Why are companies leaving X?

Since Elon Musk’s takeover of X – born Twitter – in October 2022, the platform has repeatedly found itself at the center of controversy. This has led to a mass X exodus as companies seek to distance themselves from Musk’s outspoken, right-leaning views on topics of international importance, from conspiracy theories to US leadership and UK civil unrest.

The latter is the latest X-related scandal, sparked when Musk posted “civil war is inevitable” in response to a video of UK riots shared on the platform on August 4.

The tech mogul has also faced accusations of inappropriate censorship of material on the platform, with some raising concerns that the mogul’s focus on free speech has allowed X-user streams to become echo chambers for hate speech.

It’s a point highlighted by Goran Calic, chair of entrepreneurial leadership at the DeGroote School of Business and visiting student at Harvard Business School. he says Verdict: “Musk has publicly announced that he bought X not for economic reasons, but to protect free speech on a platform he sees as the Internet’s marketplace.”

Calic points out that in many ways X is actually the city’s modern market. It’s the first place Biden has announced he will step down, and it remains a hotbed of rumor and outrage.

For X users, however, there is a risk that this place of public conversation will be little more than a game for someone with no financial interest. Some saw its inexplicably short logo change to the image of the Dogecoin cryptocurrency in April 2023 as evidence of this, a point underscored by Twitter’s insistence since then on responding to press requests with only a poop emoji.

Given Musk’s claim that the purchase of X was not financially motivated, Calic says, “There are also good reasons to take him at his word on this — Tesla, SpaceX, Neurolink’s strategies (sustainability, insuring humanity against existential risks, and increasing human brevity, respectively) are all consistent with this approach, which solves really big problems that don’t have traditional business markets/customers. (There wasn’t a business model for electric vehicles before Tesla, and there still isn’t a market for going to Mars).”

However, a platform that appears to be a billionaire’s toy can quickly lose its appeal to companies, and the potential of a digital “marketplace” was clearly not enough to convince a few major companies to stay on the platform.

Advertisers have turned away from Musk

IBM, Paramount and The Walt Disney Company are among the big names that stopped posting without words in November 2023 after Musk responded to an anti-Semitic conspiracy theory published on X by calling it “the real truth”.

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These companies were also among those boycotting advertising on X. Others include Apple, which was reportedly X’s biggest advertiser, Lionsgate, Comcast and Warner Bros.

The immediate loss of ad revenue in November 2023 angered Musk, who was quick to share his position on his own platform. Two weeks after his controversial comment, he told boycotting companies to “f*** themselves,” adding in a post that “No advertiser should decide what you’re allowed to say… I’m prepared to I’m going down with the ship. Long live freedom of expression.”

Musk wasn’t all bark and no bite on this issue, either. He launched a lawsuit in Texas against Unilever, Mars, Ørsted, CVS and the Global Alliance for Responsible Media (Garm). She claims the companies violated US antitrust law and withheld “billions of dollars in advertising revenue” from X.

The lawsuit is unlikely to succeed, and Musk has reason to be concerned about the loss of revenue. says Calic Verdict: “The challenge that X faces is that 80% of its business has come from advertising, so this is a really big change in the way it does business… the businesses that are going away are the ones that are the most visible – literally ones that would put their name front and center on the platform.”

The association problem

However, companies haven’t just abandoned their advertising strategies on X. Increasingly, companies are announcing that they will no longer use X as a platform to communicate with customers.

Sam Budd, CEO and founder of Buddy Media says Verdict: “Since Musk took over, X has lost its appeal to many businesses. The platform is no longer seen as a safe space – posting there now poses a risk due to its association with Musk’s controversial political views, such as endorsing Trump and various conspiracy theories. For many brands, X is no longer a platform they want to be associated with.”

This already present problem was exacerbated earlier this month when misinformation spread on X (and other platforms) suggested that the killer of three children in Southport was a Muslim refugee who arrived on British shores in 2023 by boat.

Riots in Britain followed, and Musk was accused of fueling the fire, both by posting inflammatory comments and by allowing his platform’s general failure to censor violent and racist content.

Musk’s comment (and social media’s wider role in the unrest) has once again thrown the spotlight on the question of when free speech online crosses over into hate speech. It’s a question pondered by GlobalData analyst Laura Petrone, who notes the need for better clarity on this point: “There needs to be certainty and clarity about when free speech can be restricted by law, and the restriction needs to be clearly necessary for this purpose. . However, this is easier said than done and how regulators will apply the law, striking the right balance and ensuring freedom of expression, will become clearer in the coming years.”

For some companies, however, Musk’s involvement behind the keyboard in the civil unrest marked a turning point and prompted another wave of the X exodus.

One of the most recent exits was from Jisc, which said in a statement shared on X: “In light of recent events that are inconsistent with our values ​​as an organization and in consultation with our stakeholders, staff and communities, we have decided that as of Wednesday, August 21, 2024, we will no longer be active on X.”

The phrase “incompatible with our values” was echoed in X, including by non-profit organizations and apolitical health services.

Petrone believes Musk is responsible for X’s chaos, which has given so many businesses cold feet.

“As the owner of X, Musk has a lot of responsibility for what happens on the platform,” she says. “Musk’s behavior on X was extremely irresponsible. Not only did he reduce moderation, but he also reinstated banned accounts that spread harmful content, and he himself became more outspoken in publishing controversial claims without facts.

“His uncooperative attitude towards the European Commission could risk harsh sanctions, which could go as far as removing access to the EU.”

“The Musk Problem: Why Are Companies Leaving X?” was originally created and published by Verdict, a brand owned by GlobalData.

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