Twitter’s downfall: Elon Musk’s Twitter loses half of its advertising revenue
Twitter loses half of its advertising revenue since it was taken over by Elon Musk for $44bn (£33.6bn) last October, its owner has said.
He said the firm had not seen the growth in sales expected in June but said that July was a “bit more promising”.
Elon Musk’s Twitter loses half of its advertising revenue:
Mr Musk sacked nearly half of Twitter’s 7,500 employees when he took over in 2022 to cut expenses. Rival app Threads currently has 150 million users, according to some stats.
Its in-built link to Instagram automatically gives the Meta-designed platform key to a potential two billion users.
Meanwhile, Twitter is stumbling under a heavy debt load. Cash flow stays negative, Mr Musk said at the weekend, although the billionaire did not set a time frame on the 50% decline in ad earnings.
He wrote: “Need to reach positive cash flow before we have the luxury of anything else.”
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After firing thousands of employees and cutting cloud service bills, Mr Musk told Twitter was on track to post $3bn (£2.29bn) in income in 2023, down from $5.1bn in 2021.
The result is the latest sign the aggressive cost-cutting efforts must be more to torch a return of advertisers who exited after changes to its content moderation rules.
That is despite an interview Mr Musk gave the press in April, where he said that most had come back to the site.
However, Meghana Dhar, the ex-head of partnerships at Snap and Meta, which has the new Twitter rival Threads, said the firm had been struggling before Mr Musk’s takeover.
“Elon and Twitter are in a candidly tough position right now,” she told the press. “To be fair to Elon though, we’ve seen that decline in Twitter revenue and growth in revenue since pre-Elon – there’s been kind of a steady decline.”
Lucy Coutts, investment manager at JM Finn, said: “You wouldn’t bet against him, he’s a kind of mercurial figure, and I think he will probably turn it around, but it is just going to take longer.”
