Elon Musk-owned Twitter reported a drop of 40 per cent in revenue and adjusted earnings in the month of December, year-on-year, as per a report by the Wall Street Journal.
The report may not be to Musk’s liking who made Twitter’s first interest payment to banks that helped finance his purchase of the social media company for $44 billion last year.
Notably, it was Musk who warned Twitter employees, two weeks after purchasing the company that he could not rule out bankruptcy as a possibility.
Advertising is the main source of income for the microblogging platform. However, Twitter has seen advertisers flee amid worries about Musk’s approach to content moderation rules.
Days after taking charge of the company, Musk informed that the company had seen a “massive” drop in revenue and blamed activist groups for pressuring advertisers.
“Twitter has had a massive drop in revenue, due to activist groups pressuring advertisers, even though nothing has changed with content moderation and we did everything we could to appease the activists. Extremely messed up! They’re trying to destroy free speech in America,” tweeted Musk.
The company can lose billions of dollars in the upcoming fiscal year, he said. He claimed that the company is losing over four million dollars daily in part due to advertisers leaving.
In 2021, advertising accounted for 90 per cent of Twitter’s $5.1 billion in revenues. Companies such as Coca-Cola, Jeep, Unilever, Merck and Wells Fargo have refused to pay for ads on the platform.
Data shows that HBO, one of the remaining top advertisers on the platform only spent $54,000 on ads in January this year, compared to a whopping $12 million, last year in September.
Initially, Apple pulled the plug on its advertisements on the platform as well but returned after receiving some assurances.
Consequently, Musk has focused on reducing the excess flab in the company to cut costs. He has fired more than 5,000 employees, shutting offices in unproductive spaces and still managed to keep the product working.
To earn more money, Musk has also monetised the ‘blue tick’ that was earlier granted to famous personalities only. Musk has introduced new plans for the Twitter Blue subscription service, which offers the sought-after “verified” badge.
(With inputs from agencies)
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