brazilrestriction of Elon Muskon the social network of ', Xwill have little impact on the business, which has long relied on the South American nation for user growth and cultural influence, but less for revenue.
According to several former employees who declined to share private figures, Brazil has historically been a small part of X's overall business, even though it is one of the services' biggest markets in terms of users. Annual revenue from Brazil was $80 million to $100 million in 2021, the last full year before Musk's acquisition, these people said. That was about 2% of the company's total sales.
This may help explain why Musk was willing to shut down X's office in Brazil rather than comply with a judge's orders to remove certain accounts for sharing alleged misinformation and hate speech. When Musk closed the office in August, X no longer had any legal representatives in the country, which was part of the Supreme Court judge's justification for banning the app last week.
“The decision to close the X office in Brazil was a difficult one,” Musk posted at the time, adding that agreeing with the judge's orders would have been even harder. “We had no way to explain our actions without embarrassing ourselves.”
While sales from Brazil will likely be a small part of X's overall business, any revenue is crucial for the company, which is still struggling to win back advertisers and pay down significant debt obligations. Some of the biggest advertisers that buy X's ads in Brazil, including Apple Inc. and Walt Disney Co., have already paused or cut spending on the service. It's possible that Brazil's share of X's business has grown since Musk's acquisition in late 2022, especially as sales in the U.S. have fallen by as much as 50%.
Musk's feud with Brazil could also lead to other business issues for the world's richest man. The same judge who banned X also froze the bank accounts in Brazil of satellite internet provider Starlink, which is part of Musk's rocket company SpaceX, in a bid to put pressure on Musk. Shortly after the bank freeze, Starlink eventually agreed to block X.
A spokesperson for Axe did not respond to a request for comment.
However, it will be hard to assess what the cultural impact of leaving Brazil and handing South America's largest country over to competitors will be. Executives at X, formerly known as Twitter, relied on Brazil to study trends in consumer behavior. In 2013, then-Brazilian President Dilma Rousseff returned to Twitter after a several-year hiatus to help revive her reelection bid in 2014, which she won, giving Twitter employees a chance to see its service in action in a heated democratic political contest. User conversations about the 2014 World Cup and the 2016 Olympics in Brazil also played a role in what Twitter executives thought of live events on the service, former employees said.
Market research company eMarketer estimates that X has more than 40 million monthly users in Brazil, down by about 5% from two years ago. Before the ban, eMarketer had predicted the audience would fall by another 6% over the next two years. Some competitors are already taking advantage of X’s ban. BlueSky, a decentralized social networking service that was funded in 2019 by Twitter and then-Chief Executive Officer Jack Dorsey, added more than a million new users in the three-day period that coincided with the ban, the company said Saturday.
According to several former employees who declined to share private figures, Brazil has historically been a small part of X's overall business, even though it is one of the services' biggest markets in terms of users. Annual revenue from Brazil was $80 million to $100 million in 2021, the last full year before Musk's acquisition, these people said. That was about 2% of the company's total sales.
This may help explain why Musk was willing to shut down X's office in Brazil rather than comply with a judge's orders to remove certain accounts for sharing alleged misinformation and hate speech. When Musk closed the office in August, X no longer had any legal representatives in the country, which was part of the Supreme Court judge's justification for banning the app last week.
“The decision to close the X office in Brazil was a difficult one,” Musk posted at the time, adding that agreeing with the judge's orders would have been even harder. “We had no way to explain our actions without embarrassing ourselves.”
While sales from Brazil will likely be a small part of X's overall business, any revenue is crucial for the company, which is still struggling to win back advertisers and pay down significant debt obligations. Some of the biggest advertisers that buy X's ads in Brazil, including Apple Inc. and Walt Disney Co., have already paused or cut spending on the service. It's possible that Brazil's share of X's business has grown since Musk's acquisition in late 2022, especially as sales in the U.S. have fallen by as much as 50%.
Musk's feud with Brazil could also lead to other business issues for the world's richest man. The same judge who banned X also froze the bank accounts in Brazil of satellite internet provider Starlink, which is part of Musk's rocket company SpaceX, in a bid to put pressure on Musk. Shortly after the bank freeze, Starlink eventually agreed to block X.
A spokesperson for Axe did not respond to a request for comment.
However, it will be hard to assess what the cultural impact of leaving Brazil and handing South America's largest country over to competitors will be. Executives at X, formerly known as Twitter, relied on Brazil to study trends in consumer behavior. In 2013, then-Brazilian President Dilma Rousseff returned to Twitter after a several-year hiatus to help revive her reelection bid in 2014, which she won, giving Twitter employees a chance to see its service in action in a heated democratic political contest. User conversations about the 2014 World Cup and the 2016 Olympics in Brazil also played a role in what Twitter executives thought of live events on the service, former employees said.
Market research company eMarketer estimates that X has more than 40 million monthly users in Brazil, down by about 5% from two years ago. Before the ban, eMarketer had predicted the audience would fall by another 6% over the next two years. Some competitors are already taking advantage of X’s ban. BlueSky, a decentralized social networking service that was funded in 2019 by Twitter and then-Chief Executive Officer Jack Dorsey, added more than a million new users in the three-day period that coincided with the ban, the company said Saturday.