Elon Musk’s Struggle Against Mark Zuckerberg Appears to be a Losing Battle

Elon Musk's desire to outshine Mark Zuckerberg is well-known in the tech world.

However, Musk's attempts to achieve this goal seem to be dwindling.

His platform, X, is facing challenges from advertisers and controversies surrounding misinformation, putting it at a disadvantage compared to Meta.

It seems like Musk is losing ground in his rivalry with Mark Zuckerberg, his long-standing opponent.

While Musk remains the wealthiest person globally, with a net worth of $228 billion, thanks to his investments in Tesla and SpaceX, recent controversies surrounding X have raised concerns about its future competitiveness against Zuckerberg's Meta empire.

Despite Musk's efforts in leading X for nearly two years from San Francisco, his confrontations with advertisers and involvement in spreading misinformation have posed significant risks to his company's financial and reputational standing in comparison to Zuckerberg's social media dominance.

If the current challenges persist, Musk may have to abandon hope of X ever catching up to Meta's valuation of $1.3 trillion, especially considering that X's current value is significantly lower than the $44 billion Musk paid for Twitter in 2022.

The Struggle for Revenue

One of Musk's primary hurdles in positioning X as a viable competitor to Zuckerberg's social media platforms is generating revenue.

Since Musk assumed control of X, he has been engaged in a constant battle with advertisers who are either leaving or threatening to depart due to concerns about the proliferation of misinformation on the platform.

This ongoing issue has significantly impacted X, with Musk expressing frustrations last year by telling advertisers to leave and attempting to encourage users to purchase ad-free subscriptions.

Decline in Revenue

Despite Musk's efforts, there has been little progress in addressing these challenges.

Recent reports from The New York Times revealed a 25% revenue decline for X from the first quarter of the year to $114 million, marking a 53% decrease compared to the same period last year.

On the contrary, Meta has experienced a substantial increase in advertising revenue, enabling the company to invest in emerging technologies like artificial intelligence. In the second quarter of this year, Meta's revenue, primarily driven by ads, surged by 22% year-on-year to $39 billion.

With dwindling hopes of reconciling with advertisers to narrow the gap with Meta, Musk's recent lawsuit against the Global Alliance for Responsible Media (GARM) in Texas has further strained relations with essential revenue sources for X.

Following Musk's legal actions, GARM reportedly suspended its activities, indicating the impact of Musk's aggressive stance on vital industry partners.

Impact of Misinformation

Recent events involving the dissemination of false information on X are unlikely to improve the platform's prospects for attracting advertisers and revenue in the near term.

Following riots in the UK in late July, X faced scrutiny over its role in amplifying false information that could incite further violence.

A study by the Center for Countering Digital Hate revealed that X contributed to 434 million views on posts by far-right figure Tommy Robinson during the UK riots, significantly increasing his online presence and promoting false narratives.

Musk's significant following on X, coupled with his amplification of misleading content, has raised concerns about the platform's role in disseminating reckless misinformation.

Furthermore, X's reluctance to remove controversial posts flagged as national security threats has drawn criticism from UK officials, prompting calls for stricter online misinformation regulations.

Despite the prevalence of misinformation on various platforms, X's hands-off approach to fact-checking, coupled with Musk's own involvement in promoting false information, has resulted in challenges in attracting advertisers and enhancing the platform's credibility.

If Musk concedes defeat to Zuckerberg, the responsibility for X's shortcomings will likely fall on his shoulders, despite any attempts to shift blame elsewhere.

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By: hchowdhury@insider.com (Hasan Chowdhury)
Title: Elon Musk’s Struggle Against Mark Zuckerberg Appears to be a Losing Battle
Sourced From: www.businessinsider.com/elon-musk-x-battle-mark-zuckerberg-meta-lost-cause-2024-8
Published Date: Sat, 10 Aug 2024 11:04:01 +0000