Under Musk, Twitter changed its name to X, cut 80% of its staff, lost more than 50% of its US advertising revenue, and its value was halved.
When he bought Twitter in October 2022, billionaire Elon Musk pledged to turn the social media platform into an "all-in-one app," helping Twitter escape its years of business struggles since its founding in 2006. However, a year has passed, and much of Musk's ambition has yet to be realized.
Twitter (now rebranded as X) has seen a slew of metrics, from users to ad revenue, decline, according to third parties. It is trying to rebuild its advertising business, which has seen revenue plummet since Musk took over. The platform is also facing challenges with content moderation as Musk loosens regulations.
Number of users decreased
In August, Musk wrote on his personal page that the platform had set a record for “user time spent online” for several months. As of September 2023, X reported 245 million daily active users, down from the 259.4 million Musk shared in November 2022.
However, this figure is higher than the 237.8 million that X announced in the second quarter of 2022 - the last time they announced a financial report before Musk bought and delisted it.
Monthly active user growth/decrease of platforms from October 2022 to September 2023. Chart: WSJ, Sensor Tower
Third-party data, however, is less encouraging. According to research firm Sensor Tower, daily active users on the X mobile app fell 16% in September compared to the same month last year.
Several social media platforms have launched competitors to X in recent years, but X remains a familiar sight to many. Meta Platforms’ Threads, for example, has attracted hundreds of millions of users in its first three months, but still has far fewer users than X, according to Sensor Tower.
The person who uses X the most is probably Elon Musk. Since acquiring the platform, Musk has been using it more diligently, even though he was already a regular user of X. Musk is now the person with the most followers on X. His posts also often cause controversy for users and advertisers.
Downsizing
Number of employees of X in the period 2014 - 2023. Chart: WSJ
After taking over X, Musk drastically cut staff to prevent the company from losing more money. According to financial reports, Twitter's headcount was nearly 8,000 at the beginning of 2022. But by December 2022, Musk said they were down to about 2,000, and by April 2023, it was 1,500.
Despite some dire predictions, X has survived. But the employees who remain are increasingly burdened with work. Many users have complained about a series of recent technical glitches. Others, however, have praised Musk’s leadership of the platform.
Loss of advertising customers
The X logo was projected onto Twitter's headquarters in July. Photo: Reuters
After Musk took over X, hundreds of major advertising clients stopped spending on the platform. They were reluctant to advertise because X changed so many rules under Musk.
Still, CEO Linda Yaccarino has been upbeat about the company’s performance. Last month, she said 90% of its top 100 advertisers had returned and that X could be profitable by early next year. Ads still account for the bulk of X’s revenue, though the company is looking to monetize other areas, such as user fees.
Recent figures show that X's advertising segment is still declining, especially in the US market. Statistics from marketing firm Guideline, based on data from major advertising agencies, show that in the period September 2022 - August 2023, advertising spending on X in the US decreased by 54%. Meanwhile, spending on TikTok increased by 72%, Reddit increased by 21%, Facebook & Instagram increased by 2%.
Several big ad agency executives say they have yet to see a return to X. Some brands are returning, but spending less. Last month, Musk admitted that X’s U.S. ad revenue had fallen 60% since he took over.
Decreased value
By Musk’s calculations, X’s value had fallen to about $20 billion in March, half the price he paid for it last year. But Musk remained optimistic. He told employees at the time that X “could be considered a startup” and that he saw the platform being worth more than $250 billion one day. Musk also floated ambitions for the platform to expand into digital banking, video, and more.
Still, many fund managers have significantly reduced the value of their Twitter investments compared to October 2022. Baron Capital is down 26%. ARK InvestmentManagement is down 44%. Fidelity Investments is down 61%.
The company's brand value is also expected to drop by billions of dollars because of its name change to X in July.
Ha Thu (according to WSJ)
Source link
Comment (0)