Elon Musk’s social media platform, X (formerly Twitter), reportedly faces a significant downfall in its advertising revenue for the year 2023. The network is projected to amass a total of $2.5 billion, indicating a substantial decline from the previous years.
What Happened: X’s ad revenue has barely crossed the $600 million mark per quarter this year, a dramatic decrease from the $1 billion per quarter reported in 2022, reported Bloomberg, citing people familiar with the matter. Ad sales comprise 70% to 75% of X’s total revenue.
This decline in revenue underlines advertisers’ unease with the platform’s content moderation under Musk’s administration, particularly his posts endorsing extremist views.
As per the report, X’s initial target for 2023 was set at $3 billion, which now seems an unrealistic goal.
Joe Benarroch, X’s head of business operations, defended the company by stating that the figures included in the article do not fully represent their business.
“This presents an incomplete view of our entire business, as the sources you’re relying on for information are not providing accurate and comprehensive details,” he said.
Controversial posts by Musk and his decision to reverse bans on users violating policies have discouraged many advertisers. Major corporations, including Apple Inc. AAPL and Walt Disney Co. DIS, have also halted their ad expenditure on the platform.
Previously, Musk has expressed interest in X’s subscription revenue, constituting half of the platform’s total business. However, this objective seems far-fetched, with just over one million paying subscribers at the moment, the report noted.
Why It Matters: Musk’s controversial leadership has been a significant factor in X’s declining valuation.
In October this year, it was reported that X’s value had fallen below 50% of Musk’s purchase price, largely due to his chaotic leadership and advertisers’ concerns about content-safety rules on the platform.
This downward trend in X’s value and ad revenue indicates growing challenges for the platform under Musk’s leadership.
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This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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