A year ago, having just bought Twitter, Elon Musk walked into its HQ carrying a sink. “Let that sink in” he quipped – then fired a large swathe of staff.
The past year has been full of unpredictable changes for the company, especially with it being renamed to X. X has managed to stay strong, even with competition from other companies. But, because advertisers are cautious and how many people are using it is uncertain, what’s going to happen to X next?
The challenge
Many people aren’t using X as much as before, but we don’t have exact numbers because the company doesn’t share them. According to some companies that track these things, X’s usage has gone down compared to last year.
David Carr from SimilarWeb, a company that looks at web data, said, “Basically, everything is lower when we compare it to the same time last year.”
Ross Gerber, who invests in Twitter and has strong opinions about how Mr. Musk is leading things, thinks the platform is in trouble. He said, “Twitter is slowly losing its popularity and needs help.”
We do know that some famous people like Elton John and Gigi Hadid have left X in the past year.
A lady named Madeleine Dunne, who used to be a journalist and now works in a company that does online marketing, mentioned that she hardly uses X anymore. This is because Mr. Musk started charging for a blue checkmark (a verification symbol), which made it hard for her to trust who is who.
She added, “Opening X feels like getting on a sinking boat. The main page, which is called ‘For You,’ is a mess. The special verified users on X Premium get so much attention that it’s hard to find content I’m actually interested
Subscriptions vs advertising
The big challenge for X, and Twitter before it, is how to make money. In pursuit of that goal, Mr Musk has radically cut costs through lay-offs, a process which has been bruising for staff.
Melissa Ingle, a former moderator, felt really upset when her company logins suddenly stopped working.
Twitter used to make money mainly from ads. But Mr. Musk tried to add another way of making money, where users pay for special features like a blue checkmark. He even announced there would be two new levels of these special subscriptions.
However, these changes haven’t made a big difference. X still depends a lot on ad money, and that’s a problem for Mr. Musk because it’s going down.
Data from other companies show that every month, the money X gets from ads in the US has gone down by at least 55% compared to the same month the year before since Mr. Musk took over. X has always had trouble making enough money – even before Mr. Musk got involved – and it only made a profit twice since it started in 2006.
Mr. Musk has said this is a really important problem.
He mentioned, “We have to make more money than we spend before we can think about anything else,” in a talk earlier this year.
Hopes for rebound as ‘everything app’
The appointment of ‘superwoman’ Linda Yaccarino, previously head of advertising at NBCUniversal, as the X CEO – was seen as a positive milestone for the firm, creating distance between Mr Musk and the platform.
Dr. Ben Marder, a marketing expert from the University of Edinburgh, thinks that Ms. Yaccarino didn’t have enough freedom to come up with new ideas. He believes Elon Musk pressured her to focus on quick money-making solutions, like the subscription model, which might not work out well.
Elon Musk has big plans for X. He doesn’t just see it as a social media company. He envisions X becoming an “everything app.” When the BBC asked him about this earlier in the year, he hinted that we’ll have to wait and see to find out more.
Ms. Yaccarino, in July, gave a detailed description of how X might grow. She said X will be about limitless interaction in audio, video, messaging, and banking, forming a worldwide marketplace for ideas, goods, services, and opportunities. AI will be a big part, connecting us in ways we’re just starting to imagine.
Elon Musk is expanding what Twitter can do. Recently, he streamed himself playing video games. He hopes X can compete with apps like Twitch. Just last Thursday, he introduced a new service for calls in audio and video that doesn’t need a phone number.
Elon Musk also has plans for banking with X. According to the New York Times, they wanted to make $15 million from a payments business in 2023, which could grow to about $1.3 billion by 2028.
Mr. Gerber initially invested because of Elon Musk’s reputation. He said their pitch was a bit uncertain, but they asked for trust because of Elon’s ability to create amazing things. However, a year later, he’s confused about Musk’s plans for the company. He wonders if Musk will be willing to compromise on strict speech rules to bring back advertisers, because that’s what really matters.
Moderation headache
Stopping extreme content remains a big problem for X.
Research from the Centre for Countering Digital Hate found that even after a week of being reported, X still had about 86% of really hateful posts up. This group is in a legal fight with X over this issue.
These posts included things that support antisemitism, racism, and white supremacy.
The founder of the group, Imran Ahmed, said, “Elon Musk’s first year running X shows us that it’s not realistic to expect digital platforms to control themselves.”
So, X has a lot of tough challenges. But it doesn’t seem to have discouraged Mr. Musk much. His main post on the platform he invested so much in says, “X is like humanity’s shared thoughts.”
Take a moment to think about that.