Twitter’s decline: Revenue falls by more than 40 per cent since Musk took over as advertisers desert

Twitter’s sales and adjusted profits are expected to fall 40% year on year in December 2022 due to an advertiser exodus following Elon Musk’s takeover. Twitter no longer publishes profits since Musk purchased the business and took it private in late October. According to people familiar with the issue quoted in a Wall Street Journal story on Friday, Twitter disclosed their December 2022 revenue and earnings to be declining in an update to investors. Advertisers show no confidence Many major corporations reduced their Twitter advertising expenditure soon after Musk’s acquisition, primarily due to worries about content moderation. Twitter provided special offers to marketers throughout December 2022, but it was insufficient to prevent the 40 per cent drop in revenue and profit. Halfway through December, approximately 70 per cent of Twitter’s top 100 ad spenders from before Musk’s acquisition were allegedly not advertising on the platform anymore. Some advertisers have returned, due in part to Super Bowl agreements in February, so revenue figures in the first months of 2023 could be higher. Also read: After layoffs, Elon Musk announces massive bonuses, stock awards for remaining Twitter staff Because Twitter disclosed quarterly earnings when it was a public business, it’s unclear what the precise revenue and earnings figures were for either December 2021 or December 2022. Its sales for the fourth quarter of 2021 was $1.57 billion, with a net gain of $182 million. Despite the profit in the fourth quarter of 2021, Twitter recorded a total loss of $221 million for the entire year of 2021. Twitter’s mounting losses “Twitter has made a loss in eight of the ten years from 2012 to 2021 and hasn’t turned a profit since 2019,” the Wall Street Journal reported. Twitter’s most recent published earnings report before Musk purchased the business was for the second quarter of 2022. Twitter recorded $1.18 billion in revenue and a net loss of $270 million in that period. Musk revealed a week after his acquisition that Twitter was haemorrhaging more than $4 million per day. He cut expenses by firing half of Twitter’s workers, firing thousands of contractors, and giving an ultimatum that prompted many employees to quit. Musk stated in early February that he had an “extremely difficult” three months because he “had to save Twitter from bankruptcy… Twitter still has difficulties, but is now moving towards breakeven if we keep at it." Musk used $13 billion in debt to finance his acquisition, resulting in annual interest payments of $1.5 billion. In January, Twitter allegedly paid the first interest payment of approximately $300 million. “Some of Twitter’s debt bears an annual interest rate of nearly 15%,” according to the WSJ story. Musk and his cost-cutting measures - are they working? Musk appears to have long-term intentions to introduce payment capability to Twitter and thus compete with services like PayPal, but for the time being, income is generated through advertising and subscriptions. His redesigned Twitter Blue service has failed to draw many paying users, leaving Twitter far short of Musk’s aim of “roughly half of our income being a subscription."   Also read: Elon Musk calls Twitter ‘world’s largest non-profit’; pokes fun on his decision to buy it According to internal documents, Twitter will be making roughly $2 million dollars a month from Twitter Blue, or about $24 million a year. Another issue is how to keep Twitter operating efficiently with a much-reduced staff as a result of Musk’s cost-cutting measures. That problem became obvious today, when an API update appeared to have broken all links on Twitter for about 45 minutes. Musk claimed that a “small API change had huge repercussions,” while Twitter’s “code stack is highly fragile for no good reason” and will “require a full rebuild." Read all the  Latest News ,  Trending News ,  Cricket News ,  Bollywood News , India News  and  Entertainment News  here. Follow us on  Facebook ,  Twitter  and  Instagram .