Two years ago, there was apprehension surrounding Twitter’s acquisition by Elon Musk from advertisers, anti-hate speech organizations, and employees.
These concerns have proven to be valid: advertisers have reduced spending on the platform, lawsuits have been filed by Mr. Musk against nonprofits due to an increase in controversial content, and a significant number of employees have been laid off, including myself.
The platform, now known as X, is deemed not worth the $44 billion Musk paid for it on Oct. 27, 2022. Musk later tweeted, “The bird is free,” in reference to the company’s logo. The sharp decline in value reflects the impact on its advertising-based business model.
Despite its diminishing financial value, its continued role as a news source and a platform for the expression of Musk’s right-wing views to over 200 million followers suggests that its benefits to the world’s wealthiest individuals are primarily measured through financial metrics.
“It still holds sway over the political discourse and has been somewhat successful in promoting his conservative ideologies,” noted Nick Newman, a senior fellow at the Reuters Institute for Journalism.
Data from Similar Web indicates that X’s global web traffic has slightly increased compared to the previous year, with 4.3 billion visits from desktop and mobile devices, a 3.8% rise year-over-year. However, this number was 5 billion before Tesla’s top executives assumed control.
The growth in the platform’s user base is also decelerating. The Financial Times reported 251 million daily users globally in the second quarter of this year, a 1.6% increase from the same period in 2023.
Under the ownership of self-proclaimed “free speech absolutists,” several controversial accounts like Tommy Robinson, Andrew Tate, and Alex Jones have been reinstated, causing many advertisers to avoid platforms that allow such content.
Investment firm Fidelity recently devalued its minority stake in X, with the current valuation at $9.4 billion, reflecting a downturn in advertising revenue, which accounted for nearly 90% of Twitter’s annual revenue in 2021.
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Musk’s recent reaction to the boycott is unlikely to lure back advertisers. In August, X sued a global advertising coalition and major companies like Unilever and Mars, accusing them of conspiring to boycott the platform and incur losses.
Yaccarino, the CEO of X and an industry veteran, previously mentioned the platform’s potential profitability in 2024 due to cost reductions and return of advertisers.
According to advertising experts, many major brands consider X to be too risky under Musk’s ownership and are hesitant to advertise on the platform.
While Musk’s wealth can sustain X financially, the implications of his ownership, political views, public persona, influence on Trump, and financial backing will be seen in the forthcoming US presidential election.
The worth of X at $44 billion remains debated and may hinge on Trump’s potential re-election, as highlighted by Newman.
X was reached out to for a response.
Source: www.theguardian.com
