Twitter's Advertising Revenue Drops Significantly After Elon Musk's Leadership Takeover
Twitter has lost nearly half of its advertising revenue since Elon Musk purchased it for $44 billion (£33.6 billion) last October, according to its owner.
He stated that the company did not observe the predicted growth in sales in June, but that July was "a little more promising."
In an effort to save costs, Mr Musk fired over half of Twitter's 7,500 employees when he took over in 2022.
According to some estimates, rival app Threads now has 150 million users.
Its built-in Instagram connection instantaneously grants the Meta-designed platform access to a potential two billion users.
Meanwhile, Twitter is labouring under a mountain of debt. Mr Musk stated over the weekend that cash flow remains negative, though the entrepreneur did not provide a time frame for the 50% decline in ad revenue.
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He stated in a tweet, "Need to reach positive cash flow before we have the luxury of anything else."
The BBC's Today show quoted Lucy Coutts, investment director at JM Finn, as saying she thought Elon Musk could save Twitter, "but it will just take longer."
He must pay off $13 billion in debt by the end of July, so if he is forced to sell more of his shares of Tesla, the pressure on those stocks may increase.
Mr Musk is also the CEO and majority shareholder of Tesla, which will release its latest quarterly financial results on Wednesday.
Mr Musk stated that Twitter was on course to generate $3 billion (£2.29 billion) in income in 2023, down from $5.1 billion in 2021, after laying off thousands of people and slashing cloud service prices.
The development is the latest indication that aggressive cost-cutting measures have failed to entice advertisers who departed following revisions to its content moderation standards.
This is despite Mr Musk's April interview with the BBC, in which he claimed that most people had returned to the site.
Meghana Dhar, the former head of partnerships at Snap and Meta, which owns the new Twitter rival Threads, said the company was floundering until Mr Musk bought it out.
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She noted on the BBC's Today programme that "Elon and Twitter are in an extremely difficult position right now." To be fair to Elon, we have observed the drop in Twitter revenue and growth in revenue ever since the company was founded.
Linda Yaccarino, previously the head of advertising at NBCUniversal, was appointed CEO of Twitter in June, indicating that advertising sales remain a priority for the company.
Twitter aims to focus on video, creative, and commerce relationships, according to Ms Yaccarino. It is claimed to be in preliminary discussions with politicians and entertainers, payment services, and news and media companies.
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