According to an update provided to investors, Twitter’s revenue and adjusted earnings reportedly decreased by 40% on an annual basis in December, as a result of several advertisers pulling out after Elon Musk took charge of the company. The decline in advertising spending on the social media platform has been significant, with data from research company Standard Media Index indicating a 71% drop since Musk’s acquisition of Twitter on October 27 for $44 billion. The reported plunge in revenue may not come as a surprise given Musk’s handling of the company, which has alienated users and advertisers alike.
Musk has been accused of delaying Twitter’s payment for Amazon’s cloud computing services, causing the e-commerce company to threaten to withhold its advertising payment to Twitter, as reported by The Information. Furthermore, Twitter sales and marketing staff were reportedly warned by colleagues in February about Amazon’s threat.
Musk’s tenure as CEO has been turbulent, characterised by controversial moves such as sacking more than half of the company’s employees and shutting down units and offices globally. In Twitter’s last financial report before the acquisition, the company swung to a net loss of over $270 million in the second quarter of 2022, compared to a net income of about $65.6 million in the same period a year earlier.
Despite Musk’s claims that the company was losing $4 million a day, he previously outlined plans to increase the platform’s revenue by five times to $26.4 billion by 2028. He also raised the possibility of the company going bankrupt in November. Last month, Musk said that Twitter’s algorithm could be opened up to the public, though no concrete developments have yet emerged. Such a move could signal a significant shift in the company’s direction, allowing the public to inspect and scrutinise Twitter’s proprietary software, pitch ideas to developers, and even use it in their own apps.
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