A Year into Elon Musk’s Ownership of Twitter, Indicators Show Challenges and Controversies
Elon Musk’s acquisition of Twitter marked a significant shift in the social media landscape, characterized by bold changes, controversies, and a clear vision for the platform’s future. A year has passed since Musk assumed control, and several key indicators suggest both challenges and opportunities.
User Exodus: A noticeable exodus of millions of users, including celebrities, has occurred in the wake of Musk’s takeover and the substantial restructuring of Twitter. In September 2023, monthly active users for X (formerly Twitter) dropped by 15% worldwide and 18% in the U.S. year-over-year. Other third-party metrics corroborate a similar decline, with mobile daily active users declining by 16% year-on-year in September 2023, reaching 183 million.
Ad Revenue Decline: Advertisers have grown wary of Musk’s mercurial decision-making, leading to a 54% drop in U.S. ad spending on X/Twitter by major ad agencies from September 2022 to August 2023. Musk’s reinstatement of thousands of previously banned accounts, including former President Donald Trump’s, coupled with his occasionally controversial posts, has impacted advertiser confidence.
Financial Challenges: Musk has openly admitted that Twitter’s value plummeted, claiming it was worth just $20 billion in March. The decline in ad revenue and a heavy debt load contributed to the company’s financial difficulties, with Musk highlighting that it remained cash-flow negative as of July.
Vision for the Future: Despite the challenges, Musk remains steadfast in his vision for Twitter (X). He aims to transform it into a comprehensive application that encompasses financial transactions, envisioning a future where users won’t require traditional bank accounts. Musk emphasized his commitment to offering a wide range of services within X, emphasizing the integration of financial services.
Leadership Changes: This summer, Musk appointed Linda Yaccarino as X’s CEO, responsible for ad sales and business operations, while he retained authority over technology and product decisions. Yaccarino has consistently supported Musk’s initiatives, although she has at times appeared out of the loop regarding his decisions.
Global Payment System: Musk has announced the development of a global payment system, aiming to allow money on X to flow as freely as information and conversation. X has reportedly secured initial money transmitter licenses in several states.
Advertiser Momentum: Yaccarino, in a recent blog post, noted that X is regaining “advertiser momentum.” Major agencies have reversed their advertising “pause guidance” since mid-May, and over 1,700 advertisers have returned to X, including prominent brands.
While Musk’s vision is bold, the financial sustainability of Twitter/X in light of these changes remains uncertain. Musk’s impact on the platform’s future, including his vision for a comprehensive financial ecosystem, will continue to be closely watched as X navigates challenges and controversies.
