Twitter’s revenue dropped by nearly 40% in December after advertisers fled in the aftermath of CEO Elon Musk’s acquisition of the platform, The Wall Street Journal reported Friday, citing sources familiar with the situation.
Twitter reported the year-over-year drop in both revenue and earnings in a message to the app’s investors, the sources said, according to the WSJ. The company is currently working to pay off the nearly $13 billion in debt stemming from Musk’s initial purchase, with yearly interest payments totaling approximately $1 billion.
After Musk completed his purchase of the app in October 2022, advertisers began abandoning the platform en masse. Roughly 70 of Twitter’s 100 main advertisers prior to Musk’s takeover have not spent on the platform as of Feb. 25, according to the WSJ, citing a report by research firm Pathmatics. (RELATED: Elon Musk Receives Ominous Warning From China After Endorsing Lab Leak Theory)
Advertisers cited their reasons for leaving the app to fear that their ads would appear near “controversial content,” the WSJ previously reported.
The ability of Twitter advertising to reach the most influential people in the world is often not fully appreciated.
While a few other social networks are technically bigger, Twitter is where the writers & leaders spend their time.
— Elon Musk (@elonmusk) March 2, 2023
As advertising accounts for roughly 90% of Twitter’s revenue stream — raking in roughly $4.5 billion of Twitter’s $5.1 billion earnings in 2021 alone — the company has made multiple attempts to win them back to the app, including offering free ad space and a spending match of up to $250,000 for promoted ads that could be run during the Super Bowl, the WSJ previously reported.
Musk also attempted to raise revenue for the platform with a new rollout of Twitter Blue, a paid subscription to the app that allows users to edit tweets and access exclusive content, the WSJ reported, though the initial November launch was marred by the creation of accounts impersonating companies and notable figures including weapon maker Lockheed Martin, former President George W. Bush and pharmaceutical company Eli Lilly, among others.
Musk has also made efforts to drastically reduce costs by cutting thousands of jobs. As of December 2022, Twitter’s staff was down to roughly 2,000 employees from a previous 8,000, according to the WSJ. The company announced another round of layoffs the weekend of Feb. 24, but the number of jobs cut was not revealed publicly.
Musk stated publicly that he expects Twitter to break even in 2023.
Last 3 months were extremely tough, as had to save Twitter from bankruptcy, while fulfilling essential Tesla & SpaceX duties. Wouldn’t wish that pain on anyone.
Twitter still has challenges, but is now trending to breakeven if we keep at it. Public support is much appreciated!
— Elon Musk (@elonmusk) February 5, 2023
“Twitter still has challenges, but is now trending to breakeven if we keep at it,” he tweeted Feb. 5.
Twitter did not immediately respond to the Daily Caller News Foundation’s request for comment.
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