According to IT magazines Platformer and The Information, Twitter’s daily advertising revenue on January 17 was 40% lower than it was at the same time last year.
As Elon Musk implements his content regulation plan, which is contentious, and fundamentally changes the social platform, there are increasing worries about the company’s survival.
The decrease in revenue reportedly follows a spending freeze by more than 500 of the company’s top advertisers since Musk became CEO in October.
Large corporations like Apple, Ford and Pfizer have been reported to distance themselves from the site and cast doubt on Musk’s method of content control.
After Musk took over the company, the Wall Street Journal reported that General Mills, Pfizer, Audi, Volkswagen, and Mondelez International Inc.—the company that makes Oreos—stopped advertising on Twitter, in part because of worries about how Twitter will police content.
According to reports, the advertising firm Interpublic Group, whose customers include CVS and Nintendo, has advised clients to temporarily avoid purchasing Twitter advertisements.
For a business like Twitter, which relies heavily on advertising and generates more than 90% of its revenue, the loss of so many important sponsors is alarming.
Musk posted an open letter to advertisers in October, vowing that Twitter would not turn into a “free-for-all hellscape, where anything can be spoken with no consequences” under his leadership.
The user would be able to “choose your desired experience according to your preferences,” he added.
The type of content that is prohibited on Twitter has been drastically restricted by Musk, who has referred to himself as a “free speech absolutist,” restoring many banned accounts and causing an increase in hate speech, which authorities have claimed the company also fails to take down promptly.
Meanwhile, the Financial Times reported that Twitter is about to make an interest payment on the $13 billion debt used to finance Musk’s $44 billion acquisition.