Amidst a sea of fluctuating fortunes and challenges, Linda Yaccarino, the CEO of the company now known as X (formerly Twitter), made a bold statement about the platform’s future profitability. Speaking at the recent Code Conference in Dana Point, California, Yaccarino declared that X is on track to be profitable by early 2024. This pronouncement comes against a backdrop of financial ups and downs for the platform, alongside a recent change in ownership and significant restructuring.
A Return of the Advertisers
One of the highlights of Yaccarino’s talk was the return of advertisers to the platform. “90% of the top 100 advertisers have returned to the platform in the last twelve weeks alone,” she claimed. This is a significant development, especially considering the platform’s advertising revenues had seen a steep decline, dropping by more than 50%, following changes made by Elon Musk after acquiring the company.
A Struggle Toward Profitability
Yaccarino’s statement about profitability is a significant one for a company that has struggled financially. X has not been profitable for its initial 13 years, and although it reported a profit in 2019, it has since returned to non-profitability. In 2022 alone, Twitter generated $4.4 billion in revenue, marking an 11% decline compared to the previous year. The net loss for Q2 2022 stood at $270 million, despite revenues of $1.17 billion.
As part of its strategy to reach profitability, X has also implemented severe cost-cutting measures, including a reduction of its workforce. The company has downsized its staff from 8,000 to about 1,500. However, this decision comes with its own set of controversies, including pending lawsuits over unpaid rent for office space in several countries and the non-payment of severance to laid-off employees.
User Engagement and Controversies
Yaccarino also claimed that user engagement, measured by time spent on the platform, has increased since June. However, this assertion was challenged by CNBC’s Julia Boorstin, citing data from Apptopia. According to the analytics firm, X downloads have decreased by 30% in the two months following its rebrand from Twitter.
Uncertain Future Amidst Conflicting Signals
Yaccarino’s statements about profitability and the return of advertisers are optimistic indicators for X. However, these come amidst conflicting signals about the platform’s future, especially regarding its monetization strategy. Musk’s impromptu statements about moving to a subscription-based model and Yaccarino’s apparent lack of awareness on this significant shift add layers of uncertainty to the platform’s future.
The Road Ahead
As X aims for profitability by early 2024, it will have to navigate through financial, operational, and reputational challenges. While the return of advertisers is a positive sign, the company’s route to profitability is fraught with uncertainties. Whether X will manage to turn a new leaf and become a profitable entity remains to be seen. Until then, all eyes will be on how the platform maneuvers through these challenging times.