Yaccarino Exit From X Lets Musk Shun Ads, Put Focus On AI
The main part of Yaccarino’s job since she was hired in 2023 has been to convince advertisers that X is a safe place to market their brand and spend their money.
Linda Yaccarino’s exit as chief executive officer of X follows a long and contentious effort to win over advertisers dismayed by the platform’s direction under Elon Musk’s ownership.
Her departure paves the way for X to lean harder into a new identity as a source of data for artificial intelligence training, supporting xAI’s chatbot Grok, and spend less time and attention on wooing advertisers who may be skittish about their messages appearing alongside potentially damaging content.
X, previously known as Twitter, has long been dependent on advertising for the majority of its revenue. Before Musk’s takeover in 2022, advertising made up roughly 92% of total revenue at the company. The main part of Yaccarino’s job since she was hired in 2023 has been to convince advertisers that X is a safe place to market their brand and spend their money.
Musk, though, made that job infinitely harder. The X owner has dabbled in misinformation, antisemitism and bullying, setting an example for others to follow and an expectation for what you may find on X. At one point he told marketers to “go f—-” themselves from a conference stage; nearly three years into his ownership, X is still facing major brand safety problems. Just this week, X had to remove posts from the service after Grok’s account started spewing antisemitic rants.
Musk’s pledge to uphold free speech has been at odds with a platform that makes the bulk of its revenue selling brand advertising. Social media executives, including Twitter co-founder Jack Dorsey, have long wrestled with the conundrum: Advertisers won’t show up unless you police user speech, and policing user speech is not always in line with the idea that you can say anything you want.
Josh Earnest, the former Obama press secretary who now runs communications and advertising for United Airlines Holdings Inc., said the company hasn’t advertised on X since Musk’s takeover.
“It’s not about taking a moral stand. It’s about brand safety concerns,” Earnest said Wednesday. “Our decision not to dedicate ad dollars to that outlet is a firm one in my mind.”
Even though advertising revenue for X is expected to rise this year to $2.3 billion globally, it’s still a fraction of what it was before Musk took over. Earlier this year, X combined with Musk’s artificial intelligence startup xAI to create a new company that’s mostly focused on AI. Advertising may not be worth the trouble for a company already burning through $1 billion per month on data centers and other expenses associated with building large language models.
Some of the advertisers who still spend on X say they’re doing so to avoid getting in Musk’s crosshairs. X has gone so far as to sue advertisers who aren’t spending money on the platform, exposing its own complicated relationship with upholding “free speech.”
If Yaccarino is replaced, the type of executive Musk chooses may indicate whether he considers advertising and all the headaches that come with it a key focus moving forward. Given X’s recent merger with xAI, it seems possible that the social network’s main business purpose at this point is to provide training data for chatbots, which increasingly rely on real-time information to stay relevant and answer user questions.
A spokesperson for X didn’t respond to requests for comment.
After Musk merged his two companies in March, venture capitalist and “All In” podcast host Chamath Palihapitiya called X’s dataset “the most complete corpus of scaled, real-time information on the Internet.”
Putting a product or engineering executive atop X could signal a new direction. When Musk hired Yaccarino from NBC Universal two years ago, it was a sign that he was still committed to advertising — a commitment he reinforced by showing up at Cannes Lions in 2024 to speak at the conference alongside WPP Plc’s Mark Read. Someone with a different background, especially an AI background, would send a very strong message.
At Cannes Lions this year in the South of France, X’s presence was largely subdued compared with years past. In fact, Musk didn’t show up at all.
