The initial excitement around Elon Musk’s major purchase is now beginning to fade away. Critical questions about where the advertising revenue will come from are now popping up.
While censorship has a cost, being a free-speech absolutist is threatening to dent Twitter’s $5 billion annual advertising business, since companies are now concerned about the future of the platform.
According to a recent Financial Times report, Musk’s reign, still in its early days, has led to a confrontation with the biggest brands and advertisers. The latter are worried about content moderation on the platform, the layoffs within the marketing and sales teams, and the infamous rollout of the blue-tick service that led to high-profile impersonations.
The report says Musk has been calling up several sales executives, confronting them about the falling spends.
Many advertisers have now reduced their spending to the bare minimum, enough to avoid a confrontation with the new Twitter boss. The layoffs in the company have created another problem for advertisers.
Many company representatives are now unable to either retrieve analytics for their previous campaigns or plan for future campaigns, given that many are without a point of contact in the company after the layoffs.
Last week, the new sales head for Twitter called it quits, citing the inability to fire more people from the sales team and, therefore, going against Musk.
Starting from the end of November, Musk is planning to relaunch the verification service, with different badges for governments, officials, celebrities, and influencers, in a bid to turn the company profitable.
However, at $8 per month, not many are optimistic about the verification service helping to turn the company’s fortunes around.
As Twitter Blue, a paid service introduced by Musk, was rolled out initially, the platform was soon taken over by fake accounts with a blue tick, impersonating businesses and engaging in misinformation.
One of the first casualties was the American pharmaceutical giant Eli Lilly.
Losing over $15 billion in market capitalisation, Eli Lilly was a victim of a fake tweet made from an account that claimed that insulin was free. The share price went from $366 to $346, roughly, before recovering to $352.
Another account, pretending to be Lockheed Martin, put out a tweet claiming that weapon sales to Israel, Saudi Arabia, and the United States were being halted unless human rights violations were curtailed and an investigation was ordered.
Earlier this month, Musk dropped another bombshell, saying the possibility of a Twitter bankruptcy could not be ruled out.
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