X is ‘close to breakeven’ says CEO Linda Yaccarino

By Clare Duffy, CNN

New York (CNN) — X CEO Linda Yaccarino, leader of the platform formerly known as Twitter, said the company is keeping an eye on new competitor Threads, despite the sharply slowing growth of the rival app from Meta.

“Threads did jump in with a ton of hype and a launch pad from their Instagram users … [but] it’s dropped off dramatically,” Yaccarino told CNBC Thursday in her first interview as CEO of the company now called X.

“But 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.”

Still, Yaccarino said X remains largely focused on its own future as the company chases profitability, and that Threads may be looking at its past.

“What we can see is that [Threads] may be building to what Twitter was — enter rebrand, enter X — and we’re focused on what X will be, and it’s an entirely different roadmap and vision,” she said.

Staving off competition from Meta’s Threads and other rival platforms is just one of the things Yaccarino is now tasked with after taking over from owner Elon Musk as X’s CEO in June. In just her first two months, the company underwent a massive rebrand from Twitter to X in hopes of transforming into an “everything app” similar to China’s WeChat, and has continued to warn of challenges reviving its core advertising business. Musk, who is now the company’s chief technology officer, has also been preparing for a cage fight with Meta CEO Mark Zuckerberg.

Yaccarino joined the company after months of turmoil caused by Musk’s takeover, including mass layoffs, controversial policy decisions and various legal battles.

But on Thursday, she doubled down on the company’s vision and explained why it retired its highly recognized brand name.

“The rebrand really represented a liberation from Twitter, a liberation that allows us to evolve past a legacy mindset and to reimagine how everyone … around the world is going to change how we congregate, how we transact, all in one place,” Yaccarino said, adding that users would soon be able to make video calls and payments through the platform.

“It’s developing into this global town square that is fueled by free expression, where the public gathers in real time,” she said.

Yaccarino said that the company is returning to growth mode after months of slashing costs through ongoing layoffs, infrastructure and office space reductions and, in some cases, allegedly holding back on paying its bills and employee severance. Twitter’s staff has shrunk from nearly 8,000 employees to just around 1,500 workers since Musk’s takeover, Yaccarino said.

“Are we hiring? Yes,” Yaccarino said. “I get to come in and shift from this cost discipline to growth … the future is bright.”

Challenges ahead

Threatening to stand in the way of that evolution are the company’s very real business challenges. Musk last month disclosed in a post that, due to a 50% drop in advertising revenue and a “heavy debt load,” the platform is still losing money. After Musk bought Twitter for $44 billion last October, the company’s value now stands around $15 billion, according to a May disclosure from a Fidelity fund.

Yaccarino, a former marketing executive with NBCUniversal, was brought on to Twitter in part to help revive its advertising business. And she said on Thursday that the company is “close to breakeven.”

“Coca Cola, Visa, State Farm is a huge partner, they’re coming back — the last bunch of weeks, continued revenue growth,” Yaccarino said.

But maintaining the ad business has been an uphill battle for the site since Musk’s takeover. Hordes of advertisers halted spending on the platform over concerns about content moderation, mass layoffs and general uncertainty about the company’s future. Musk has also defended his own controversial tweets, telling CNBC in May, “I’ll say what I want, and if the consequence of that is losing money, so be it.”

Yaccarino pointed to the company’s “freedom of speech, not freedom of reach” policy that aims to limit the reach of so-called lawful but awful content on the platform and to protect brands from having their ads appear alongside such content. X on Tuesday rolled out additional brand safety controls for advertisers, including the ability to avoid having their ads show next to “targeted hate speech, sexual content, gratuitous gore, excessive profanity, obscenity, spam, drugs.”

“I wrap my security blanket around you, my brand and my CMO, and say your ads will only air next to content that is appropriate for you,” Yaccarino said Thursday.

The-CNN-Wire
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