Twitter’s revenue drops amid advertisers’ concerns and valuation drop circulets over social media

Twitter is experiencing a significant decline in advertising revenue, with reports indicating a 40% drop since more than 500 clients paused their spending. Advertising is the primary source of income for Twitter, contributing to over 90% of the platform’s revenue, which amounted to $5.1bn in 2021. However, since Elon Musk’s takeover in October, firms such as Pfizer and Audi have withdrawn their advertising spend, citing concerns about the increase in hate speech and impersonator accounts on the platform. Twitter’s revenue for the fourth quarter alone fell approximately 35%, according to internal staff meetings, while the Financial Times reported that Twitter is expected to make payments on its near-$13bn debt burden at the end of March. Musk has considered options, including selling more of his shares in Tesla or putting Twitter into bankruptcy protection. In December, Musk warned of Twitter’s “negative cashflow situation of $3bn a year.” Still, he claimed the company should break even after cost-cutting efforts and the departure of over 5,000 staff. Last month, Musk stated that Twitter was no longer in danger of going bankrupt, having been on the fast lane to bankruptcy after his takeover. Despite these challenges, Twitter has continued to launch new features and experiment with new monetization methods. The company recently announced the acquisition of the newsletter platform Revue, which allows writers and publishers to monetize their content. Twitter has also introduced “Super Follows,” allowing users to charge followers for exclusive content, and “Spaces,” a live audio chat feature. Twitter’s declining advertising revenue remains a significant concern for the platform. The company will need to find new ways to generate income while addressing advertisers’ concerns about hate speech and impersonation accounts. Nevertheless, Twitter’s recent acquisitions and experimentation with new features demonstrate the company’s willingness to adapt and explore alternative revenue streams.

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