Formerly called Twitter, X.com has been the topic of many conversations in the tech and media landscape. From changing its name, to paid checkmarks, and owner Elon Musk making outrageous comments, it has been a busy year for the social media company. Yahoo Finance Tech Editor Dan Howley joins the Live show to review X's 2023 and why the company makes the top 10 list for Yahoo Finance's top stories of the year.

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Video Transcript

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JULIE HYMAN: We are counting down to the top 10 stories of 2023 here at Yahoo Finance. And coming in at number 10, x becomes X.

Twitter isn't worth what it used to be. After paying $44 billion for the social media company in October, Elon Musk now values his company at just $20 billion. In a tweet, Musk announcing that he's found a new CEO.

BRAD SMITH: Well, the Securities and Exchange Commission is suing Elon Musk to force him to testify about his purchase of Twitter, now known as X.

TODD KRIZELMAN: Overall, 2023 has been a real turnaround year for X.

JULIE HYMAN: It has been indeed quite an eventful year for the social network, formerly known as Twitter. X got a new name and CEO, but the platform is also contending with several hurdles due to owner Elon Musk's controversial posts. Here with a snapshot of the year in review for X, Yahoo Finance's Dan Howley is here with us on set. So let's run through the year that was for X, shall we?

DAN HOWLEY: Yeah. It's been a lot for the company. Here's just a few of the biggest things that happened in the year that X became X. Let's kick things off in March when news came out that, as you had said, in the past, Twitter's valuation dropped from $44 billion that Musk paid for the company just $20 billion. Then that same month, Musk named Linda Yaccarino the new CEO of Twitter. And then he took over the role of CTO. Although from what we've been seeing, I don't even know what that means at this point.

Smelling some blood in the water, Mark Zuckerberg and Meta in July launched their Twitter competitor Threads in a bid to grab users and more importantly advertisers who disapproved of Musk's decision to reinstate previously banned accounts and his own controversial comments. And then also in July, Musk did the famous rebrand. He ended Twitter, killed the bird and turned it into X. He said the company hit a new all-time high of 531 million monthly users.

Then in September, Musk said advertising revenue for X was down 60%. And then he blamed the Anti-Defamation League, saying the group, which fights antisemitism, was the biggest generator of antisemitism content on X. He then met with prime minister, Israeli Prime Minister Benjamin Netanyahu to discuss AI as well as antisemitism. Then he claimed that X had 550 million monthly active users.

In October-- we're not even done with the year yet somehow-- the SEC sued Musk to force him to testify about a probe into Twitter's share purchases around the time Musk was buying the company in November. This is going to be the big month. It was miserable for X. First, Musk expressed support for an antisemitism post, drawing condemnation from the ADL, White House, and advertisers. Then after left-leaning Media Matters for America issued a report saying that ads on X for companies, including Apple, IBM, and others appeared next to Nazi content, advertisers began pulling out of the company.

After that, Musk went on a rant about advertisers during an interview at the New York Times DealBook summit, cursing out companies that pulled their ads and specifically calling out Disney CEO Bob Iger. More recently, just this week, Musk reactivated conspiracy theorist Alex Jones's account. And then he also made Grok, the ChatGPT rival for x.AI, available for X Premium Plus subscribers.

So, whoa, interesting. How is this not number one? I don't understand. But, you know, whatever, I'll give it for number 10. Just a mind-blowing year for this company, probably not Linda Yaccarino's favorite time to be part of a company.

JOSH LIPTON: No. You know, it's interesting-- I mean, that's a lot of drama. That's a lot-- that's a lot of headlines. What do you-- what do you think is ahead for 2024? Let me ask you this. When you think about its business, just the economics of X, do you think its advertising, given all the challenges there? Is it subscriptions? Is it AI? Is it some combination of those three?

JULIE HYMAN: It's the super app.

DAN HOWLEY: Yeah.

JOSH LIPTON: Is that it?

DAN HOWLEY: Look, advertising-- and, you know, we've seen advertisers pull out of X before. They've also pulled out of Facebook, by the way. And then everybody jumped back on, because they were like, well, we need to show our stuff to people. So we'll see how long this all lasts, right?

But advertising is still its key revenue driver. But they are continuing to push the subscription service. They have the X premium X, Premium Plus, the Premium Plus, so you don't have ads. Premium is you see fewer ads, but you're still paying. So why do you see ads to begin with? I don't really get that.

So it's going to be the subscription model and then adding more features to X Premium and Premium Plus. So that's where the Grok comes in with Premium Plus. They're kind of trying to make it more of an app where everything happens. You can also upload much longer video content with the more premium subscription service. So that's really where the revenue goes.

But, I mean, you know, there's been predictions from some companies where they say, look, this is where X ends. I don't really think so. Everybody says the demise of these social networks is coming. And then it never happens. And, you know, for X, obviously, it's not a publicly traded company at the moment, they seemingly want to do that in the future, we'll see. But they said the same thing about Meta. And then its share prices shot up.

So I don't know if necessarily this is going to be the end. People still want to advertise.

JULIE HYMAN: Yeah I'm just sad that they're using Grok, which is from one of my favorite novels from when I was younger, "Stranger in a Strange Land." But be that as it may. You know, it's also interesting to me, because you do have these competing social networks, right? And I know you went through the litany of all the things. Alex Jones, like, is that-- you know, what is the Rubicon here when it comes to X? Because, right, there's this-- when you recite all of the things that have happened in the past year, what is the thing, like, beyond which that's the tipping point in some way?

DAN HOWLEY: Like, when do they go beyond the pale? Like, I don't think they do, right? I think--

JULIE HYMAN: I guess it depends on who you ask or who's using the platform or who you want to use the platform or whatever else, right?

DAN HOWLEY: I think the only thing that can have a big negative impact on X outside of advertisers leaving and people condemning Elon Musk for his behavior is if something comes along that can actually replace it. Now I mentioned Threads. Threads isn't exactly blowing up. You know, it's not like this huge mind-blowing app. A lot of that has to do with the functionality that it doesn't offer, right?

They can bring over people. People, every once in a while, I see people come on saying, you know, I'm done with X, whatever. But they need a kind of desktop replacement version of Threads with what used to be TweetDeck for professionals and social media. And you know, I mean, then you'll start to see probably people leave X more and more.

But there's also true believers, right, who think that Elon Musk is the end all be all. And they want to follow him into whatever area he starts tweeting about next. So we'll just have to see. I mean, you know, he's the CTO, but he commands so much of the attention of that company that I said it before jokingly, but is Linda Yaccarino getting the due respect that she deserves as CEO when he's going on stage and telling the people that she's supposed to be working with to basically take a hike? You got to wonder. So, yeah, I don't think there's anything though that's beyond the pale at this point.

JOSH LIPTON: I like, how you went with take a hike there, which felt like a much more family-friendly version of what was actually said.

DAN HOWLEY: In my head, I was like, don't say what he actually said.

JOSH LIPTON: Dan Howley, thank you. Thank you, buddy.