Business Essentials for Professionals


Elon Musk And X A Year Later: Issues That Need To Be Resolved

Elon Musk And X A Year Later: Issues That Need To Be Resolved
Elon Musk entered Twitter's headquarters a year ago after purchasing the company and was carrying a washbasin. "Let that sink in," he joked before dismissing a sizable portion of the crew.
It was the first taste of a frenetic twelve months of unpredictable upheaval, which included the company's rebranding to X.
X has shown remarkable resilience in certain aspects. It endures in spite of its circling rivals, both old and new.
But what's next for X, with marketers on the defensive and user stats questionable?
The Challenge
The number of users of X is impossible to estimate with precision because the corporation withholds those statistics. However, X is not utilised as often as it once was, according to a number of analytics companies.
"Basically everything is down on a year-over-year basis," said David Carr, from the web analytics firm SimilarWeb.
Twitter's investor and outspoken opponent of Musk's direction, Ross Gerber, claimed the service is "dying".
"There's reality and there's fantasy. And the reality is, Twitter is dying and it needs to be saved," he said.
One thing is for certain: over the past year, many well-known users have abandoned the network, including Gigi Hadid and Elton John.
After paying for blue tick verification, a move made by Musk, Madeleine Dunne, a former journalist now employed by digital marketing business Story Shop, said she has essentially stopped using the platform since it is now “hard to know who to trust.”
“Logging into X feels like stepping onto a sinking ship. The ‘For You’ page is a disaster – verified users on X Premium suffocate out everyone else, so very little of the content is actually stuff I’m interested in,” she said.
Advertising vs. subscriptions
The primary obstacle facing X, as well as Twitter prior to it, is generating revenue. Musk has drastically reduced expenses through layoffs in order to achieve that aim, a procedure that has been painful for employees.
Moderator Melissa Ingle claimed her "stomach dropped" when her workplace logins suddenly stopped functioning.
"It was a very, very bad time for me," she told the BBC.
Musk has attempted to support Twitter's reliance on advertising revenue by creating a different subscription-based business stream where users pay for additional services like a blue tick. He recently revealed that there will be two additional premium subscription tiers.
Though concerning for Musk, X is still mostly dependent on ad revenue, which hasn't improved much despite those advancements.
Third-party data indicates that since Musk acquired the business, the platform's monthly US ad income has decreased by at least 55% annually every month. Even before Musk became involved, the company had trouble breaking even and had only turned a profit twice since its founding in 2006.
He acknowledged that it's a serious problem.
“Need to reach positive cash flow before we have the luxury of anything else,” he said in a conversation earlier this year.
Hopes for rebound as ‘everything app’
The selection of "superwoman" Linda Yaccarino, who was NBCUniversal's president of advertising before becoming the CEO of X, was viewed as a significant step forward for the company and as a means of separating Musk from the platform.
Senior lecturer in marketing at the University of Edinburgh Business School, Dr. Ben Marder, expressed his opinion that Yaccarino had been "rather strong-armed by Elon to focus on quick revenue fixes, which leaves only weapons in the arsenal that are more than likely to backfire - like the subscription model" rather than "given the space needed to innovate."
Musk encourages his staff to have big ideas. He has much bigger plans for X than merely a social networking business in the long run. He envisions X as "an everything app."
"I guess you will have to stay tuned to find out" was his response when the BBC asked him what this meant earlier this year.
Yaccarino provided what was arguably the most detailed public explanation of X's potential growth in July.
"X is the future state of unlimited interactivity - centred in audio, video, messaging, payments/banking - creating a global marketplace for ideas, goods, services, and opportunities," she said.
"Powered by AI, X will connect us all in ways we're just beginning to imagine".
Musk has already begun to expand Twitter's offerings. He recorded a live webcast of himself playing video games earlier this month. He believes that X might rival Twitch and other apps.
He introduced a new audio and video calling service on Thursday that doesn't require a phone number. When opening the app, a number of users on the platform saw a notice saying, "Audio and video calls are here!"
Musk also has ambitions for X banking.
The New York Times, which obtained access to the pitch deck that Elon Musk presented to potential investors last year, claims that X was expected to generate $15 million in revenue from a payments business in 2023, rising to roughly $1.3 billion by 2028.
According to Gerber, the main reason he invested was because Elon Musk was involved.
"Really their pitch in a lot of ways was like, we're not sure what this will be. But trust us because it's Elon, and he's going to create something amazing," he said.
However, a year later, Musk's intentions for the business have him perplexed.
"Will he make concessions with his absolutism on speech to bring back advertisers? Because that's what it really comes down to," he said.


Christopher J. Mitchell

Markets | Companies | M&A | Innovation | People | Management | Lifestyle | World | Misc