Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
X chief executive Linda Yaccarino has announced that users will soon have the ability to make investments or trades directly on the social media platform. This move is part of owner Elon Musk’s vision to transform the platform into an “everything app”. Yaccarino shared in an interview at the Cannes Lions advertising festival that users will be able to conduct their entire financial transactions on X, from paying for a pizza to making investments. She also mentioned the possibility of introducing an X credit or debit card as early as this year.
This strategic shift towards financial services aligns with Musk’s goal to model X after China’s WeChat, a comprehensive platform that offers messaging, payments, and shopping services. X has already announced plans to launch X Money, a digital wallet and peer-to-peer payment service in partnership with Visa. Yaccarino revealed that X Money will first launch in the US before expanding to other markets, allowing users to purchase merchandise, store value, and tip creators on the platform.
While this expansion into financial services presents new opportunities for X, it also poses regulatory challenges such as compliance with licensing and anti-money laundering regulations. The platform has been grappling with financial difficulties following a decline in advertising revenue after Musk’s acquisition. Advertisers raised concerns about the platform’s moderation practices and Musk’s controversial use of the platform.
Tensions between X’s leadership and advertisers have escalated, with Yaccarino refuting claims that the company threatened brands with lawsuits to secure advertising deals. X filed a federal antitrust lawsuit against the Global Alliance for Responsible Media and several brands, alleging an “illegal boycott” under the guise of an online safety initiative. Despite these challenges, X has seen a return of 96% of its advertising clients pre-acquisition.
Emarketer projects that X’s revenue will increase to $2.3bn this year, up from $1.9bn the previous year. Yaccarino also highlighted plans to enhance X’s artificial intelligence capabilities following its acquisition by xAI, Musk’s AI startup. With a focus on delivering advertising against trending content in real-time, X aims to leverage its increased engineering resources to improve the platform’s performance.
In conclusion, X’s foray into financial services marks a significant shift in its business strategy under Musk’s leadership. Despite facing regulatory hurdles and advertiser skepticism, the platform is poised to reshape the digital landscape with its ambitious vision for an all-encompassing “everything app”.
