s lockdowns only to struggle in their aftermath, between chip shortages and supply chain issues to inflation trimming discretionary consumer spending and online advertising. After a series of dismal earnings quarters, early 2023 showed signs of a comeback. Many of the largest tech platforms that focused on artificial intelligence-based online ad products and services saw more profitability in the latest quarter — some for the first time in several quarters.
But it didn’t come without some serious cost-cutting, including waves of layoffs that sheared tens of thousands of employees.
“It was a blood bath,” one software developer told WWD, after his company just executed its second wave of pink slips. A middle manager at a large tech firm, he asked not to be named, as he wasn’t authorized to speak on the record. “It was like a guessing game — like, which teams would end up on the chopping block. Some of them just got here, and then they had to go scrambling. But it’s not like there’s less work. Just fewer people to do it.”
At Twitter, the Musk era saw its workforce drop substantially. Top executives were fired in short order and its workforce shrank in the months that followed, going from roughly 7,800 staffers to 1,500 as employees resigned or were laid off. In all, the company shed 80 percent of its workforce. The impact on its bottom line must have been consequential, but to what extent isn’t entirely clear. The company hasn’t publicly reported earnings since Musk acquired the platform in October.
But a December update to investors reportedly disclosed that year-over-year revenue and earnings shrank as much as 40 percent. That wasn’t entirely due to macroeconomic challenges. The messaging platform has struggled with profitability for years, but never more so than in recent times — in fact, Musk, framing his $44 billion acquisition deal, has often said that he saved Twitter from bankruptcy. However, since he took over, it has been bleeding advertisers.
Now, as the online ad business appears to be resurging, the CEO appointment speaks volumes about Twitter’s priorities.
Yaccarino, the ad chief credited with transforming advertising at NBCUniversal, brings years of experience to a role that will certainly involve boosting her new employer’s ad base. That will likely include building on commerce initiatives such as last year’s Twitter Shops and its livestream shopping proposition, as well as helping Musk pursue his vision of a super app that goes beyond paid Twitter Blue subscriptions and longer tweets, extending to creator incentives, online and crypto payments and more. He refers to it as “X,” which is in line with Twitter’s new parent, X Corp., a shell corporation that Musk formed.
As recently as April, pundits expressed confusion about whether X represents a new Twitter, a mini app inside the main platform or a separate app altogether akin to a WeChat clone. Friday’s tweet seems to make that absolutely clear now: “Looking forward to working with Linda to transform this platform into X, the everything app,” Musk added.
Yaccarino has worked in advertising for more than three decades and, over her 10-plus-year tenure at NBCUniversal, drove more than $100 billion in ad revenue. She landed on the public’s radar in 2018, thanks to her appointment to the President’s Council on Sports, Fitness and Nutrition during Donald Trump’s administration.
Previously, the Tesla and SpaceX honcho was well-known for an infamous distaste of online ads, so Yaccarino’s hiring is a notable pivot, although it’s not entirely surprising. One of Musk’s early goals was to turn Twitter into a $26.4 billion operation by 2028, and it’s hard to do that without advertising.
That’s a heavy lift for any new CEO, but it looks like Yaccarino can’t wait to get started. When she resigned on Friday, it was effective immediately, leaving Mark Marshall, president of advertising sales and client partnerships, to step in as interim chairman of advertising and partnerships.
Advertisers who blamed Musk for the chaos that drove them from Twitter may be relieved to see a new chief. Of course, this transition obviously comes with a bit of its own chaos. But considering Yaccarino’s bona fides, what happens next may depend less on what she can do — and more on how much control Musk can do without.
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