The Meta boss has been busy taking selfies with llamas, wakeboarding — and watching his net worth climb almost $53 billion this year to $181 billion. Musk is still the world’s richest person by some measure and worth $228 billion due to his stakes in Tesla and SpaceX, but has led X into several controversies in recent weeks that risk putting it further behind Zuck’s social media empire.
Musk, who has spent almost two years running X out of San Francisco, has brutally cornered the advertisers he needs for long-term success with a lawsuit, while helping disseminate misinformation over tense political and domestic events overseas.
It has raised the stakes financially and reputationally for himself and his company as they seek to outdo Zuckerberg, who triggered Musk so much with the launch of X rival Threads last year that a cage fight almost ensued.
If current circumstances last, Musk can forget any hope of X getting anywhere near Meta’s $1.3 trillion valuation given the platform is now worth far less than even the $44 billion he paid for Twitter in 2022.
A lost battle
Beata Zawrzel/Getty Images
One of Musk’s biggest challenges in turning X into a legitimate rival to Zuckerberg’s social media platforms is generating revenue.
Since taking control of the platform, Musk’s been in a constant battle with advertisers that have left or threatened to leave over concerns that misinformation will thrive under his watch.
That has been a big problem for X, with Musk venting his frustrations about it all last year after telling advertisers to go “fuck yourself” and trying to get users to buy ad-free subscriptions.
Revenue sinks
None of this seems to have gotten him anywhere.
According to a report from The New York Times this week that cited internal documents, X revenue dropped 25% from the first quarter of the year to $114 million, and was 53% lower the same period last year.
Meta, meanwhile, has seen a huge surge in advertising revenue since then, allowing it to keep investing in hot new areas like artificial intelligence. In its second quarter this year, revenue (largely driven by ads) jumped 22% year-on-year to $39 billion.
If Musk had any hopes of getting back on amiable terms with advertisers to help close the gap on Meta, he could probably wave goodbye to them now.
On Tuesday, Musk and CEO Linda Yaccarino announced that X had filed a lawsuit in a federal court in Texas against the Global Alliance for Responsible Media (GARM), a trade group, over a boycott that has cost X billions of dollars.
In Musk’s own words, it’s a declaration of “war” with the very people he needs to boost falling revenue at X.
The lawsuit appeared to intimidate the trade group. My colleague Lara O’Reilly reported on Thursday that GARM told members it was “discontinuing” activities following Musk’s legal threat.
Though the X owner will no doubt see this as a victory, it threatens to further undermine relations with advertisers.
False information
Other recent developments are unlikely to bring advertisers and revenue back to X in a hurry, either.
Since riots erupted in the UK toward the end of July after three children were killed in Southport, near Liverpool, X has faced questions over its role in helping spread false information with the potential to incite further violence.
Research published this week by the Center for Countering Digital Hate found that X had helped generate 434 million views for the posts of far-right figure Tommy Robinson during the UK riots. Between July 29 and August 5, the posts have been averaging 54.3 million views per day on X — five times more daily views than he received before the riots.
According to the analysis, Robinson — real name Stephen Yaxley-Lennon — has been “instrumental in stoking hatred of Muslims since the Southport attack on 29 July,” with posts “that promote false claims or conspiracies.”
Critically Musk, who has about 193 million followers on X, has played a significant role in allowing misinformation to spread recklessly.
The X owner amplified a post made by the co-leader of the nationalist party Britain First that carried a fake headline from a British newspaper suggesting “emergency detainment camps” would be built on the Falkland Islands to imprison UK rioters. The post has since been deleted.
He has also posted to X that “civil war is inevitable” while accounts on his platform have risked instigating hatred by actively casting carefully-selected footage from old protests and riots as present day scenes from the streets of Britain.
Whether other dubious posts get taken down seems unlikely. According to The Financial Times, X has resisted requests from UK officials to take down controversial posts that it deems to be a “threat to national security.”
Prime Minister Kier Starmer said on Friday that UK online misinformation laws would be reviewed.
There are of course other platforms that have played a role in facilitating the spread of false information, such as messaging app Telegram.
But none of this helps Musk in its effort to outdo Zuckerberg at his own social media game and widen X’s appeal. Advertisers already repelled by a hands-off approach to fact-checking (X relies on “Community Notes” led by Musk fans for that task) can hardly be expected to return to the platform when its owner is responsible for promoting false information himself.
If Musk does eventually concede defeat to Zuckerberg, it’ll be difficult to point the finger of blame at others. That may not stop him doing so.