Shulou(Shulou.com)11/24 Report--

March 5, according to people familiar with the matter, since Elon Musk took over Twitter, many advertisers have given up advertising on the social media platform, leading to a drop in Twitter's revenue and adjusted profits in December.

In its latest news to investors, Twitter said revenue and adjusted profits fell about 40 per cent in December from a year earlier, according to people familiar with the matter. Several advertisers cut spending on Twitter immediately after Mr Musk took over on October 27, 2022, and Twitter's advertising revenue fell 71 per cent in December last year, according to Standard Media Index, an advertising research firm.

Twitter didn't immediately respond to a request for comment. Musk warned in November that Twitter could go bankrupt. He said in December that the company was expected to achieve a basic "cash flow break-even" by 2023. Twitter's full-year revenue in 2020 was $3.72 billion, but the company's net profit was positive only in 2018 and 2019.

Twitter is still saddled with high debt, and Musk is trying to stabilize the company's financial position. It is reported that to help Musk complete the acquisition, Twitter needs to repay about $13 billion in debt, with annual interest of more than $1 billion. The company recently paid the first interest to the bank, according to people familiar with the matter.

Musk tweeted on Friday that Twitter lost more than $4 million a day, mainly because advertisers fled after he took over. He accused civil rights activists of putting pressure on advertisers, but many in the advertising industry believe that Mr Musk's tweets spreading conspiracy theories also played a role.

According to market intelligence platform Pathmatics, 14 of the top 30 advertisers on Twitter stopped all advertising on the platform after Musk took over. In addition, from the week before Musk was acquired to the end of the year, four advertisers cut advertising spending by 92% to 98.7%.

Meanwhile, overall advertising spending among the top 30 companies fell 42 per cent, or about $53.8 million, in November and December, although six of them increased their spending. Earlier, sources confirmed that more than 500 advertisers had suspended spending on Twitter since Musk's acquisition.

Although Twitter recently said that many advertisers are coming back, the situation has not improved much, as online marketing and advertising spending has fallen sharply as customers cut budgets to save costs. While many large companies, including Apple and Amazon, have returned to Twitter, the company's advertising business is once again under threat because of Twitter's controversial cost-cutting strategy.

In addition, Twitter is said to refuse to pay certain suppliers, some of which are also the largest advertisers on the platform. Some Twitter employees were recently told that Amazon threatened to stop paying for its advertising because Twitter had not paid its bill for using Amazon's cloud computing network AWS for months.

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