Title: Twitter Loses Nearly Half of Advertising Revenue Following Elon Musk’s Acquisition
Subtitle: Cost-cutting measures and content moderation rule changes fail to attract advertisers back to the social media platform
Date: [Current Date]
In a surprising revelation, Twitter has disclosed that it has experienced a significant decline in advertising revenue since Elon Musk’s acquisition for a staggering $44 billion (£33.6bn) in October of last year. The platform’s owner has acknowledged that the increase in sales anticipated for June did not materialize, although there have been signs of improvement in July.
Elon Musk, known for his cost-focused strategies, promptly reduced Twitter’s workforce by about 50% following his takeover in 2022 as part of an effort to streamline operations and minimize expenses.
Meanwhile, rival app Threads has reportedly amassed a user base of 150 million, according to estimates. With its inherent connection to Instagram, the platform developed by Meta now has the potential to reach an audience of two billion users, giving it a formidable advantage over its competition.
Conversely, Twitter’s struggles persist as it grapples with a substantial debt load. Mr. Musk revealed over the weekend that the company’s cash flow continues to be negative. However, he did not specify a timeframe for the reported 50% drop in ad revenue.
Expressing his aspirations, Musk tweeted, “Need to reach positive cash flow before we have the luxury of anything else.”
In an attempt to reverse the situation, Twitter has resorted to laying off thousands of employees and reducing cloud service bills. Elon Musk remains optimistic about the platform’s future, asserting that Twitter is on track to generate $3 billion (£2.29bn) in revenue in 2023, down from $5.1 billion in 2021.
Despite the aggressive cost-cutting measures, the latest developments indicate that advertisers have not returned to the platform in the expected numbers. The changes to Twitter’s content moderation rules prompted many advertisers to withdraw from the platform, and it appears that they have not been enticed back.
Former CEO, in an April interview with the BBC, had suggested that most advertisers had returned to the site, but it seems that this is not the case.
Furthermore, Twitter recently decided to restrict the number of tweets users can read, a move aimed at promoting its paid subscription service, Twitter Blue.
The appointment of Linda Yaccarino as CEO in June, the former head of advertising at NBCUniversal, suggests that advertising sales remain a top priority for Twitter. Yaccarino has outlined Twitter’s plans to focus on video, creator, and commerce partnerships. The platform is engaged in early discussions with political and entertainment figures, payment services, and news and media publishers.
For Elon Musk and his team, the challenge now lies in finding a way to reverse the decline in advertising revenue and entice advertisers back to Twitter’s platform. Only time will tell if Musk’s cost-cutting measures and future initiatives will prove successful in reviving the platform’s fortunes.