X, formerly Twitter, plans to establish an app development team in Japan and start hiring engineers in 2024, CEO Linda Yaccarino told Nikkei during an interview in Tokyo on Wednesday.
The first team of its kind outside the US will develop new app functions and advertising products to match the Japanese market. X hopes to arouse demand for ads from small and midsize companies in Japan in a bid to turn its business around, Yaccarino said.
Yaccarino assumed her post in June as the successor to Elon Musk, who took over Twitter in 2022. Nikkei is the first news organization to interview her outside the US.
Noting that Japan is the second-biggest market for X, after the US, Yaccarino said the new team will “develop products and have direct communication with our advertisers here.”
X has 550 million users around the world, and 10% of them are in Japan. In the number of texts posted and level of user engagement, Japan leads other countries.
X is promoting an “everything app” that offers a wide variety of services via smartphone, including not only the posting of short texts but also artificial intelligence-based searching, video calls, video uploading and payments. While the company has so far engaged in development work for the program in the US, it will hire engineers in Japan to become more responsive to the needs of Japanese in its new services.
The Walt Disney Co, IBM, Apple and other big American companies have pulled ads from X because of a tweet by Musk that can be taken as antisemitic. As a result, ad revenue, which accounted for 90% of Twitter’s total revenue before Musk’s acquisition, has fallen sharply.
“Elon offered a full apology on the issue and full explanation,” Yaccarino said, adding that there is “no place for antisemitism or hate anywhere on the platform.” She said X will also reinforce its team in Japan to deal with inappropriate content.
“Some of the advertisers who left the platform … are fully invited to come back,” she said.
While X has not fully attracted ads from small and midsize businesses, she thinks they are a key segment for diversifying its revenue streams, and said such ads are “booming on the platform.”
The new development team in Japan will devise a mechanism for low-cost ads in order to explore demand from small and midsize companies. The team will also work to better serve their existing audience and customers.
As for her relationship with the owner, Yaccarino said, “Elon and I have a strong partnership, and he’s been very supportive since I joined X. I run the company and Elon runs the product innovation. We teach one another about our expertise.”
This article first appeared on Nikkei Asia. It has been republished here as part of 36Kr’s ongoing partnership with Nikkei.