Twitter Inc. reported a 40% year-over-year drop in both revenue and adjusted earnings for the month of December, according to the Wall Street Journal, citing people familiar with the matter. According to data from advertising research firm Standard Media Index, several advertisers cut their spending on the social-media platform after Elon Musk took over the company on October 27, resulting in a 71% drop in advertising spending on Twitter during December.
Twitter did not immediately respond to a request for comment from Reuters. Musk, who warned in November that Twitter might go bankrupt, said in December that the company was on track to reach “roughly cash flow break-even” in 2023. In January, Twitter made its first interest payment on a loan provided by banks to help finance billionaire Musk’s purchase of the social media company last year.
Twitter’s fourth-quarter revenue fell 35% year on year to $1.025 billion, according to a top ad executive at a staff meeting on Wednesday, the most detailed indication yet of how much revenue has fallen. According to a slide shown to employees, this represented 72% of Twitter’s internal goal for the quarter.
Musk tweeted on Friday that Twitter was losing more than $4 million per day, owing largely to advertisers fleeing after he took over. He has blamed civil rights activists for putting pressure on advertisers, but many in the advertising industry believe his tweets spreading conspiracy theories have played a role.
Twitter’s annual revenue in 2020 was $3.72 billion USD. However, the company’s net income has only been positive in 2018 and 2019.
To keep up with its debt, Twitter will have to pay about $1 billion per year, according to previous Bloomberg calculations. Bloomberg reported on Monday that annual interest alone could exceed $1.2 billion.
Social media are online platforms that enable users to exchange content, thereby connecting them as a network. It’s a powerful, game-changing idea, and no matter how many forms it takes in the future, the demise of social media as an idea appears unlikely, at least in the near future. Twitter’s India business has made a net profit for the past seven fiscal years, but its revenue remains insignificant in comparison to global operations.
End-to-end encryption ensures that messages are encrypted when they leave the sender and decrypted when they arrive at the recipient. To make this work, both parties must use a cryptographic key pair to encrypt and decrypt their messages.