Elon Musk's takeover of the messaging service Twitter in 2022 made waves in the economy. The billionaire's bold move to put around $44 billion on the table for the microblogging platform resulted in profound changes. Thousands of employees were laid off.

However, it appears that this aggressive cost-cutting strategy has not borne the desired fruit. Advertising revenue unexpectedly fell by 50 percent and the company faces major challenges.

What went wrong?

Just last Saturday, Musk acknowledged on Twitter that cash flow remains negative. The reasons? Advertising revenue has plummeted and the debt burden is growing. In March, Musk was still confident that positive cash flow could be achieved by June. But his predictions are way off the mark.

In order to get Twitter back on track after the takeover, Musk introduced a series of cost reductions in the fall of 2022. The expectation was that advertising revenue would recover. However, this does not seem to have happened as quickly as Musk claimed in an interview with the BBC in April.

The exodus of advertisers

Many advertisers had jumped ship from Twitter because they didn't want to see their ads next to inappropriate content. Although Musk assured that most advertisers have returned, the reality seems to be different.

Competition through threads

As Twitter wrestles with its problems, a new challenger is emerging: threads. With more than 100 million users already, Threads could soon become the new top dog among microblogging services.

Twitter: What now?

Musk emphasized in his tweet that Twitter's priority is to generate positive cash flow "before we can afford anything else." Although the details are still unclear, this suggests a possible recapitalization of the company.

It is also unclear to what period Musk was referring to his statement about a 50 percent decline in advertising revenue. In the past, he had promised that the company was on track to generate $3 billion in revenue in 2023 - a significant decline from 2021's $5.1 billion.

A moving takeover

Musk's takeover of Twitter was turbulent from the start. After Musk had already stopped the project because of allegedly manipulated user accounts, a court case forced him to continue. After delisting Twitter, he laid off much of the workforce and took over the reins himself.

Conclusion

The acquisition of Twitter by Elon Musk, CEO of Tesla and other companies, caused a stir in the digital world. But the ambitious goals and radical strategies do not seem to be working so far. The platform may face an uncertain future, with advertising revenue plummeting and competition from Threads emerging. It remains to be seen to what extent Musk's unorthodox methods can ultimately save Twitter.

This might also interest you:

“Threads”: Meta launches challenge against Twitter
Twitter wants to sue Meta over threads
“Threads” in the crosshairs: Treacherous fake apps in the spotlight


If you enjoyed this post and value the importance of well-founded information, become part of the exclusive Mimikama Club! Support our work and help us promote awareness and combat misinformation. As a club member you receive:

📬 Special Weekly Newsletter: Get exclusive content straight to your inbox.
🎥 Exclusive video* “Fact Checker Basic Course”: Learn from Andre Wolf how to recognize and combat misinformation.
📅 Early access to in-depth articles and fact checks: always be one step ahead.
📄 Bonus articles, just for you: Discover content you won't find anywhere else.
📝 Participation in webinars and workshops : Join us live or watch the recordings.
✔️ Quality exchange: Discuss safely in our comment function without trolls and bots.

Join us and become part of a community that stands for truth and clarity. Together we can make the world a little better!

* In this special course, Andre Wolf will teach you how to recognize and effectively combat misinformation. After completing the video, you have the opportunity to join our research team and actively participate in the education - an opportunity that is exclusively reserved for our club members!


Notes:
1) This content reflects the current state of affairs at the time of publication. The reproduction of individual images, screenshots, embeds or video sequences serves to discuss the topic. 2) Individual contributions were created through the use of machine assistance and were carefully checked by the Mimikama editorial team before publication. ( Reason )