Elon Musk said that advertising revenue for Twitter has dropped 50% amid a “heavy debt load,” just as competition between the platform—which recently started to pay creators for advertisements—and Mark Zuckerberg’s rival Threads continues to intensify.
Key Takeaways
- Musk tweeted Saturday that Twitter still has a “negative cash flow” amid an estimated 50% decline in advertising revenue.
- Musk said in April the company was “roughly breaking even” as advertisers who had left the platform following his acquisition had returned, though a later New York Times report indicated ad revenue was down 59% over the previous year.
- Threads is not even hosting advertisements on its platform and so not competing with Twitter for revenue, despite interest from some advertisement firms.
- The platform started paying content creators for posting advertisements this week, with some users reporting payouts of over $US100,000, though it is unclear what sort of posts or which users are eligible for advertising payments.
Chief critics
Some Twitter users have criticized Twitter’s new payout system, suggesting only users with extreme beliefs are getting paid.
Rathbone DeBuys, a content creator from New Orleans, told the Washington Post he believes Musk is “picking the people that he wants to have a voice on the platform and silencing others.”
Kris Ruby, president of the Ruby Media Group, also told the Post she thinks “there are some conservative content creators who are unhappy,” adding, “I don’t think the playing field is level.”
Tangent
Threads—Meta’s competitor to Twitter—reached 100 million users as of Monday morning, making the app the fastest-growing platform in history.
Threads also had the most successful app launch in the last decade, according to Sensor Tower, after Threads was downloaded more than 40 million times on July 6.
Zuckerberg—who celebrated the app crossing 70 million signups—said the platform’s success was “way beyond our expectations.”
Despite the record-breaking launch, the app recorded a decline in user engagement last week, according to Sensor Tower data, as the average time spent on the app declined by 18% day-over-day between July 7 and July 13.
The average time spent on Twitter during the same time period was nearly six times larger.
Big number
$US5 million. That’s how much Twitter will pay creators through its first block of payments, according to Musk.
Forbes valuation
Musk is the richest person in the world with a net worth of $US250.4 billion, according to our latest estimates.
Key background
More than half of Twitter’s top advertisers left the platform after Musk’s acquisition in October, according to CNN. Musk said the platform would work to alleviate concerns from advertisers, though he noted maintaining “freedom of speech is paramount.”
The platform’s initiative to pay creators for advertisement posts was announced days after Linda Yaccarino—NBCUniversal’s head of advertising—was announced as Twitter’s new CEO.
It was speculated Yaccarino was hired to soothe Twitter’s advertisement woes, while Musk said Yaccarino would help “transform this platform into X,” an “everything app” Musk says will become “the biggest financial institution in the world.”
Last week, Twitter’s attorneys recently threatened to sue Meta over Thread for alleged misuse of Twitter’s “trade secrets and other intellectual property.”
This article was first published on forbes.com and all figures are in USD.
