X which was formerly known as Twitter has been in the news ever since billionaire Elon Musk acquired the company last October and took it private. He later quit as the company’s CEO and hired former NBC Universal advertising executive Linda Yaccarino to lead the company.
In a recent interview, Yaccarino said that she has autonomy under Musk and talked about the reasoning for changing Twitter’s name to X. She also stressed that brands have been returning to X and tried to downplay the threat from Instagram’s Threads. Here are the key takeaways from the interview.
Why did Twitter rebrand to X
Last month, Musk rebranded Twitter as X and replaced the iconic blue bird with an X logo. As with everything Musk, even the rebranding wasn’t free from controversies and there was confusion when the company was trying to remove the Twitter logo from its headquarters.
Musk said that “Twitter was acquired by X Corp both to ensure freedom of speech and as an accelerant for X, the everything app.”
The Tesla CEO added, “The Twitter name made sense when it was just 140-character messages going back and forth – like birds tweeting – but now you can post almost anything, including several hours of video. In the months to come, we will add comprehensive communications and the ability to conduct your entire financial world.”
Last year, Musk reportedly told Twitter employees that “You basically live on WeChat in China. If we can recreate that with Twitter, we’ll be a great success.” Musk’s obsession with China is not new and he has praised the company’s manufacturing prowess and work ethics of Chinese employees in the past.
After announcing the rebranding, Musk tweeted that the idea behind changing the logo to X is “To embody the imperfections in us all that make us unique.”
Linda Yaccarino on why Twitter rebranded as X
After the Twitter rebranding, Yaccarino had said, “It’s an exceptionally rare thing – in life or in business – that you get a second chance to make another big impression. Twitter made one massive impression and changed the way we communicate. Now, X will go further, transforming the global town square.”
Now in an interview with CNBC Yaccarino said that the rebranding to X is in line with Musk’s vision for the company and he was considering doing so ever since he acquired the company. She added, “Even when we announced that I was joining the company, I was joining the company to partner with Elon to transform Twitter into X, the everything app.”
Yaccarino emphasized, “The rebrand represented really a liberation from Twitter.”
Twitter’s financial woes haven’t ended
There was an exodus of advertisers from Twitter after Musk acquired the company and last month, he admitted that the company is still losing cash. Responding to a tweet about recapitalization, Musk said, “We’re still negative cash flow, due to (about a) 50% drop in advertising revenue plus heavy debt load.”
The billionaire added, “Need to reach positive cash flow before we have the luxury of anything else.”
His comments come barely two months after he claimed to have performed a “major open-heart surgery” on the social media company to make it viable.
Notably, previously Musk said that Twitter is on track to hit $3 billion in revenues in 2023 which is way below the $5.1 billion that the company reported in 2021 – the last full financial year before Musk took it private in October 2022.
Musk has taken several cost-cut actions since he acquired Twitter – including lowering the headcount by almost 80%. Many of the former employees have sued Twitter, including over unpaid legal bills.
The company is also facing lawsuits from landlords, vendors, and consultants over unpaid bills.
Musk has been on a cost-cutting spree and has taken aggressive actions to lower the company’s cost base including shutting down some offices.
Musk previously said that because of these actions, Twitter’s non-interest expenses in 2023 would be around $1.5 billion – $3 billion lower than what they would have been otherwise.
Separately, Twitter has a debt load of $13 billion which Musk took to finance the $44 billion acquisition.
Linda Yaccarino says advertisers are coming back
Amid a perception that Musk is still running the show at X despite having officially quit as the CEO, Yaccarino said that she has “autonomy” under him and emphasized, “Mine and Elon’s roles are very clear.”
Yaccarino meanwhile said that advertisers have been returning to the platform – some of the big advertisers like Coca-Cola have restarted advertising on the platform since she took over.
Yaccarino played down the threat from Threads
Meta Platforms’ Threads which is the Twitter-like platform from the social media giant, added millions of users in the initial days. The sharp growth in Threads subscriber base can be attributed to two reasons. Firstly, the app is linked to Instagram which is the fourth most popular social media network with over 2 billion users globally.
The user base acted as a captive target market for Meta Platforms and helped it hit the 100 million milestone within days. To put that in perspective, Twitter has around 250 million active users.
Also, the strong growth in Threads’ user base can be attributed to the growing disenchantment with Twitter, at least among a section of the users.
Yaccarino meanwhile tried to play down the threat from Threads while adding “you can never ever take your eye off any competition.”
Zuckerburg sees Meta Platforms as a key business
During the Q2 2023 earnings call, Meta CEO Mark Zuckerburg said, “I’m quite optimistic about our trajectory (of Threads) here. We saw unprecedented growth out of the gate. And more importantly, we’re seeing more people coming back daily than I’d expected. And now we’re focused on retention and improving the basics.”
He added that the company would then focus on increasing the user base which would eventually be followed up with monetization.
Overall, it has been less than nine months since Musk acquired Twitter and far from the turnaround that Musk is targeting, the platform continues to face newer issues.
The rebranding of Twitter from the iconic blue bird which has been so closely associated with the brand to X might not help solve the multiple troubles that the company faces.
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