Twitter’s ad Revenue Plummets 50% Since Elon Musk’s Takeover
TECHDIGEST– Since its acquisition by Elon Musk for $44 billion in October last year, Twitter has seen a drastic decline in advertising revenue, losing nearly half of its revenue in the process. Despite initial expectations for increased sales in June, the company struggled to meet projections.
Musk’s cost-cutting measures, including laying off about half of Twitter’s staff, have not been sufficient to bring back advertisers who departed after changes to content moderation rules.
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Meanwhile, rival app Threads has surged in popularity, boasting around 150 million users and benefiting from its connection to Instagram, granting access to a potential two billion users.
The mounting pressure on Twitter is compounded by its heavy debt load, with negative cash flow and the need to reach positive cash flow before pursuing other endeavors, as stated by Musk.
While Musk is optimistic about turning Twitter around, its $13 billion debt to be paid by the end of July adds further strain. The company is targeting $3 billion in revenue for 2023, a significant drop from $5.1 billion in 2021. Despite the challenges, Twitter’s new chief executive, Linda Yaccarino, plans to focus on video, creator and commerce partnerships, signaling a continued commitment to advertising sales. However, the road to recovery for Twitter remains uncertain as it faces tough competition from Threads and grapples with financial pressures.
