Wednesday, June 19, 2024

Musk’s X sees ad share nosediving, to generate half a billion less this year

The X platform under Elon Musk has seen its ad share nosediving, and the company may generate $2.5 billion this year, missing the internal targets of $3 billion.

Bloomberg reports that ad sales on X are reportedly about a half billion lower than anticipated for 2023, as several top advertisers left the platform for his support for antisemitism.

X generated a little more than $600 million in advertising revenue in each of the first three quarters of the year, and is anticipating a similar performance in the current period, according to the report, citing sources.

The company earned more than $1 billion per quarter in 2022.

Joe Benarroch, X head of business operations, was quoted as saying that they are not “Twitter any longer and not measuring themselves by old Twitter metrics — both in revenue and user metrics.”

The loans Musk took out to buy Twitter (now called X) was about $13 billion and the social media company has to pay about $1.2 billion in interest payments every year.

As big advertisers quit the platform and X cannot pay the interest on its loans or pay employees, then it could actually go bankrupt, the BBC reported earlier this month.

“But that would be an extreme scenario that Musk would surely want to avoid,” the report mentioned.

However, for a company he bought for $44 billion, bankruptcy might sound unthinkable but “it is possible”.

Disney and Apple are no longer advertising on X and Musk told companies to “Go f*** yourself.”

Retail giant Walmart has confirmed that it is not advertising on X.

“We aren’t advertising on X as we’ve found other platforms to better reach our customers,” a Walmart spokesperson was quoted as saying in reports.

The departure of Walmart adds to the growing list of firms leaving X after Musk endorsed an antisemitic post last month (for which, he apologised).

Apple, Disney, IBM, Comcast and Warner Bros. Discovery are among the companies no longer buying ads on X.

Last year, around 90 per cent of X’s revenue came from advertising.

Musk has warned that the loss of big advertisers would spell the end of X.

“If the company fails, it will fail because of an advertiser boycott. And that will be what bankrupts the company.” he said.



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