Elon Musk, the owner of Twitter, revealed that the social media platform has experienced a significant decline in advertising revenue since his acquisition of the company for $44 billion in October.
Musk, known for his candidness regarding the challenges Twitter faces, shared this information in response to a user’s suggestions on financing for the platform via a tweet.
On Saturday, the billionaire tweeted, “We’re still facing negative cash flow due to a ~50% drop in advertising revenue, coupled with a heavy debt load.” Musk added that reaching positive cash flow is a priority before considering other luxuries, without providing further details.
Insider Intelligence reported that Twitter’s revenue for 2023 is projected to be less than $3 billion, reflecting a one-third decrease from 2022.
Changes implemented by Musk since assuming control of Twitter have not been well-received by users and advertisers alike.
Earlier this month, Musk announced a limitation on the number of tweets verified accounts can read per day, with the aim of addressing excessive data scraping and system manipulation by third-party platforms.
Non-verified users, which constitute the majority of Twitter’s user base, are restricted to reading 1,000 tweets daily, while new unverified accounts are limited to 500 tweets.
Starting next month, only verified users will have access to TweetDeck, a popular program enabling users to monitor multiple accounts simultaneously.
These modifications coincide with the rapid growth of Threads, a rival app launched by Meta, the parent company of Facebook, which garnered over 100 million users within its first five days.
Estimates suggest that Threads now boasts 150 million users, with India leading the charge.
Its integration with Instagram provides a built-in audience of more than two billion users, sparing the platform the challenge of starting from scratch.
Twitter currently has approximately 200 million regular users, but the platform has encountered numerous technical setbacks since Musk’s acquisition and subsequent layoffs of thousands of employees.
Legal battles have also emerged in relation to Meta’s CEO Mark Zuckerberg’s new platform, which requires users to grant permission for extensive tracking across the internet.
This requirement has delayed the launch of Threads in Europe, where regulations restrict Meta’s ability to track and share data across its network of platforms.
Meta’s business model heavily relies on collecting personal data for targeted advertisements, and Threads accounts are linked to Instagram accounts.
However, few anticipate the embargo on Threads in Europe to last indefinitely.
Alexandre de Streel, an expert in European law, believes that major tech companies will likely engage in discussions with the EU to address compliance concerns over the coming months. “I think it’s more a matter of time to understand the extent of the legislation and engage in a dialogue with the commission,” he stated.
Additionally, Musk has threatened to sue Meta for alleged theft of trade secrets and intellectual property, although the company denies these claims.
In a letter addressed to Zuckerberg, published by online news outlet Semafor, Musk’s lawyer accused Meta of hiring numerous former Twitter employees who had access to confidential information and trade secrets.
While the rivalry between the two individuals has been ongoing for years, tensions have escalated since Meta’s intentions to compete with Twitter became apparent.
