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How much chaos can one company withstand before it becomes irreparably broken? It sometimes feels as though Elon Musk has been testing that question to the point of destruction since he paid $44bn for Twitter — since renamed X — a year ago this week.
The good news is that it seems a social media company with strong network effects can survive quite a bit. If new chief executive Linda Yaccarino is to be believed, X has at least clawed its way back to being close to break-even.
The not-so-good news, though, is that Musk’s shock treatment has left his trophy purchase seriously impaired. Many users say the level of polarisation has intensified and critics claim hate speech has flourished. Many advertisers have fled, leaving X a far smaller business than it was a year ago. And Musk has not solved the ingrained problems that had long made Twitter a by-word for unfulfilled potential, let alone provided a coherent explanation for what he wants X to become.
Musk thrives on chaos, but even by his standards, the upheaval in the first months after his acquisition was startling. As advertisers fled, the billionaire pushed through several rounds of savage job cuts and warned bankruptcy was a possibility. When large numbers of engineers were sacked or quit, many in the tech world predicted it was only a matter of time before the network collapsed. And as Musk cut back on content moderation, predictions of an audience exodus were rife.
A year on, the network has not crashed. Many of Musk’s critics — particularly among journalists — are still addicted to the service, even as they hold their noses and tweet their contempt.
Yet the damage inflicted on the business has been extreme. Nearly half of the top 100 advertisers from before the Musk takeover have since abandoned the platform altogether, according to Sensor Tower. The five biggest advertisers in the month before he acquired the company — which included Amazon, Mondelez and Unilever — have slashed their spending by two-thirds on average. The appointment of a CEO with deep ties in the media and advertising worlds has not had any noticeable effect yet in bringing advertisers back.
“It’s been a disaster and remains one,” said US advertising industry analyst Brian Wieser. It is not just that advertisers recoil at the fear that their brands will appear alongside hateful content: Musk himself has poisoned the well by publicly attacking advertisers who pulled back in the early days after his acquisition, says Wieser, making it unlikely that they will risk returning.
Slashing Twitter’s staff numbers at least enabled Musk to keep the company afloat. The headcount is reported to have fallen more than 80 per cent, to 1,500. While Musk has made a virtue of cutting back on functions such as content moderation to promote what he calls greater freedom of speech, the cuts have eaten deeply into all the platform’s operations. In Wieser’s words: “They’re not organised to be a large business anymore.”
At least Twitter’s audience has remained largely intact, even if it has shown signs of eroding. The number of people using the company’s app each day has fallen 13 per cent since before the Musk takeover, according to reported data from Apptopia.
X has withstood direct attack from rivals trying to take advantage of its disarray. Meta made a splash with Threads, an X clone tied to its Instagram app. But its daily audience is only about 7 per cent that of Twitter, according to GWS Magnify.
Bluesky, a social network championed by Twitter co-founder and former CEO Jack Dorsey, has doubled its audience in the last three months. With only an estimated 2 per cent of X’s audience, according to GWS, it is still tiny. But signs that journalists and other influencers have started to post more actively on Bluesky mean the threat could be greater than the current audience numbers suggest.
If Musk has managed to keep X afloat — just — his attempts to supplement the diminished advertising with new revenue streams appear to have yielded little.
At the same time, his promise to revitalise the company’s product development has not produced the sort of significant changes that might attract a much bigger audience or raise engagement levels meaningfully. Many complain that the flood of smaller adjustments have only served to damage the experience. If Musk has a vision for how to turn X into an “everything app” that can meet many more of its users’ digital needs, he has yet to reveal it.
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