In a significant blow to the social media giant, Twitter has reportedly experienced a drastic 50% decline in Advertising Revenue since its acquisition by Elon Musk for a staggering $44 billion in October of last year.
Elon Musk disclosed this startling information in a tweet response to a user offering suggestions on financing the platform.
On Saturday, the outspoken billionaire shared his concerns: “We’re still facing negative cash flow due to a 50% drop in advertising revenue plus a heavy debt load.” Musk provided no further details but emphasized the pressing need to achieve positive cash flow before pursuing other endeavors.
Industry experts at Insider Intelligence have projected that Twitter Ads revenue for 2023 will be under $3 billion, marking a one-third decrease compared to the previous year. This decline is attributed to the changes implemented by Musk since taking over the platform, which has resulted in the alienation of both users and advertisers alike.
One notable alteration, announced by Elon Musk earlier this month, involves restricting verified accounts on Twitter to a daily reading limit of 10,000 tweets. This measure aims to combat “extreme data scraping” and “system manipulation” by third-party platforms.
Non-verified Twitter users, who constitute most of Twitter’s user base, face a more stringent limit of 1,000 tweets per day, while new unverified accounts are restricted to 500 tweets.
Furthermore, Twitter recently disclosed that its popular TweetDeck program, enabling users to monitor multiple accounts simultaneously, will soon be exclusive to verified users. These changes come at a critical juncture, as Meta’s Threads app, designed as a rival to Twitter, managed to amass over 100 million users within its first five days of launch.
In contrast, it took the artificial intelligence app ChatGPT, developed by OpenAI, two months to achieve the same level of user adoption earlier this year.
Estimates indicate that Threads has now surpassed 150 million users, with India leading the pack, benefiting from its association with Instagram, which grants it access to a pre-existing audience of more than two billion users, thereby eliminating the challenge of starting from scratch.
While Twitter boasts approximately 200 million regular users, the platform has encountered recurring technical glitches since Musk’s acquisition and subsequent mass layoffs of thousands of employees. These ongoing challenges further compound the company’s struggles amidst the steep decline in advertising revenue.