The rebranded platform of Elon Musk, X (formerly Twitter), is facing the biggest crisis in its history. Last year, chumbox ads plagued the microblogging app, but now, the worst has come—a declining user base.
Election season normally boosts traffic on social media, but this year's U.S. Presidential election exposed some critical issues for X. The platform was marketed as an "everything app" and has experienced a mass exodus of users, fueled by a surge in misinformation, toxic discourse, and Musk's open support of Donald Trump.
Election Day Traffic: A Transitory High for X
One major beneficiary of X's fall is Bluesky, a new alternative platform that has seen a large increase in new users and daily engagement. According to Mashable, the post-election environment does explain some of this migration, but X's user retention issues began before the elections, which signals more long-term problems.
Historically, major events like elections have driven large traffic spikes for platforms like X. True to form, the 2024 U.S. Presidential election generated a short-lived increase in X's daily active users. Data from SimilarWeb indicates X enjoyed a brief uptick in activity on election day and the days following.
Last month, some users fled Musk's platform due to the new rule targeting free speech and privacy. Well, things became even more unbearable when Trump won the US presidency.
However, the bigger picture says otherwise. In the weeks leading up to the elections, X had been steadily losing its daily active users. In October alone, X reportedly lost between 300,000 and 2.6 million daily users in the U.S. each day.
By the end of the month, its daily U.S. user base had dropped from 32.3 million to 29.6 million, indicating an 8.4% decline.
Read More: Bluesky Hits 20 Million Users After X Subscribers' Migration: Will It Surpass Instagram Threads?
X's Steady Decline: A Pre-Election Trend
X's problems go well beyond the election cycle. Back in September, Mashable reported that X had already lost nearly 20% of its daily active users. The issues for the platform do not begin and end at the US market, with similar trends also observed within the UK and EU markets.
The future doesn't look good either. Analysts at Emarketer forecast that X will lose 7 million monthly active US users between Musk's acquisition in 2022 and the end of 2025. This trend shows an ongoing dissatisfaction of the users and increased competition with alternative platforms like Bluesky.
The Decline of X's Brand and Value
The user exodus isn't the only problem X is facing. Its brand and financial valuation also have taken a huge hit after Elon Musk's acquisition. As indicated by Brand Finance, X's brand valuation now stands at $673 million, a staggering drop from what it was in 2022 at $5.7 billion.
The financial fallout is equally alarming. Internal company data found that X's revenue had sunk by 40% by mid-year 2024 compared to the preceding year. Advertisers have continued to pull back amid controversies involving Musk's management style as well as the toxic nature of the platform.
What Will X Do Now?
While X is trying to establish itself as a leader in the social media space, the exodus and declining brand value are not exactly the most encouraging signs.
The increasing popularity of Bluesky, rallied by 700,000 users who are just seeking real human connection is just a part of the big refuge.
Well, if this is not yet alarming for Musk, then we really do not know how X will fare, considering that some users are also flying to Meta's Threads since it has no ads—and they are talking to "real" people.
