Twitter counts cost of Elon Musk’s ownership

Twitter’s owner and current CEO is weighing on the company’s advertisers, even as Elon Musk tells the press that the company is now close to breaking even – but not because its revenues have grown.

In a recent interview with the BBC, which was largely about the politics and strife of taking over the website late in 2022, Musk said the company was “roughly breaking even” after sacking around 6,500 staff – a move that has done little to reassure advertisers on the platform.

Why it matters

The company FKA Twitter Inc., now part of Musk’s X Holdings Corp, looks ahead to bigger challenges: not least establishing a successful subscription tier that doesn’t shred the platform’s credibility, and paving the way to it forming part of a much-hyped “everything app”.

For Musk – and the Musk brand – the news that his ownership may be holding Twitter back portends greater difficulties across the expanse of his spaceflight-to-electric-car empire, whose reputation (and stock price) has traditionally been tied closely to his personal reputation for technical brilliance.

The cost of Musk

Insider Intelligence data, reported by Quartz, attributes a 28% ad revenue decline to the billionaire’s erratic behaviour.

• This is based on forecast 2023 revenues of $2.98bn, down from $4.14bn in 2022.
• “Advertisers don’t trust Musk,” explained the research firm’s principal analyst Jasmine Enberg in a statement to Quartz, adding that any efforts to reassure brands are unlikely to work with Musk as CEO.
• “Twitter needs to unravel Musk’s personal brand from the company’s corporate image to regain advertiser trust and bring back ad dollars.”

Broadly, the issues that brands had identified with Twitter were not the same ones Musk had: ad performance wasn’t as good as the Twitter’s rivals and content moderation had been a concern, but they broadly felt that the platform had been in good hands and was working toward improving.

In context

For months, the platform has been mired in uncertainty, and has suffered regular embarrassments like last month’s leak of Twitter’s source code, which it then had to release itself.

Sourced from BBC, Quartz, Ars Technica, Independent, WARC