Just a few hours ago we learned that Elon Musk had broken all possible records after building a supercomputer in just 19 days, when these types of projects usually take 4 years. In this way, xAI has become one of the billionaire’s main joys, but not all of his companies are bringing him the same positive news. Unfortunately for the South African, X has once again become a headache for him. However, this time the loss of revenue helped him avoid the strictest European law.
According to the portal Ars Technica in a recent publication, X avoided being designated as a gatekeeper under the new Digital Markets Act. After an investigation, Europe concluded that it is not a significant gateway for business users to reach end-users. This, along with X’s argument that its revenues and users have decreased in Europe since Elon Musk’s acquisition, has reduced the platform’s relevance and placed it below the threshold of 7.5 billion euros annually.
X struggles with advertising revenue
Unfortunately for Musk’s interests, X’s advertising revenues continue to decline, making the company much smaller than other social networks in Europe. In fact, its user base is 133% smaller than Instagram or Facebook, and it also lags behind other options like LinkedIn. Therefore, unlike other gatekeepers like Meta or Google, X focuses primarily on brand advertising, a situation that limits its ability to offer targeted advertising and therefore measure its effectiveness.
At the moment, X does not have the ability to track users outside of its platform, which prevents them from verifying the advertising effectiveness of their actions. This has caused a decline in advertising revenues and a mass exodus of users, resulting in X not being classified as a gatekeeper, but this situation could change in the future if they manage to reverse it. However, their lax approach to content moderation has led to numerous advertising boycotts that are already hitting the company’s coffers.
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