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 situation arises from a sequence of events set in motion by prominent companies, such as Walt Disney and Warner Bros Discovery, opting to halt their promotional activities on the platform. The reason behind this choice was Elon Musk’s support of a post that included content promoting prejudice against Jewish people.
Following the repercussions, X has initiated legal proceedings against the media oversight organization Media Matters. The company alleges defamation, specifically in connection with a report asserting that advertisements for prominent brands like Apple and Oracle were displayed alongside content endorsing Adolf Hitler and the Nazi party.
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Internal papers provide insight, showing that more than 200 promotional slots from well-known brands such as Airbnb, Amazon, Coca-Cola, and Microsoft have either stopped advertising on X or are contemplating 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.
Supposedly, the advertising income for X in the United States has seen a drop of no less than 55% compared to the previous month since Musk took charge. This decrease highlights the considerable difficulties the platform is currently encountering in keeping advertisers and upholding a favorable public perception.
