1 week Ago By Paul Kunert
In the months following Tesla CEO and Elon Musk's takeover of Twitter, now rebranded to X, business collapsed in the UK, according to recently filed profit and loss accounts for the year ended December 31 2023. The document lodged with Companies House, the repository where commercial entities in the country are required to report local finances, shows revenues plunged year-on-year by two-thirds to £69.1 million ($92 million).
Due to this relative crash in sales, net profit sunk to £1.2 million ($1.6 million) from £5.
6 million ($7.5 million) in the prior 12 months. Musk bought the "global platform for public conversation" in October 2022 for $44 billion .
He caused near instantaneous controversy by reinstating figures that were previously banned including former Trump advisor Steve Bannon and Dave Duke, the one-time Ku Klux Klan grand wizard. Advertisers began to pause spending , as the company accounts confirm, at least for the UK arm of Xitter. "Significant decrease in the performance of the company mainly pertains to the decline of advertising revenue primarily driven by a reduction in spend from large brand advertisers due to concerns about brand safety and/or content moderation.
"The business continues to take corrective measures to build brand safety tools , invest in platform safety and content moderation and then educate advertisers about these initiatives," the account add. X also says it was "diversifying advertising revenue" by creating SMB and performance advertising sales "streams" via "new advertising solutions and a refreshed sales go-to-market strategy." Lest we forget, Musk initiated a subscription fee, too, that gives payers features such as fewer ads, higher prioritization of replies and, of course, the blue verification checkmark.
The billionaire began a hardcore costcutting strategy soon after buying Twitter, firing senior execs and erasing or losing three-quarters of the workforce to leave just 1,500 remaining versus the 8,000 on the payroll when he joined. Some staff sued over the short notice period. He then asked some to come back before issuing an ultimatum to get hardcore or go home .
Some chose home. He ran a finger over the expenses spreadsheet and kept cutting, even trying to raise capital via an auction of Twitter furniture and pizza ovens. The hardline approach was also used against advertisers , which, as X says above, froze spending due to concerns about Musk's insistence that the platform is a town hall and freedom of speech is assured.
He asked Apple, for example, if it hates free speech . Musk doesn't seem to be too concerned about this when it comes to dealing with China and doesn't take to kindly to those that mock him or criticize his commercial enterprises . The 2024 company accounts for X won't be filed until April next year, so there is no way of verifying if the 2023 performance vastly improved.
Despite a very public spat between Musk and some advertisers, big name brands have resumed or are upping their ad spend with the platform including Apple, Disney and Comcast, especially since the last US election. So while Musk's Tesla brand and sales have, arguably, suffered from links to the orange dude in the Oval Office and from Musk himself being the unofficial head of the Department of Government Efficiency - which he's cutting down on - it seems Xitter is doing comparatively better than it was. Thank goodness for free speech.
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