X/Twitter Faces Steep Decline in Ad Revenue After Musk Takeover, Documents Show

Since being acquired by Elon Musk, the social networking platform X/Twitter, which primarily relies on advertising for income, has witnessed a significant retreat of advertisers from the platform due to Musk's controversial personal style. This shift has dramatically impacted the company's financial stability, as advertising has always been a pillar of revenue for social media.

Despite introducing a subscription service to attract paid users, this revenue stream remains a fraction of what advertisements brought in, insufficient to support X's daily operations.

An unpublished document, prepared for submission to U.S. regulators for a payment license application, reveals the company's dire financial straits since Musk's takeover in October 2022. The document, a business ledger of X, shows a nearly 40% revenue drop in the first six months of 2023 compared to the same period last year, with earnings dropping to 1.48 billion. Additionally, X recorded a loss 456 million in the first quarter of 2023 alone.

Previously, Twitter's ad revenue, before rebranding to X, accounted for 90% of the company's total income. The exodus of advertising clients naturally led to a sharp decline in revenue.

Musk's strategies to counter the loss of advertising clients include introducing a subscription model for direct user payments, offering ad revenue sharing to attract creators to the platform, and softening his stance towards advertising clients, moving away from his previously abrasive approach.

Musk's primary goal remains transforming X into a super app. The document in question pertains to applications for payment licenses in 11 U.S. states. If approved, X users will be able to transfer funds, purchase products or services, and even deposit money among other functionalities.

X aims to charge minimal or no fees for most services, adopting a strategy to attract more users to make payments through X. If the future sees a substantial number of users utilizing X for payments, the platform can still generate income through its payment services, despite the current downturn in advertising revenue.