X Faces More Losses as Advertiser Boycott Grows

X faces mounting challenges as advertisers withdraw during the critical holiday season. Big brands, starting with IBM, paused X ads due to concerns about offensive content. Media Matters’ report linked IBM’s ads to material promoting “Adolf Hitler and the Nazi Party”. On the same day, X owner Elon Musk amplified an anti-Semitic theory, prompting more brands like Apple and Disney to halt campaigns.

Musk and his team are taking legal action against Media Matters, but NewsGuard’s report reinforced concerns, leading to more ad withdrawals. The expanding boycott is set to cost X around $75 million, impacting its optimistic return-to-profitability projection in early 2024.

Musk estimated a 50% drop in X’s ad revenue, potentially reducing 2023 revenue to $2 billion. However, this doesn’t include additional income, projecting X’s total intake at $2.6 billion, with ads contributing the most. X’s costs, after Musk’s cuts, range from $2 billion to $2.8 billion annually.

CEO Linda Yaccarino clarified that the profit estimation excludes massive debt from Elon’s takeover, with an additional $1.5 billion annual debt repayment. Despite the operational profit outlook, X was always destined for a billion-dollar loss.

Now, with a $75 million loss and Apple’s impact not factored into projections, X’s plans are derailed. The $200 million potential impact, depending on the boycott’s duration, won’t kill X, but pressure to cut costs or find new revenue streams intensifies, raising the risk of bankruptcy in the new year.

Elon Musk, with alternate funding options, may weather the storm. Yet, questions arise about supporting X, especially if Musk persists in amplifying controversial opinions under the banner of free speech. Musk’s view on sharing unproven information, despite potential harm, defines X’s approach.

The Musk era may mark the final act for X, once a culturally influential platform. Twitter, under Jack Dorsey, lacked profitability and direction. Many hoped Elon would steer it right, but his own posts have become obstacles, impacting X’s reputation and even casting a shadow on Tesla and SpaceX.

As Musk’s acquisition costs more than the $44 billion paid, the aftermath of X potentially going down in flames could linger on his personal brand. While Musk, being super rich, may move on, the grand everything app vision seems more like a distant dream amid the present challenges. Like a colony of humans on Mars, Musk’s vision faces uncertainties.