Elon Musk’s New Business Model For ExTwitter: Give Us Money Or We Sue

Failures

As you’ll likely recall, in late 2023, Elon Musk told advertisers to “go fuck yourself” and “don’t advertise” in response to a question about advertisers feeling uncomfortable placing their brands next to the kind of content that Musk was promoting via the ExTwitter algorithm. But the full context of the quote is interesting in retrospect:

“If somebody’s gonna try to blackmail me with advertising? Blackmail me with money? Go f—yourself.” He added, “Don’t advertise.”

Blackmail you with advertising, you say?

Because it sure looks like the blackmailing is now happening in the opposite direction. There had been some earlier reports hinting at this, but the Wall Street Journal has a big expose on how Linda Yaccarino and Elon Musk are telling advertisers if they don’t start throwing money at ExTwitter ads again, they’ll be added to the completely baseless lawsuit the company filed against advertisers.

The extortionate message is clear: buy our ads or we’ll cost you even more money in legal fees:

Late last year, Verizon Communications got an unusual message from a media company that wanted its business: Spend your ad dollars with us or we’ll see you in court.

The threat came from X, the social-media platform that has been struggling to resuscitate its ad business after many corporate advertisers fled over concerns about loosened content-moderation standards following Elon Musk’s $44 billion purchase in late 2022.

It worked. Verizon, which hadn’t advertised on X since 2022, pledged to spend at least $10 million this year on the platform, a person familiar with the matter said.

Fashion company Ralph Lauren also agreed to resume buying ads on X after receiving a lawsuit threat, people familiar with the matter said. All told, at least six companies that had either received lawsuit threats or were motivated in part by pressure tactics have struck ad deals with X, according to people familiar with the negotiations. The agreements include both firm ad-spending commitments and nonbinding targets.

In Elon’s world, the shakedown works in one direction only.

The article suggests this extortion racket may be “working,” with ad revenue reportedly ticking up for the first time under Musk’s tenure.

But “working” is relative when you consider what Musk promised investors: In his original pitch to investors, Musk promised $12 billion in advertising revenue by 2028, plus another $10 billion from subscriptions. Instead, he’s reduced to threatening companies with lawsuits to squeeze out marginal ad spending increases. It’s the business equivalent of a protection racket—and about as far from his original vision as you can get.

Notably left out of the WSJ article is the fact that at least some of the advertisers seemed to return to the platform due to a different—but equally stupid—reason: post-election sucking up to the Trump regime. There were multiple reports just after the election and early in the new administration, that advertisers were returning to the platform.

But, notably, in none of these stories is anyone returning to advertise on ExTwitter because they’re getting any particular value from those ads. Indeed, ad execs have made it clear how unappealing it is, since doing so may provide negative value, as no matter what they do it engages them in a culture war they’d rather not have anything to do with.

The WSJ report notes how the list of defendants in Musk’s lawsuit against advertisers seems to keep changing, most likely based on what kinds of deals are made:

Amazon, which had pulled much of its spending from X in late 2023, began spending more on ads earlier this year after months of negotiations that involved Amazon Chief Executive Andy Jassy.

Last November, while discussions were under way, X added Amazon’s Twitch Interactive to the lawsuit, according to people familiar with the matter. X notified the court last month that it dismissed its claims against Twitch.

What the WSJ piece doesn’t fully capture is just how fundamentally unsustainable this business model is. This isn’t a tech visionary disrupting advertising—it’s a failed CEO resorting to legal intimidation because he can’t deliver actual value to advertisers.

Think about it: Musk spent $44 billion promising to revolutionize social media, then drove away the very advertisers who were supposed to fund his grand vision. Now he’s reduced to what amounts to a protection racket, threatening lawsuits to extract ad dollars from companies that would rather spend their money literally anywhere else.

These fear-based advertising commitments are inherently fragile. Companies pressured into spending on ExTwitter aren’t getting meaningful returns on their ad investments—they’re just paying to avoid legal hassles. The moment Musk’s leverage weakens, whether through the lawsuit’s resolution, his political influence waning, or simply advertiser fatigue with being extorted, these deals will evaporate.

You can threaten all the lawsuits you want, but you can’t litigate your way to a sustainable business model. Advertisers who return based on intimidation rather than results are just waiting for the first opportunity to leave again. And you definitely can’t sue your way back to the $12 billion in annual ad revenue you promised investors.

The real story here isn’t about advertising strategy—it’s about the spectacular failure of ego-driven dealmaking that’s created a business model dependent on fear rather than value. That’s not innovation—that’s desperation masquerading as strategy.

Filed Under: advertising, elon musk, linda yaccarino, litigation, threats
Companies: amazon, twitter, verizon, x