Vidostream | News, sport and opinion from the Vidostream's US Edition

https://vidostream.com

X CEO Linda Yaccarino Contends With Pitfalls of Sharing Power With Elon Musk

Tensions over the division of labor with Musk have stymied some of Yaccarino’s initiatives.

When Linda Yaccarino joined Elon Musk’s social-media company in 2023, she and the company’s owner said they would divide responsibilities. Photo: Vincent Isore/Zuma Press

When Linda Yaccarino joined Elon Musk’s social-media company in 2023, she and the company’s owner said they would divide responsibilities. Photo: Vincent Isore/Zuma Press

X Corp. Chief Executive Linda Yaccarino keeps running into a problem: She doesn’t always have the final say.

That was on display inside X earlier this year, when Yaccarino tried to strike a deal with Visa. She was aiming to solve two problems at once: Turn to an advertiser to commit to more spending on X, and partner with the financial brand to build a payments product, part of owner Elon Musk’s vision to make X an “everything app” offering digital banking and more. 

Yaccarino held discussions with Visa, according to people familiar with the matter, and pushed to announce a deal in the spring. 

Tensions over the division of labor at Elon Musk’s X are impeding some core initiatives, including restoring ad revenue. Photo: Richard Bord/WireImage/Getty Images
Tensions over the division of labor at Elon Musk’s X are impeding some core initiatives, including restoring ad revenue. Photo: Richard Bord/WireImage/Getty Images

 

Product executives who report to Musk resisted, saying it was premature for X to cede some control to another company over the design of a payments product, people familiar with the deliberations said. A deal didn’t happen on Yaccarino’s desired timeline.

When Yaccarino joined Musk’s social-media company in June 2023, she had the difficult task of fixing the company’s ad business, the key source of revenue, which had taken a major hit after Musk acquired the company in 2022. Even before the takeover, Twitter wasn’t consistently profitable.

At the outset, Musk and Yaccarino said they would divide responsibilities at the company, where she would handle sales and daily operations while Musk oversaw the engineers. The billionaire entrepreneur dislikes layers of management; however, he also leans on deputies who can handle daily responsibilities, as he splits his time across his six companies, which include electric-vehicle maker Tesla and rocket company SpaceX.

Tensions over the division of labor at X are impeding some core initiatives, including some payments efforts and restoring ad revenue. And inside X, some employees debate which executive they should go to for certain decisions, people familiar with the company’s operations say.

Yaccarino has said she benefits from the opportunity to work with Musk. “Who wouldn’t want Elon Musk sitting by their side running product?” she said at a conference last year.

While the power-sharing dynamic plays out inside of X, election-year political drama has energized the platform. In recent weeks, the debate between President Biden and former President Donald Trump, the attempted assassination of Trump, and Biden’s withdrawal from the presidential race all showed that X—formerly Twitter—remains a place many people are drawn to at big moments. The challenge now is whether X can make that interest persist

 

Musk complications

Another change at X in recent months was the renewed involvement of Steve Davis, one of Musk’s closest aides and president of Musk’s tunnel-building venture, Boring Co. His presence further complicated the situation between Musk and Yaccarino.

Davis has looked for ways to cut more costs at X and has examined employee performance, according to current and former employees. Among the areas of scrutiny, they said, has been Yaccarino’s ad sales department, where U.S. teams missed their sales targets earlier this year.

In a surprise to many employees, Yaccarino fired her deputy, Joe Benarroch, from X in early June, according to people familiar with the move. His departure came as X faced controversy over a new adult-content policy and Davis was looking at cutting some jobs from Yaccarino’s team, among other issues, some of the people said. Benarroch was one of Yaccarino’s first hires when she joined Twitter and had been a close lieutenant to Yaccarino at NBCUniversal, where she previously worked.

Davis, whose recent involvement at X was earlier reported by the Verge, was a linchpin in Musk’s initial push to overhaul then-Twitter after the takeover. Davis led efforts to cut hundreds of millions in costs, according to a lawsuit filed by former Twitter employees over severance.

