Twitter challenges mount as usage and ad revenue decline

Twitter is facing significant challenges as its usage and ad revenue continue to decline, despite recent efforts to boost the social media platform.
Twitter blue check markElon Musk, the promoter of Twitter, recently shared data revealing a mere 3.5 percent increase in Total User Active Seconds on the social media platform globally. This underwhelming growth raises concerns about Twitter’s long-term viability.

According to Elon Musk’s data, a staggering 87 percent of Twitter’s active users access the platform via mobile devices. The United Kingdom emerged as the leading country in terms of user activity, accounting for 7.2 percent of total active seconds, closely followed by Japan with 5.7 percent. This surprising statistic prompted a user to question Musk about Twitter’s popularity in Japan compared to the United States. Elon Musk responded, revealing that Japan’s per capita usage of Twitter is roughly three times that of the United States.

Despite the mobile dominance, Twitter’s financial situation remains precarious. The company recently introduced a revenue sharing program for creators and started making substantial payments to selected participants. Creators shared their earnings from this program on Twitter, with one individual receiving $37,050, another getting $11,820, and a third creator remarkably receiving $69,420.
Twitter users July 2023However, Twitter’s cash flow remains negative, primarily due to a significant drop of nearly 50 percent in advertising revenue and the burden of heavy debt. Elon Musk expressed disappointment that Twitter did not achieve positive cash flow as he had anticipated by June.

The company’s aggressive cost-cutting measures, including employee layoffs and reduced expenses, have proven insufficient. Elon Musk’s previous statement that most advertisers had returned to the platform also seems to be inaccurate, as Twitter’s ad revenue recovery appears to be slower than expected.

Twitter’s financial struggles are further compounded by its debt load and annual interest payments of approximately $1.5 billion resulting from its privatization deal worth $44 billion. Elon Musk had projected a reduction in non-debt expenditures from $4.5 billion to $1.5 billion in 2023, but the decline in ad revenue hampers the company’s progress towards financial stability. Elon Musk had initially estimated that Twitter would generate $3 billion in revenue in 2023, down from $5.1 billion in 2021.

To address these challenges, Elon Musk recently appointed Linda Yaccarino, the former ad chief at Comcast’s NBCUniversal, as Twitter’s CEO. Yaccarino aims to prioritize ad sales while also exploring opportunities to increase subscription revenue. She has emphasized Twitter’s focus on video, creator and commerce partnerships, and has initiated discussions with figures from the political, entertainment, payments, news, and media sectors.

As Twitter navigates this turbulent period, the company must find innovative ways to attract and retain users, reinvigorate its ad revenue, and effectively monetize its platform. The strategic decisions made by Elon Musk and Linda Yaccarino will play a crucial role in determining Twitter’s future trajectory in an increasingly competitive social media landscape.