Twitter sees advertising revenue drop by 50%
At least, that’s what Musk says himself. Where Elon previously claimed that he had pulled the platform into the black numbers after a few months, those happy days now seem to be a thing of the past. It is also difficult to bind advertisers to you when you are working hard to destroy a platform that has rarely or never made money. Whatever money does come in to Twitter, Elon prefers not to spend on things like rent. No, you better use that to sue the law firm that forced Musk to buy Twitter.
Less income and a heavy debt burden
In April, Musk told the BBC that Twitter was about breaking even. At the time, Twitter was expected to become profitable in the second quarter. So that turned out to be quite the opposite. In a recent Tweet, Musk indicated that cash flow is still negative.
When Elon took over Twitter late last year, advertising revenue accounted for about 90% of the company’s total revenue. The fact that advertisers took off en masse after Musk bought the platform was therefore a bad sign. Linda Yaccarino took over from Elon and took over as CEO earlier this summer. Yaccarino is a proven force and had to ensure that advertisers come back. Now it’s too early to see her influence in last quarter’s numbers, it doesn’t seem like Yaccarino is succeeding in steering Twitter.
Musk has tried to make Twitter less dependent on advertising revenue. With the arrival of Twitter Blue, the platform would run on a fixed flow of subscription costs. All the jokes and pranks that have been played with paid verification aside, it was already warned at the time that such a plan would not make Twitter independent of advertising revenue. In fact, it could even cost Twitter money. Musk has taken the warning to himself, but can now only conclude that they were right.
Only 57% of top advertisers left through April
Musk’s Tweet reflects the trend that has been seen on Twitter for some time. Musk may have claimed that he was on the verge of turning the company into a profit in April, but revenues have only declined since he took office. Less than half of the top 1,000 advertisers were active on the platform in April when Musk made the comment. According to The New York Times, Twitter saw revenue fall 59% in the first week of May from the same period last year.
Musk is therefore decidedly less positive about the state of affairs. In a livestreamed event with Democratic presidential nominee Robert F. Kennedy Jr., he admitted that it has been “extremely difficult.” “Our revenues have been cut in half because we didn’t walk the right line (lit. ‘toe the line’ didn’t listen to the authorities).”
It’s choices like paying self-proclaimed misogynist Andrew Tate that have caused advertisers to flee. Musk will therefore have to look mainly at his own part in these extreme difficulties. Given the explosive popularity of Twitter competitor Threads, it may already be too late for Twitter and Musk.
