Twitter could return to profitability, but must respond to its cost cuts
About five months after the takeover of Twitter, Elon Musk is confident for the future, but must be more and more accountable.
The billionaire who acquired the social network at the end of October, for 44 billion dollars under a long soap opera greatly upset the group at the blue bird with massive layoffs, new offers, but also some breakdowns and hiccups very publicized.
The boss of Tesla believes in all to be on the way to succeeding in his bet: while recognizing a “massive” decline in advertising the new boss of Twitter believes that the group’s finances are improving: Twitter could reach profitability in terms of cash flow (cash flow) in the second quarter, which could even become positive over this period, he said said at a Morgan Stanley investor conference in San Francisco.
In the second quarter of 2022, before it went public, Twitter posted net cash of $30 million, down sharply from $382 million in the same period a year earlier.
If the financial aspect is better, the owner of the American company must also justify himself on his drastic cost cuts, with in particular the departure announced in the fall of half of the workforce. It is, in fact, the subject of increasingly strong pressure on both sides of the Atlantic.
This week, the FTC, American Competition Authority, requested a number of documents as well as the testimony of Elon Musk. The FTC investigation aims to determine whether Twitter has enough resources to protect the privacy of its users after the massive layoffs and budget cuts ordered by Elon Musk reports the “New York Times” , citing unnamed sources. FTC asked Twitter to deliver internal communications related to Elon Musk, along with detailed information about layoffs, documents found by the “Wall Street Journal” .
In a dozen letters sent to Twitter and its lawyers since Elon Musk’s takeover, the Authority also asked the company to identify all journalists with access to company records and to provide information. on the launch of the service Blue Twitter subscription plan revamped.
The Authority had already begun investigating a former executive’s allegations of security issues and stepped up its investigation following the abrupt resignation of executives responsible for privacy, security and compliance.
Meanwhile, on the Old Continent, the European Union asked Elon Musk to hire more human moderators and verification specialists to review Twitter posts, reports the Financial Times citing people familiar with discussions between Musk, Twitter executives and regulators in Brussels.
Twitter currently uses a combination of human moderation and artificial intelligence technology to detect and review problematic content, similar to other social media. However, it does not use “fact checkers”, unlike its great rival Meta, parent company of Facebook and Instagram. The San Francisco group also uses voluntary moderators through “community notes”. But it wouldn’t have as big of a volunteer force as Wikipedia, for example, and moderation would still be limited in non-English languages.
Exchanges took place with European Commissioner Thierry Breton on this subject. “We intend to fully comply the “Digital Service Act” (the new legislation on content moderation, Ed) and we have had several productive discussions with EU officials about our efforts in this area,” the company told the British daily.
For several months, the question of moderation on Twitter has been the subject of strong concerns. And this even as Elon Musk defends a vision very broad freedom of expression.
At Tuesday’s keynote, Elon Musk said Twitter would have gone bankrupt within months if it hadn’t taken steps to cut costs.