Elon Musk continues to play the Devil Wears Pradaishque monster boss for Twitter employees. After a series of sackings of top Twitter officials, Elon Musk has put in more tough measures to help the company wade through a possible bankruptcy.
It is also learnt through media reports that some more officials have quit on their own accord.
Musk purchased the company for a whooping $ 44 billion. As per media sources, the company can go bankrupt if it doesn’t start generating revenue.
Musk has changed rules for verification and charging a fee of $ 8 per month for Blue Tick, which will provide several benefits to the users in select countries.
The bankruptcy fears were triggered after Marketers including General Mills Inc., Pfizer Inc., Mondelez International Inc. and General Motors Co. said they are pausing advertising with Twitter because of lack of clarity on Musk’s plans.
Following this Musk reported “massive drop in revenue” in a tweet last Friday.
While paid subscription model is too new to generate any revenue as of now, it will be pertinent to understand how the company made money. Twitter’s services are not free.
According to Investpedia, in its financial reporting, the company separates its revenue into two categories – advertising services; and data licensing.
Advertising services generated $4.5 billion, or about 89%, of Twitter’s revenue in FY 2021.
The company creates targeted advertising opportunities by using an algorithm to make sure promoted products make it into the right users’ timelines, search results, profile pages, and Tweet conversations.
Over 11% of Twitter’s revenue in FY 2021, or $571.8 million, was generated from data licensing and other sources.
Twitter also sells data licenses that enable its data partners to access and analyze historical and real-time data on the company’s platform. The “other sources” include service fees Twitter collects from users of its mobile ad exchange, MoPub. However, Twitter completed the sale of its MoPub business on Jan. 1, 2022.
The social media company founded in 2006 announced on April 25, 2022 that Elon Musk, founder and chief executive officer (CEO) of Tesla Inc. and the richest person in the world, would acquire the company for $44 billion.