A new CEO won’t fix Twitter’s biggest problem

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New York
CNN
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During his six months as Twitter’s CEO and owner, Elon Musk decimated its ad business, alienated some news publications and VIP users, and plunged the platform into a constant state of chaos.

Now, a new chief executive will be tasked with trying to turn things around.

Musk announced on Friday that he would in the coming weeks hand the CEO role over to Linda Yaccarino, a longtime media executive and former chairman of global advertising and partnerships at NBCUniversal. Yaccarino has said little publicly so far, beyond noting her excitement to “transform this business together.”

Twitter is in desperate need of stability from a leader. And Yaccarino brings the ad industry chops that Twitter sorely needs to lure back top advertisers and boost its business after a turbulent period. But she may struggle to address Twitter’s biggest problem: Elon Musk.

Although Musk is handing off the CEO title — and, perhaps, trying to shed some of the accountability that comes with it — the billionaire remains firmly in charge of the company as its owner and executive chair. Musk will still be in the C-Suite as Twitter’s chief technology officer. And he continues to be Twitter’s most-followed user, meaning his controversial statements to his nearly 140 million followers could still create headaches for the company.

In tech, the CEO is often the public face of the brand. But Musk will almost certainly continue to fill that role, with or without the title, likely to Twitter’s detriment.

Just this week, Musk drew backlash for baselessly attacking billionaire George Soros, a frequent target for antisemitic conspiracy theories, saying the financier “hates humanity.” Musk’s Twitter also faced criticism in recent days for removing some tweets and accounts at the behest of Turkey’s government amid the country’s election; the company later said it would object to the removal requests in court.

On Tuesday, Musk said he “didn’t care” if his controversial tweets drew the ire of Twitter advertisers or Tesla shareholders. “I’ll say what I want to say, and if the consequence of that is losing money, so be it,” Musk said in an interview with CNBC.

“The question is: can she help balance [Musk]?” said Tim Hubbard, management professor at University of Notre Dame’s Mendoza College of Business. He added that top ad buyers are more likely to take calls from Yaccarino than from Musk, who has previously said he hates advertising.

But “the big problem with Twitter right now is, they’re on a pathway that turns advertisers off, turns users off,” Hubbard said. “Unless there are fundamental changes at Twitter, I don’t think [the leadership change] is going to have the immediate effect that Elon is hoping it will have.”

Twitter did not respond to a request for comment on this story.

The Musk issue was on full display at NBCU’s ad upfront this week, which was held shortly after Yaccarino resigned from the company following rumors of her appointment as Twitter’s CEO. On stage at the event, which aimed to promote NBCU’s platforms to advertisers, a talking bear sang to audience members: “Twitter may seem like the place to begin, but Twitter just let all the crazies back in.”

Even if Musk pulls back on his tweeting, a feat he seems constitutionally incapable of achieving, it will be no easy task for Yaccarino to revive Twitter’s advertising business — let alone expand it.

Many major advertisers left the platform following Musk’s takeover over concerns about an uptick of hate speech, frustrations over layoffs of much of the company’s ad and safety teams and general uncertainty about the platform’s future. Just 43% of Twitter’s top 1,000 advertisers as of September, the month before Musk’s takeover, were still advertising on the platform as of last month, according to data from market intelligence firm Sensor Tower.

But for many, leaving Twitter may not have been a particularly difficult call.

Even in the best of times, Twitter was an also-ran in the digital ad space compared to tech giants like Meta and Google, with a smaller user base and less sophisticated ad targeting technology. And Musk’s takeover came as many advertisers have pulled back their digital ad spending across the board during a precarious moment for the economy. That could only add to the difficulty Yaccarino will face in shoring up Twitter’s business.

Musk, for his part, has been attempting to supplement, and potentially largely replace, Twitter’s ad business with subscriptions, but it appears that only a tiny fraction of Twitter users have bought in. The selection of Yaccarino suggests a recognition on his part that the company he bet $44 billion on will continue to be reliant on ad sales for the foreseeable future.

It’s unclear how much freedom Yaccarino will have to hire additional staff to support her likely remit to revive advertising on Twitter after Musk laid off around 80% of the company’s staff last year. And even if she is able to hire, top talent may be wary of joining Twitter after Musk upended the company’s culture and reportedly rolled back benefits like work-from-home and extended parental leave.

“Personnel is going to be a huge challenge for her … if tech workers are looking for a stable working environment, they will probably stay away from Twitter,” Hubbard said.

But Musk’s ongoing influence remains the biggest potential hurdle.

Musk has said he will oversee product, technology and software and systems operations, while Yaccarino will focus on business operations. The announcement has left open the question of whether Musk will remain in charge of controversial policy decisions, many of which — including allowing users to buy blue verification checks and restoring the accounts of rule violators, including white supremacists — have threatened Twitter’s popularity with users and advertisers.

“Cleaning up Twitter requires reversing Musk’s dangerous policy decisions, reinvesting in content moderation and enforcement, and restructuring the platform’s governance,” Jessica Gonzalez, co-CEO of media watchdog Free Press who helped found the #StopToxicTwitter campaign encouraging advertisers to avoid the platform, said in a statement.

“Musk is setting future CEO Linda Yaccarino up to fail — as long as he continues to make the platform toxic, it will be impossible to lure back advertisers and users,” she said.”

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