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Elon Musk’s Transformative Year at X (Formerly Twitter): Successes and Struggles

Elon Musk’s acquisition of Twitter, now rebranded as X, has been marked by significant changes and challenges over the past year. Musk, initially a fervent Twitter user, made headlines with a $44 billion bid for the platform, facing legal battles when attempting to backpedal on the deal due to fluctuations in tech stocks.

Since closing the debt-heavy deal on October 27, 2022, Musk wasted no time implementing substantial alterations. This includes an 80% reduction in staff, a renaming of the company to “X,” and modifications to the blue check-mark system, now reserving “verified” status for $8-per-month X Premium subscribers. Additionally, Musk initiated a test to charge users $1 per year for posting, citing the need to combat bots.

However, the aftermath of Musk’s takeover has been marked by a decline in user engagement. Numerous users, including celebrities, have reportedly left X/Twitter in response to the dramatic changes. Monthly active users for X/Twitter saw a 15% drop worldwide (18% in the U.S.) year-over-year in September 2023, according to SimilarWeb. Sensor Tower reported a 16% decrease in mobile daily active users to 183 million in the same month.

Advertising on X/Twitter has also experienced a significant downturn, with U.S. ad spending dropping by 54% from September 2022 to August 2023, according to Guideline. Musk’s decisions, such as reinstating banned accounts and his own unconventional posts, have left advertisers cautious.

Musk attributes the decline in ad sales to activist groups, including the Anti-Defamation League (ADL), accusing them of harming X’s advertising business. Despite a threat to sue the ADL for defamation, tensions seem to have eased, with the group acknowledging X’s intent to address hate speech.

In March, Musk stated that Twitter’s value had decreased by more than half, reaching $20 billion. Admitting to a cash-flow negative status in July, Musk, with an estimated net worth of $220.8 billion, expressed his commitment to transforming X into an all-encompassing platform, handling users’ entire financial lives.

Facing criticism and controversies, Musk hired Linda Yaccarino as X’s CEO in the summer, overseeing ad sales and business operations while Musk retains control over technology and product decisions. Yaccarino, however, faced challenges in staying aligned with Musk’s plans, as evidenced in her apparent lack of awareness regarding Musk’s announcement of a fee for all users.

Despite the challenges, Yaccarino remains optimistic, highlighting achievements in a blog post and claiming that X is regaining “advertiser momentum.” The company aims to launch a global payment system, with licenses secured in several states.

As X celebrates its one-year anniversary, Musk’s ambitious vision for the platform’s future and its financial outlook remain uncertain.