Twitter, owned by Elon Musk, has experienced a significant decline in advertising revenue, which has dropped by 50%. This decline comes as competition between Twitter and Meta’s rival platform, Threads, intensifies.
In addition to the drop in revenue, Musk revealed that Twitter still faces a negative cash flow due to its heavy debt burden. As a result, Musk emphasized the importance of achieving positive cash flow before exploring any other luxuries.
Earlier, Musk had mentioned that the company was “roughly breaking even” after advertisers who had previously left the platform due to his acquisition began returning. In fact, Musk stated that “almost all of them have either come back or said they’re coming back” during a Twitter Spaces session in April.
Estimates from market research firm Sensor Tower showed that advertiser spending plummeted by 89%, reaching $7.6 million in just two months earlier this year. This drop was significant compared to the $71 million that the top 10 advertisers had spent on ads between September and October of 2022, prior to Musk’s acquisition, as reported by Bloomberg.
Musk acquired Twitter for a whopping $44 billion in October 2022. The acquisition led to the layoff of thousands of employees. In addition, Twitter introduced a new feature called Twitter Blue, allowing users to verify their identity for a monthly fee of $8.
Meanwhile, Mark Zuckerberg of Meta Platforms Inc. released Threads, a Twitter competitor that quickly amassed 100 million users in the days following its launch.