Elon Musk's social media platform, X, is on the brink of losing advertisers following the billionaire's fiery outburst at a New York Times DealBook event.
The aftermath of the tech mogul's endorsement of an antisemitic post has led major players to suspend advertising, raising concerns about the platform's financial stability. Earlier this month, both Walt Disney and Warner Bros.
Discovery suspended advertising on X after Elon Musk endorsed an antisemitic post falsely claiming members of the Jewish community were inciting hatred against white people. The move triggered widespread criticism and a significant backlash from advertisers, as reported by Reuters.
NOVEMBER 29: C.E.O. of Tesla, Chief Engineer of SpaceX and C.T.O. of X Elon Musk holds up a pendant that says "Bring Them Home" as he speaks during the New York Times annual DealBook summit on November 29, 2023 in New York City. Andrew Ross Sorkin returns for the NYT summit for a day of interviews with Vice President Kamala Harris, President of Taiwan Tsai Ing-Wen, C.E.O. of Tesla, Chief Engineer of SpaceX and C.T.O. of X Elon Musk, former Speaker of the U.S. House of Representatives Rep. Kevin McCarthy (R-CA) and leaders in business, politics and culture.
Elon Musk Blasts Fleeing Advertisers
The controversy escalated as Musk directed explicit language toward advertisers during the DealBook summit. He defiantly declared, "If someone is going to blackmail me with advertising or blackmail me with money, go f- yourself." Musk specifically called out Walt Disney Co. CEO Bob Iger, one of the first to boycott X, signaling a clear message to those who withdrew their support, as per a report published by Yahoo! Finance.
Elon Musk acknowledged the potential financial repercussions, admitting that an extended boycott could lead to X's bankruptcy. However, he suggested that blame for such a collapse would fall on the brands rather than on him.
During Musk's controversial tirade, in the audience sat X CEO Linda Yaccarino, the company's resilient figurehead. Amid Musk's disruptive tactics that repel advertisers, Yaccarino, with two decades in advertising, particularly at NBCUniversal (an advertiser that also paused spending on X), is tasked with the challenging role of rekindling advertiser relationships, according to Fortune.
Read Also: New Google Maps Color Scheme Disappoints Many Users-Less Accurate and Less Human?
X's Revenue Suffering from Loose Content Moderation
X, formerly known as Twitter, has faced criticism for lax content moderation, particularly from advertisers concerned about their ads appearing alongside inappropriate content. Analysts, including D.A. Davidson & Co.'s Tom Forte, expressed concern that more companies might follow suit by suspending advertising on X, at least on a short-term basis. This raises the stakes for the platform's subscription efforts, potentially requiring more than half of its revenue to come from subscriptions.
The decline in monthly US ad revenue, which has decreased by at least 55% year over year each month since Musk bought the business in October 2022, has further highlighted X's financial difficulties, according to Reuters' report from last month.
The impact on X's revenue is substantial, with an estimated loss of $75 million this quarter due to the advertiser pullback. Elon Musk's confrontational stance, while showcasing his defiance, raises questions about the platform's ability to retain advertisers and its long-term financial viability.
In response to widespread criticism and advertiser withdrawal, Musk recently embarked on what some have dubbed an "apology tour" to Israel. He met with Prime Minister Benjamin Netanyahu and tentatively agreed to allow his Starlink satellites to be used in the Gaza Strip with Israeli government approval. Elon Musk insisted that his trip was not an apology tour and expressed a willingness to be disliked.
According to a previous TechTimes report, Elon Musk had discussions with Netanyahu and Herzog and was informed about the tragic events in Kfar Aza, where a Hamas strike resulted in numerous casualties. He also met with the families of the victims, further emphasizing his determination to counteract the spread of prejudice.
Related Article: Okta Data Breach Update: Hackers Accessed Info on All Customers, Not Just 1% as Initially Stated
