Elon Musk’s troubles with Twitter are really starting to mount. And that’s being illustrated by this New York Times article that a reader pointed me towards were Twitter is massively missing its ad revenue targets at a time that Twitter should not only be hitting them, but exceeding them:
The World Cup has historically been a boon for Twitter, bringing in record traffic and an influx of advertising dollars.
But this time, when the global soccer tournament started on Nov. 20, Twitter’s U.S. ad revenue was running at 80 percent below internal expectations for that week, three people with knowledge of the figures said.
In tandem, Twitter was rapidly cutting its revenue projections. The company previously forecast that it would generate $1.4 billion in the last three months of the year, down from $1.6 billion a year ago because of the global economic downturn. But as Twitter kept missing its weekly advertising targets, that number slid to $1.3 billion, then to $1.1 billion, two people said.
Elon Musk, Twitter’s new owner, has warned repeatedly that his social media company faces dire financial straits. Interviews with seven former employees and internal documents seen by The New York Times paint a fuller picture of Twitter’s financial woes.
Here’s why this is happening according to the Times:
Many of the company’s troubles can be traced to Mr. Musk’s takeover in late October. Since then, advertisers — which provide 90 percent of Twitter’s revenue — have paused some spending on the platform, citing concerns about how Mr. Musk might change the service. The billionaire, a self-described “free speech absolutist,” has reinstated banned accounts and dropped at least one misinformation policy. Hate speech on Twitter has soared in recent weeks, researchers found.
At the same time, Mr. Musk has alternated between wooing advertisers and blasting them. Last month, he threatened a “thermonuclear name & shame” of brands that halted their spending on Twitter. This week, he briefly picked a fight with Apple, which was on track to spend more than $180 million on Twitter ads this year, three people said.
Elon has really painted himself into a corner here with no clear way to get himself out of the situation that he’s in. His behavior has sent Twitter into free fall. And at some point he’ll have to make a call as to what he will do to salvage the situation. Because the longer that this goes on, the less options that Elon has at his disposal. Which means that it is more likely that Twitter crashes and burns under his watch.