Advertisers continue to flee social media service X, known from 2006 to 2023 as Twitter.
In September, I had enough The World Bank.
X had placed that ad in the middle of a racist update that was posted to an account with 115,000 followers. The account shared neo-Nazi content and spread racial theories.
– This cannot be accepted in any way. We will immediately cut off all our advertising on the platform, a spokesperson for the World Bank told CBS news.
Elon Musk’s Slide – Value Crashed
The service’s market value has collapsed after the world’s richest man, known for Tesla electric cars and SpaceX space rockets Elon Musk bought it in October 2022.
This week is estimatedthat the value of X would only be about a fifth of the $44 billion price Musk bought the service for.
This is based on the depreciation of the ownership of one owner, the investment company Fidelity.
Fidelity’s ownership was worth 19.6 million dollars two years ago, but now it is worth only 4.2 million dollars – in euros, the drop would have been from about 18 million to less than 4 million.
Based on Fidelity’s calculation, X would only be worth $9.4 billion.
However, it is not so straightforward.
Musk bought X at an overpriced price. At the time of purchase, the real value of the service was already estimated to be less than half of the $44 billion Musk paid, and Musk first tried to cancel his offer.
Additionally, the value of X cannot be determined publicly because Musk pulled the company from the stock market. Metrics like Fidelity give some indication of true value.
From crisis to crisis
In Musk’s era, X seems to have progressed from one crisis to another.
The service suffers from numerous fake and troll accounts. They are Anonymous accounts that have not been set up for open discussion but only for political influence.
The Israeli company Cyabra, which analyzes social media, estimated in May that 15 percent Donald Trump the praising accounts were fake accounts. President Joe Biden Cyabra estimates that there were 7 percent of fake accounts praising.
In the summer, the US administration said he recognized In X, 968 Russian bot accounts, which licked the pro-Russia slider off the assembly line. In Finland, there was news about the creation of thousands of fake accounts at a rapid pace already in 2018.
X’s algorithm also makes emotive content visible, i.e. updates from accounts that the user has previously reacted to. X’s discussion culture has become more offensive than before, and the company has failed in eradicating hate speech.
Musk himself referred to the algorithm in his update a month ago.
This has led to everyday observations that many basic users have left X either completely or no longer use it actively.
Financial Times told a week agothat X would have lost a fifth of its daily users in the United States and up to a third in the UK in just over a year.
At the same time, many advertisers are tired of risking their reputation in a service that is even more unpredictable and full of contradictions. Among other things, Löyly has been beaten by Musk himself, who shares conspiracy theories.
Last November saw a mass exodus of advertisers when Musk was interpreted as having supported with its update of anti-Semitism and conspiracy theory, according to which the Jewish elite would strive for world domination.
Among others, Coca-Cola, Microsoft and Airbnb retired from service.
Advertising the following Mediaradar company by X’s advertising revenue in January–June of this year was only 744 million dollars, compared to 982 million dollars at the same time a year earlier.
Research company Kantarin statement according to one in four advertisers plans to reduce advertising in X next year.
“In any case, all development has been bad from the users’ point of view”
It’s a different matter whether the slide in user and financial numbers is meaningful to Musk. Publicly, he has reacted to the reduction with coolness.
The service is still a significant factor in social media. According to X it has about half a billion monthly users, and the number would be slightly increasing.
However, no one knows how many real people the number contains. In addition, estimates of the decline in the number of daily users suggest that interest in X is waning.
Musk’s property is about 260 billion dollars, or 240 billion euros.
Does advertising money or active users matter to Musk, or is it more important to keep the service the way he wants it?
Professor of Communication Pekka Isotalus The University of Tampere reminds us that Twitter was not a gold mine before, but most of the time produced a loss.
But Musk threatened to make the service profitable.
– I think this makes a dent in Musk’s reputation as a businessman. He has had a brand that he can make each thing succeed.
The service has gained a political stamp, Isotalus says, and it drives away users and advertisers.
– In any case, all developments in X have been bad from the users’ point of view. Without a doubt, it drives people away from there, says Isotalus.