A year ago, billionaire Elon Musk entered Twitter’s San Francisco headquarters with a white bathroom sink and a smile and dismissed its CEO and several top executives to change the social media network forever.
Elon Musk rebranded Twitter as ‘X’ and changed its strategy. X looks and feels like Twitter, but the more you use it, the more it’s an approximation.
He removed Twitter’s name, blue bird logo, verification system, and Trust and Safety Advisory Committee. In addition to relaxing the portal’s content control and hate speech policing, he laid off or lost most of its employees, including engineers who ran the site, moderators who kept it from being flooded with hate, and executives who made and enforced policies.
X lost many sponsors and consumers, and blamed the absence of the factors called ‘stability’ and ‘consistency’ in the social media platform’s decision-making last year. The portal has seen some of its advertisement revenue profits going for a toss. Twitter activity has dropped 30%, according to the Washington Post. The site’s bad content has driven advertisers away, Bloomberg News reporter Aisha Counts told CBS News.
Current estimates place the company’s value at USD 19 billion, which roughly translates to USD 45 per share. Elon Musk’s procurement of X in 2022 (Twitter then) amounted to a substantial USD 44 billion.
Aisha stated, “Advertising was down 60% in September. By all accounts, revenue is down, advertising is down — it doesn’t seem like a smart financial play.”
Rebranding Nightmare
Longtime Twitter users think the platform’s role as an imperfect but valuable place to learn about the world has ended. What X will become and whether Elon Musk can make it an “everything app” everyone uses is still uncertain a year later.
“Elon Musk hasn’t made a single meaningful platform improvement and is no closer to his ‘everything app,’ than he was a year ago,” said Insider Intelligence analyst Jasmine Enberg, as she added, “Instead, X has driven away users, advertisers, and now it has lost its primary value proposition in the social media world: Being a central hub for news.”
Elon Musk was one of Twitter’s most active users before he bought the firm, thus his experience was different from regular users. However, he’s made many changes to X based on his own opinions of the site, even polling his millions of followers for ideas on how to run it.
Counts remarked, “I think he was tweeting at 1 a.m. this morning because he likes Twitter. The long-term vision is to turn it into an everything app or super app, which is adding payments, like shopping … but there’s a long road to get there.”
Turning the service into a tech corporation instead of a social network “has been the single largest cause of the demise of Twitter,” Enberg commented.
Misinformation & Blue Checkmarks
Blue checkmarks that once indicated that an account’s owner was a celebrity, athlete, journalist from a global or local publication, or nonprofit agency now indicate that someone pays USD 8 a month for a subscription service that boosts their posts above unchecked users. These paying accounts disseminate falsehoods on the platform, which its algorithms amplify.
According to a Thursday analysis from the NGO Media Matters, many blue-checked X accounts with tens of thousands of followers called the October 2023 Maine mass shooting a “false flag,” orchestrated by the United States government.
Such accounts spread misinformation and propaganda about the ongoing Israel-Hamas war, so the European Commission made a formal, legally binding request for information from X over its handling of hate speech, misinformation, and violent terrorist content.
Famous foreign policy analyst Ian Bremmer wrote on X that the level of Israel-Hamas conflict disinformation “being algorithmically promoted” on the platform “is unlike anything I’ve ever been exposed to in my career as a political scientist.”
Financial Woes
It’s not just the platform’s identity at risk. Twitter was already struggling financially when Elon Musk bought it for USD 44 billion in October, 2022, and its plight is worse now. Tesla’s records are secret, but Elon Musk revealed in July 2023 that the business had lost half its advertising revenue and was in debt.
On July 14, he said, “We’re still negative cash flow,” citing a “50% drop in advertising revenue plus heavy debt load.”
“Need to reach positive cash flow before we have the luxury of anything else,” he stated.
Elon Musk hired Linda Yaccarino, a veteran NBC executive with significant advertising industry links, in May to bring back big sponsors, but the campaign has not achieved the desired results yet.
Despite a comeback in the internet advertising market that lifted Facebook parent firm Meta and Google parent company Alphabet’s quarterly profits, some marketers are spending less on X.
Insider Intelligence predicts USD 1.89 billion in advertising income for X, down 54% from 2022. This level of ad revenue was last reached in 2015 at USD 1.99 billion. It was USD 4.12 billion in 2022.
Studies also reveal X use is decreasing. Similarweb reported a 14% drop in worldwide web traffic to Twitter.com and a 16.5% drop in advertiser traffic. Mobile performance was 17.8% lower year-over-year based on iOS and Android monthly active users.
The immediately recognisable bluebird has been reduced to a mere X. Despite aggressive rebranding efforts, no one calls the app X. It is still referred to as Twitter by individuals or as ‘X (formerly known as Twitter)’ by all major media houses.
Twitter had myriad imperfections, but the app was the space that netizens headed to when they wanted verified news from authentic sources. The USD 8 subscription has made it possible for trolls, bots, and other fraudulent actors to spread misinformation at an alarming rate. To turn the site into a free-speech paradise, Elon Musk has opened Pandora’s box of hate and misinformation.
Even on the financial side, Twitter has a fraction of the revenue it once pulled. Its valuations have hit rock bottom and at least 30% of the users have already steered clear of the app.
Twitter’s slow demise is attracting competition. Though Meta’s threads were unsuccessful in claiming X’s market it is a sure sign that others see weakness and want to capitalise on the situation. For now, Elon Musk better be careful that the failures of X don’t spill over to his other ventures!