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It's been almost two years since X/Twitter was taken over by Elon Musk at a value of $44 billion. Under new ownership, the social media platform's fortunes have worsened with advertising revenue plunging 40% in the first six months compared to the previous year. Elon Musk blames companies that refuse to advertise their services on X. This morning X CEO Linda Yaccarino announced that the company will sue the advertising body that allegedly boycotted X.
In a nearly two-minute video shared by Yaccarino this morning, he announced a lawsuit against the Global Alliance for Responsible Media (GARM), the World Federation of Advertisers (WFA), and GARM members CVS Health, Mars, Orsted and Unilever for boycotting advertising on X. The reason given is that the actions of all the parties above are illegal.
Yaccarino added, this boycott is aimed at "depriving X users, whether sports fans, players, journalists, activists, parents or political and corporate leaders, from the Global Town Square."
Previously, various leading global brands pulled ads from X because they were displayed under content labeled as racist, hateful and obscene. X said their advertising system has been updated to prevent this incident from happening again for security purposes.
However, advertising still hasn't recovered and X needs to generate revenue by selling X Premium subscriptions that offer identity verification and access to some exclusive X Pro features, tweaks and monetization.
In a tweet that was also sent by Elon Musk this morning, he said X has been trying to make peace for two years and now it's time to go to war. Last year Musk warned of suing companies that refused to advertise products on X and insulted them with obscenities. Musk's move only further muddies the situation as more and more companies pull out.
After the takeover, Musk removed the majority of staff he said were unnecessary, particularly in the advertising, customer relations and security teams that filter harmful content as a cost-cutting measure. The impact is now clearly visible making the value of X now 71% less than the $44 billion paid by Musk.