Elon Musk’s Transformative Year: From Twitter to X Platform

It has been a full year since Elon Musk, the world’s wealthiest individual, successfully concluded the acquisition of Twitter, which has now been rebranded as X. Nevertheless, this deal was accompanied by a great deal of back-and-forth from Mr. Musk, causing numerous news outlets to label it “one of the most significant and tumultuous tech deals in history.” The billionaire initially announced his intention to purchase the platform in April 2022 at a price of $54.20 per share, an offer accepted by Twitter’s management at the time. By July, he sought to withdraw. After several twists and turns, he ultimately became the new proprietor of the microblogging platform on October 27, 2022.

Mr. Musk informed the world via tweets that he had acquired Twitter with the goal of establishing “a common digital town square where a wide array of beliefs can be discussed in a constructive manner.” In the past year, he has systematically transformed the platform.

Since October 2022, a number of prominent individuals have left the platform, accusing Mr. Musk of permitting “unwanted” voices on Twitter and raising questions about his management approach.

The Tesla CEO dismissed Twitter’s then-CEO, Parag Agrawal, and later appointed Linda Yaccarino. He also unveiled the introduction of a paid subscription called ‘Twitter Blue’ to acquire the coveted blue checkmark for one’s profile.

The platform’s algorithm was adjusted to ensure that Mr. Musk’s voice is the most prominent one on a daily basis (given his 161 million followers).

Mr. Musk’s primary strategy for Twitter was to shift away from advertising and toward paid subscriptions. According to an analysis by independent researcher Travis Brown, cited by Bloomberg, approximately 950,000 to 1.2 million individuals are now subscribing to X’s $8 monthly premium service. This implies that X has persuaded less than one percent of users to sign up, equating to an annual revenue of less than $120 million from the company’s subscription service, excluding app store fees from Apple Inc. and Google.

This is a significant departure from the ad revenue on which the platform relied prior to Mr. Musk’s takeover, amounting to approximately $4.5 billion.

Moreover, X’s top five advertisers are currently spending 67 percent less on ads than they did prior to the acquisition, as per data from market intelligence firm Sensor Tower.

The content moderation policies have also been relaxed, resulting in numerous misleading photos and images circulating on X. However, the platform has introduced a feature that enables users to add context to provide accurate information.

This transformation came about as Mr. Musk laid off roughly 80 percent of the company’s 7,500 employees, including the vast majority of those responsible for monitoring the site for hate speech and conspiracy theories.

Mr. Musk has also discussed the idea of turning the platform into an “everything app,” which prompted the rebranding of the company to X. Analysts are now eager to understand how this transformation will unfold to provide users with services worth paying for.