Twitter lost half of its ad revenue, says Elon Musk
Twitter owner Elon Musk said his social media company lost half of its advertising revenue. On July 15, 2023, he tweeted that statement, saying his business is still in a “negative cash flow.” Also, Insider intelligence reported Twitter was likely to earn less than $3 billion in 2023. Microsoft Start says Musk’s latest changes discouraged users and advertisers.
Twitter is among the most popular social media networks, affecting how millions interact daily. However, negative changes could lead to its rapid decline and shutdown. Hence, looking closely at this issue lets you know how a social network functions like most companies. These platforms boom or bust, depending on their leadership.
Learn more about how social media companies run by reading this article. It will discuss the changes that may have led to the company’s dire financial situation. Later, I will cover the other issues it faces under its new CEO.
Why is Twitter losing money?
We’re still negative cash flow, due to ~50% drop in advertising revenue plus heavy debt load. Need to reach positive cash flow before we have the luxury of anything else.
— Elon Musk (@elonmusk) July 15, 2023
Elon Musk said, “We’re still negative cash flow due to ~50% drop in advertising revenue plus heavy debt load. Need to reach positive cash flow before we have the luxury of anything else.”
Elon Musk implemented numerous changes shortly after acquiring Twitter. Unfortunately, most of his decisions have been discouraging advertisers and users.
For example, he immediately reduced content moderation to fulfill his promise of turning Twitter into a “shared digital town square.” As a result, hate speech flooded the platform.
Some people began impersonating major companies. For example, a prankster created a fake pharmaceutical firm Eli Lilly account. Then, the unknown person tweeted, “We are excited to announce insulin is free now.”
Coincidentally, the company’s stock price fell by roughly 4.37%. Then, the tech billionaire over 80% of his workforce. Later, users complained about the site’s lagging performance.
Eventually, Twitter began implementing monetization features. For example, Musk announced paying for verification icons and divided them into three colors.
You can become a verified user by paying $8 monthly for the Twitter Blue program. Individuals receive blue checkmarks, politicians get silver, and companies receive gold.
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In early July, Chief Twit announced temporary reading limits for unverified, verified, and new unverified users. Here are the number of tweets each can read:
- Verified accounts are limited to reading 10,000 posts/day
- Unverified accounts to 1,000 posts/day
- New unverified accounts to 500/day
The rules heavily incentivize people to pay for Twitter Blue to read more tweets. Yet, these money-making moves weren’t enough to raise the company from the red.
In June, its Colorado office received an eviction notice after it failed to pay rent. The business owner admitted that his social media website is still struggling financially.
What are Twitter’s other problems?
Advertising revenue isn’t the only problem Twitter faces. The company has other issues that the new CEO, Linda Yaccarino, must resolve. Learn more about them below:
- Yaccarino must rebuild the company’s reputation to attract advertisers again. However, she must handle Elon Musk’s unpredictable actions.
- Also, she must find ways for the company to profit. In March 2023, Elon Musk said the company is less than half of what he paid to acquire it.
- The former NBC exec must balance content moderation with free speech. It must offer users freedom while ensuring they will not post content that will repel advertisers.
- Moreover, she must revitalize employee morale after Elon Musk’s actions. In October 2022, he told BBC he downsized from 8,000 workers to 1,500. Also, he ceased remote work and required employees to accept “long hours at high intensity.”
- Yaccarino is also racing against the clock as competitors see Twitter’s decline as an opportunity to grow.
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Conclusion
Twitter owner Elon Musk said his company lost roughly 50% of its advertising revenue. Moreover, he said his social media platform has massive debts.
It said it must earn more money before it has the “luxury of anything else.’ Consequently, the company might focus on its negative cash flow before implementing new strategies.
Will the social media network get back on its feet and soar above its competitors? Get the latest tips and trends regarding social media, gadgets, and more at Inquirer Tech.
