Elon Musk revealed on Twitter that due to a significant decline in advertising revenue and a substantial debt burden, the platform continues to experience negative cash flow.
The billionaire entrepreneur responded to a follower’s business advice with a tweet stating, “Need to reach positive cash flow before we have the luxury of anything else.” This statement contrasts sharply with Musk’s previous assertion in April, when he informed the BBC that the platform was “roughly breaking even” and that most advertisers had returned.
The issue of advertising revenue has been a contentious and challenging one for Twitter, as numerous advertisers abandoned the platform following Musk’s takeover. Concerns regarding content moderation, mass layoffs, and general uncertainty about Twitter’s future contributed to their departure.
Linda Yaccarino, a former executive at NBCUniversal, recently assumed the role of CEO from Musk, with hopes that her advertising experience will help attract advertisers back to the platform.
According to an internal presentation cited by The New York Times (not viewed by CNN), Twitter’s advertising revenue in the United States for the five-week period from April 1 to the first week of May decreased by 59% compared to the previous year.
Data from market intelligence firm Sensor Tower, provided to CNN, revealed that only 43% of Twitter’s top 1,000 advertisers as of September, the month before Musk’s takeover, were still actively advertising on the platform in April.
Musk acknowledged the difficulties Twitter has faced during a Twitter Spaces livestream event last month, where he hosted a discussion with Robert F. Kennedy, Jr. He stated, “It’s definitely been extremely difficult… Our revenue is cut in half because we didn’t toe the line,” emphasizing the challenges Twitter has encountered in achieving profitability.
Additionally, Twitter faces increasing pressure as its competitor app, Meta’s Threads, surpassed 100 million downloads within a week of its launch.
To address the financial situation, Musk has implemented several measures on the site, including offering blue checkmarks through a Twitter Blue membership and placing Tweetdeck behind a paywall.
On Thursday, Twitter announced a new initiative allowing content creators to earn a portion of the site’s ad revenue, aiming to attract more creators to the platform. Eligible creators must have a Twitter Blue membership and achieve at least 5 million impressions on their posts in each of the last three months.
{Matzav.com}
