Ever since he took over Twitter, Elon Musk encountered many problems. Yesterday, he admitted that Twitter ad revenue fell by 50%. The income from advertisers caused a negative cash flow, which now makes things worse.
This recognition comes in the same week with the start of a new payment program for some creators. This additionally worsened the situation due to cash outflow. On the other hand, we can’t help ourselves from noticing that a good part of the problem also lies in the recent limitation of daily content views. This might also have caused the drop in Twitter ad revenue.
This literally drove many users to Threads, which has apparently been launched at the right time, and reached the figure of 100 million registered users in just a week.
Last week, Musk also claimed the social network could see “all-time high device user seconds usage” sometime this week, However, this claim still needs to be proven.
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Twitter ad revenue is falling due to many reasons
At the same time, Bloomberg claims that Twitter’s advertising business fell by 89% in the last two months. Also, Reuters reports that Twitter pays $1.5 billion annually to repay the company’s loan realized just after Musk took it over.
Twitter ad revenue and the overall situation in the company obviously forced Musk to sharply cut costs. We have also seen that in some cases he has gone too far. A bizarre example happened not so long ago when Twitter stopped paying rent for its business offices.
How will the Twitter saga end, remains to be seen. Competition in the form of Zuckerberg’s Threads is doing pretty well at this point. What is more intriguing, it has achieved a major milestone even without EU users, due to regulation issues.
Elon Musk added that “positive cash flow before we have the luxury of anything else”. Meanwhile, newly appointed CEO Linda Yaccarinao said that Twitter is working hard to establish a new base of advertisers, in order to overcome these negative trends.
