‘Musk destroyed all that’: Twitter’s business is flailing after a year of Elon
Elon Musk wrote within hours of buying Twitter that he “didn’t do it because it would be easy”.
That statement has proven to be one of the few certainties about his ownership of the influential social media platform, which has tipped the business into a state of constant flux, with advertisers slashing spending, user numbers down, regulators circling and the staff at less than 50% of what it used to be.
From dumping a world-renowned brand to attempting to overhaul the company’s business model, Musk has changed Twitter more in the past year than any other executive in the 16 years prior.
Rebranding Twitter
Musk acquired Twitter on 27 October 2022. The biggest single change in a tumultuous 12 months was rebranding Twitter as X, a long-mooted move for an entrepreneur who has harboured ambitions to create an “everything app” that handles messaging, social networking, audio, video, payments and online shopping.
Shortly before he completed the $44bn (£36bn) takeover, Musk signalled what was coming when he described the deal as an “accelerant to creating X, the everything app”.
Nonetheless, the sudden dumping of the Twitter brand in July this year took the tech world by surprise. Compared with Facebook and Instagram’s multibillion-person combined user base, Twitter was a modest platform with 238 million daily users – but it was influential and well-known.
According to X’s new chief executive, Linda Yaccarino, speaking at a conference last month, the social network now has between 200 million and 250 million users, although she indicated later during her appearance that the number is 225 million – which would indicate a decline. Visits to X dropped 10% on the prior month to 5.8bn in September, according to data firm Similarweb.
Bruce Daisley, the former head of Twitter’s European operations, said the rebranding move had damaged a business that was in “brand heaven”.
“There was plenty wrong with the product, but the brand was in the top tier of companies in the world,” he said. “Names as diverse as Barack Obama, Kim Kardashian, The Rock and Greta Thunberg would all use the name and help promote the platform. Musk destroyed all of that.”
Changing the social media business model
If the rebranding of Twitter signalled a shift in the company’s business model, there was a need for change anyway due to the pressure on its main revenue stream.
Advertising accounted for nearly 90% of Twitter’s $5.1bn in annual revenue in 2021. That total has slumped due to an advertiser exodus triggered by fears over moderation standards on the platform and general concerns about Musk’s leadership. In a post last month, Musk said US advertising revenue had fallen 60%, a situation which he blamed on pressure from the AntiDefamation League, which campaigns against antisemitism and bigotry. With quarterly debt payments of $300m and a fall in the main source of cash to pay it, the company needs to find money elsewhere – if it can.
It is against this backdrop that Musk has sought to overhaul the platform’s subscription product, formerly known as Twitter Blue but now branded as X premium. The X rebrand has carried promises of turning the business into an “everything app” modelled on Tencent’s WeChat, dominant in China, that carries out a multitude of tasks from messaging to payments and food deliveries.
But even before completing the takeover – a tortuous process in itself – Musk had signalled that he aimed to reduce the platform’s reliance on advertising via a subscription drive, which he also hoped would reduce the number of automated accounts vexing the social network.
To this end, he oversaw a botched relaunch of the Blue product in Novem