The social media giant X, formerly known as Twitter and now under the ownership of Elon Musk, is grappling with a potential loss of up to $75 million in advertising revenue by year’s end. This forecasted downturn is rooted in the company’s recent turmoil, ignited by Musk’s endorsement of an antisemitic conspiracy theory.
Internal documents viewed by The New York Times reveal a precarious situation for X, with over 200 ad units from companies like Airbnb, Amazon, Coca-Cola, and Microsoft either halting or considering a pause in their advertising on the platform. This comes in the wake of significant backlash against Musk’s controversial statements and a noticeable increase in inflammatory content on the site.
The situation worsened when Musk claimed on X that a theory about Jewish people orchestrating immigration to replace white populations was “the actual truth.” This statement prompted swift action from numerous advertisers, with many major brands pausing their campaigns. Notable among these are Disney and Warner Bros. Discovery, alongside tech giants such as Airbnb and Amazon.
According to the documents, more than 100 brands have completely paused their advertising, with many others marked as “at risk.” The final three months of the year, typically the strongest quarter for the company due to holiday promotions, now see a significant threat to their revenue stream. X’s estimated loss hovers around $11 million, with fluctuations depending on advertisers’ decisions to return or increase spending.
In response to this mounting crisis, X has sued the media watchdog group Media Matters. The lawsuit alleges defamation, claiming that the organization’s report falsely associated major brand advertisements with content promoting hate speech. Despite this, U.S. ad revenue on X has seen a stark decline, dropping at least 55 per cent year-over-year each month since Musk’s takeover in October 2022.
X’s CEO, Linda Yaccarino, has taken a firm stance, declaring that the company will not yield to external criticism or pressures. In an internal email, she emphasized X’s commitment to free speech and democracy, brushing aside concerns about the endorsement of incendiary posts by Musk.
This development poses a significant challenge for X, especially during a time when social media platforms are under intense scrutiny for their content moderation policies and the influence of their owners’ personal beliefs on their operations. As the situation unfolds, the impact on X’s financial health and its standing in the social media landscape remains to be seen.
