Twitter’s revenue, adjusted earnings drop about 40% in December: report

Twitter reported a 40% year-on-year decline in revenue and adjusted earnings for December in an investor update.

The Information reported that Amazon has threatened to withhold payment for ads the company runs on Twitter because the micro-blogging platform has refused to pay its Amazon Web Services bills for cloud computing services for months.

Last year, following the takeover, Musk highlighted the issues plaguing the financial health of the world’s largest microblogging platform.

In addition, Musk has $13 billion in debt that he borrowed to finance Twitter’s purchase, totalling annual interest payments of about $1 billion.

Recently, Musk made the first interest payment to a group of banks that lent him $13 billion.

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Musk has been trying hard to increase Twitter’s revenue and launched the paid subscription of Twitter Blue after an initial delay. However, it has not found many takers. ET reported on February 10 that Twitter users in India — a big market for the platform — largely gave a thumbs down to its paid subscription service, saying the prices were steep by Indian standards.

At Rs 900 per month for mobile devices and Rs 650 for web devices, users said the blue checkmark had little value-add beyond ‘bragging rights’.

Twitter Blue’s monthly cost is higher than Netflix, Spotify, Apple Music, and several other global services which are generally cheaper in markets with low Gross Domestic Product growth rates.

Why are advertisers leaving Twitter?

Shortly after Musk took over Twitter, many advertisers paused spending on the platform. It was a serious concern as advertising represented almost 90% of Twitter’s revenue in 2021.

In a bid to assuage advertisers, Musk wrote a letter addressing them and said, “Twitter aspires to be the most respected advertising platform in the world that strengthens your brand and grows your enterprise. To everyone who has partnered with us, I thank you. Let us build something extraordinary together.”

Also read | Elon Musk says Twitter cannot be ‘free-for-all hellscape’, reveals why he bought it

According to a Reuters report in January, citing data from market intelligence platform Pathmatics, 14 of the top 30 advertisers on Twitter stopped all advertising on the platform after Musk took charge on October 27. Further, four advertisers reduced spending between 92% and 98.7% from the week before Musk’s acquisition through the end of the year.

The report added that overall advertising spending by the top 30 companies fell by 42% to an estimated $53.8 million for November and December combined, despite an increase in spending by six of them.

Another report in tech publication The Information citing sources said more than 500 of Twitter’s advertisers had paused spending on the microblogging site since Musk took charge.

Though Twitter recently said that some of its advertisers are returning, the situation is yet to improve as online marketing and advertisement spends have plummeted as clients cut budgets to save costs.