 

For the 12 months through June, ad spending by big U.S. media-buying agencies on X was down 67% compared with the same period a year earlier, according to measurement firm Guideline. Photo: David Paul Morris/Bloomberg News
For the 12 months through June, ad spending by big U.S. media-buying agencies on X was down 67% compared with the same period a year earlier, according to measurement firm Guideline. Photo: David Paul Morris/Bloomberg News

Steve Davis, a close aide to Elon Musk, has looked for ways to cut more costs at X and has examined employee performance. Photo: Mark Ralston/AFP/Getty Images
Steve Davis, a close aide to Elon Musk, has looked for ways to cut more costs at X and has examined employee performance. Photo: Mark Ralston/AFP/Getty Images

 

Musk said this month he was relocating the headquarters of two of his companies, X and SpaceX, to Texas from California. X made plans to sublease excess space at its main office complex in San Francisco, people familiar with the plans said in July. Musk slashed the company’s head count after his takeover, citing financial challenges. Musk at times has thrown wrenches into Yaccarino’s plans, such as when he called off a video deal with newsman Don Lemon or when he told advertisers boycotting X to “go f— yourself.” 

Last year, Musk made the call to strip headlines from links because he thought headlines made posts look too big. Sales staff had warned internally against the change, saying it would hurt big accounts like news outlets, former employees said. Months later, X brought back headlines in a slimmer format.

 

Yaccarino has had the difficult task of trying to fix X’s ad business. Photo: Tom Williams/Zuma Press
Yaccarino has had the difficult task of trying to fix X’s ad business. Photo: Tom Williams/Zuma Press

 

Yaccarino has established other partnerships. She struck a deal this year for BetMGM to be X’s live-odds sports-betting partner, a deal that included BetMGM ramping up its ad spend on X and a fee, people familiar with the terms said.

X executives have talked with financial-technology companies, including Plaid and Marqeta, about various potential partnerships, people familiar with the discussions say. X also has been applying for money-transmitter licenses in states around the country, a key step toward offering payments features.

 

Ad challenges

A challenge for Yaccarino is that the longer advertisers stay off the platform, the harder it will be to convince them to return. Many have found their ads perform better on sites such as TikTok and Instagram, advertisers said.

For the 12 months through June, ad spending by big U.S. media-buying agencies on X was down 67% compared with the same period a year earlier, according to measurement firm Guideline.

Musk said earlier this year that X’s advertising and subscription revenues had started rising rapidly, without providing numbers. The business also has struggled with attracting users, according to outside data. Daily mobile-app users dropped almost 20% in the second quarter compared with the fourth quarter of 2022, when Musk acquired then-Twitter, according to estimates from market intelligence firm Sensor Tower.

X’s internal figures show its average number of global daily active users for the second quarter was 250.8 million, an increase of 1.56% from the same quarter in 2023, a person familiar with the figures said.

Yaccarino has gotten some positive reception among marketers around video content shared on X by professional publishers like sports leagues. She renewed a deal this year between X and the National Football League that represents a major draw for advertisers. 

Such efforts, however, haven’t made up for the dramatic downturn in X’s ad sales business. Several large agency executives say they haven’t seen a large-scale return to X, and some brands that have returned are spending less than before. 

Seven months after his “go f— yourself” outburst, Musk struck a more conciliatory tone during an ad industry gathering in France. Asked what he would say to advertisers considering returning to X, Musk said he believed it was “worth trying out.”

 

X made plans to sublease excess space at its main office complex in San Francisco, people familiar with the plans said in July. Photo: Josh Edelson/AFP/Getty Images
X made plans to sublease excess space at its main office complex in San Francisco, people familiar with the plans said in July. Photo: Josh Edelson/AFP/Getty Images

 

Write to Alexa Corse at alexa.corse@wsj.com, Suzanne Vranica at Suzanne.Vranica@wsj.com and Angel Au-Yeung at angel.au-yeung@wsj.com

Author: Editors Desk, Alexa Corse, Suzanne Vranica, and Angel Au-Yeung

Source: WSJ:

We are using cookies to give you the best experience on our website. By continuing to browse, you are agreeing to our Cookie Policy.
You did not use the site, Click here to remain logged. Timeout: 60 second