Elon Musk’s social media platform, X, is facing a potential significant financial setback as it could lose up to $75 million in advertising revenue by the end of the year.
This predicament stems from a series of actions triggered by major brands, including well-known entities like Walt Disney and Warner Bros Discovery, deciding to suspend their marketing campaigns on the platform. The catalyst for this decision was Elon Musk’s endorsement of a post containing anti-Semitic content.
In response to the fallout, X has taken legal action against the media watchdog group Media Matters. The company accuses them of defamation, particularly in relation to a report claiming that ads for major brands such as Apple and Oracle appeared alongside posts promoting Adolf Hitler and the Nazi party.
Internal documents shed light on the extensive impact, revealing that over 200 advertising units from prominent companies like Airbnb, Amazon, Coca-Cola, and Microsoft have either ceased their advertising on X or are considering doing so.
X has indicated that as of Friday, $11 million in revenue is at risk, and the final amount remains uncertain. Some advertisers may return to the platform, while others might increase their spending. The company did not immediately respond to a request for comment from Reuters.
The situation escalated after Elon Musk acquired X in October 2022 and implemented reduced content moderation. This shift has led to advertisers leaving the platform, contributing to a notable increase in hate speech, according to civil rights groups.
Reportedly, the ad revenue for X in the United States has experienced a decline of at least 55% month-over-month since Musk assumed control. This decline underscores the significant challenges the platform is currently facing in retaining advertisers and maintaining a positive public image.
