The CEO of Twitter, Elon Musk, has revealed that the social media platform has experienced a significant decline in its advertising revenue, approximately 50%, since he acquired it for $44 billion in October of last year.
Musk, who has been openly discussing the challenges Twitter is facing, shared these statistics in a tweet response to a user who was offering suggestions regarding financing options for the platform.
“We’re still negative cash flow, due to ~50% drop in advertising revenue plus heavy debt load,” the billionaire tweeted Saturday.
“Need to reach positive cash flow before we have the luxury of anything else,” he added, without further elaboration.
According to a report by Insider Intelligence, Twitter’s projected revenue for 2023 is less than $3 billion, which represents a one-third decrease from its 2022 earnings.
Since Elon Musk took over Twitter, the platform has implemented certain changes that have led to a decline in user and advertiser satisfaction.
Recently, Musk announced a new restriction stating that verified accounts would only be able to read up to 10,000 tweets per day.
This measure aims to combat excessive data scraping and system manipulation conducted by third-party platforms.
Twitter has introduced additional restrictions on non-verified users, who constitute the majority of its user base. These free accounts are now limited to reading 1,000 tweets per day, while new unverified accounts face a stricter limit of 500 tweets.
Starting next month, Twitter has announced that TweetDeck, a popular program enabling users to monitor multiple accounts simultaneously, will only be accessible to verified users.
These changes have coincided with the launch of Threads, an app developed by Meta, the parent company of Facebook.
Threads has gained over 100 million users within its initial five days, surpassing the growth rate of OpenAI’s ChatGPT, an artificial intelligence app that achieved the same user count in two months earlier this year.
Current estimations suggest that Threads has now amassed around 150 million users, with India emerging as a prominent market.
Its integration with Instagram, which provides access to over two billion users, has given Threads a significant advantage, sparing the platform from the challenge of building an audience from scratch.
Twitter is estimated to have approximately 200 million regular users, but since Elon Musk acquired the platform and made significant staff cuts, it has experienced frequent technical failures.
Concerns regarding privacy have risen with the introduction of Meta CEO Mark Zuckerberg’s new platform. Users are asked to grant Meta permission to closely track their online activities, which has raised privacy issues among many individuals.
Due to these privacy demands, the launch of Threads in Europe has faced delays. The region’s new regulations impose limitations on Meta’s ability to track and share data across its platform family.
The business model of Meta relies on collecting personal data for targeted advertising, and Threads accounts are connected to Instagram accounts.
However, it is unlikely that the embargo on Threads in Europe will remain permanent. Alexandre de Streel, an expert in European law, suggests that major tech companies will likely engage in discussions with the EU to address compliance issues in the upcoming months.
“I think it’s more a question of time to understand the scope of the legislation and have a dialogue with the commission,” he said.
