NEW YORK (July 16): Twitter has lost roughly half of its advertising revenue, according to owner Elon Musk, since he bought the social media platform for $44 billion last October.
Musk, who has been outspoken about the difficulties facing the company, broke the figures in a tweet response to a user who was giving suggestions on financing 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.
Insider Intelligence has reported that Twitter was set to earn less than $3 billion in revenue in 2023, down one-third from 2022.
Changes instituted by Musk since his takeover of Twitter have turned off users and advertisers alike.
Earlier this month, Musk announced that Twitter was limiting verified accounts to reading 10,000 tweets a day, in a bid “to address extreme levels of data scraping” and “system manipulation” by third-party platforms.
Non-verified users — the free accounts that make up the majority of users — are limited to reading 1,000 tweets per day, while new unverified accounts are limited to 500 tweets.
Twitter has also said TweetDeck, a popular program that allows users to monitor several accounts at once, will only be available to verified users from next month.
The changes came as Threads, an app launched by Facebook parent Meta as a rival to Twitter, registered more than 100 million users in its first five days.
Earlier this year, the artificial intelligence app ChatGPT, created by OpenAI, took two months to reach the same number of active users.
According to some estimates, Threads has now reached 150 million users, with India leading the way, boosted by its link to Instagram that gives it a built-in audience of more than two billion users and spares the platform the challenge of starting from scratch.
Twitter is thought to have around 200 million regular users but it has suffered repeated technical failures since Musk bought the platform and sacked thousands of staff.
Many have expressed privacy concerns over Meta CEO Mark Zuckerberg’s new platform, which asks users to give Meta permission to track them closely across the internet.
Those demands have delayed the launch of Threads in Europe, where new legislation limits the ability of Meta to track and share data across its family of platforms.
Its business model revolves around sucking up personal data to use for targeted ads and Threads accounts are linked to Instagram accounts.
But few expect Threads to maintain its embargo in Europe indefinitely.
European law expert Alexandre de Streel said big tech firms would probably be hammering out compliance issues with the EU over the coming 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.
Musk has also threatened to sue Meta for stealing trade secrets and intellectual property, claims denied by the company.
In a letter to Zuckerberg, published by the online news outlet Semafor this week, Musk’s lawyer also accused the company of recruiting dozens of former Twitter employees who “had and continue to have access to Twitter’s trade secrets and other highly confidential information.”
The two men have been bickering for years, but things have become heated since it became clear Meta intended to compete with Twitter. — AFP