Elon Musk is finally stepping down from being Twitter’s CEO. Yesterday, he finally issued the tweet that his investors at Tesla (NASDAQ:TSLA) have been waiting for. In it, he confirmed that he has hired a new Twitter CEO and that the company’s new leader is female. Today, he confirmed the rumors that Linda Yaccarino would take the job. The longtime chief of global advertising and partnerships at NBC brings significant experience. The Washington Post reported that Yaccarino and Musk were “in advanced talks about the position” as of yesterday.
Musk also noted in his first tweet that the new Twitter CEO would start in six weeks. This means that Yaccarino will have a truly unique opportunity to reform a fallen company. She will be inheriting a project that no other CEO has seen before. Twitter has undergone considerable changes since Musk took it over in October 2022, most of them not for the better. Getting it back on track will require significant changes from what Musk has done.
What the New Twitter CEO Needs to Do
Can Twitter be turned around after Musk steps down? Absolutely, but it won’t be easy. Musk’s quest to remake the social media giant into a digital town square where all voices are heard has not succeeded. And on that front, we can see the first radical change that Yaccarino as CEO should make.
Before taking over Twitter, Musk accused the platform of censoring certain voices, claiming it did not support free speech. Unfortunately, things have moved in the opposite direction since he assumed control. Many reports have indicated that hate speech has surged on Twitter under his leadership. The New York Times provided the following breakdown of how it has changed:
“Before Elon Musk bought Twitter, slurs against Black Americans showed up on the social media service an average of 1,282 times a day. After the billionaire became Twitter’s owner, they jumped to 3,876 times a day.
Slurs against gay men appeared on Twitter 2,506 times a day on average before Mr. Musk took over. Afterward, their use rose to 3,964 times a day.”
It doesn’t take much to see that this change hasn’t been good for Twitter’s user count. According to the MIT Technology Review, between Oct. 27 and Nov. 1, 875,000 users intentionally deactivated their accounts. That’s not counting the 497,000 accounts that Twitter suspended. More users have been compelled to abandon Twitter not only because of the rising hate speech but because of the rise in disinformation that the platform has also seen since then.
Media watchdog NewsGuard reports that Twitter accounts that routinely spread false information have seen significant boosts under Musk. Insider Intelligence forecast that Twitter could lose as many as 32 million users in two years if no changes are made.
When Twitter loses users, it loses advertisers. One month after Musk’s takeover, Media Matters for America found that over half the platform’s top advertisers had left. That meant a loss of nearly $2 billion in revenue. However, with Yaccarino as CEO, Twitter could bring it all back by reinstating the former checks and balances that kept hateful language and misinformation at bay before Musk.
Let TWTR Trade (Again)
Twitter would also be better served if it were publicly trading again. Musk took it private because he did not want a board of directors telling him what to do. However, if someone had stopped him from making some of his reckless decisions, Twitter might add more users and, thus, more advertisers. The system of checks and balances exists for publicly traded companies to be run as efficiently as possible. If Twitter could trade again, it would benefit from a more diverse range of perspectives offering insight into its operations.
It’s important to remember that Twitter has been profitable and could be again. However, it is clear that Musk’s vision for Twitter does not serve the company’s best interests. Naming Yacarino as its new CEO is the best thing he has done for the company, primarily because it will allow her to reverse the damage he has done.
That said, even with a new CEO Musk doesn’t plan on entirely disconnecting himself from Twitter’s day-to-day operations. In his announcement tweets, he stated that he will still be the company’s “exec chair & CTO, overseeing product, software & sysops.”
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.