Elon Musk's plan to charge Twitter users a monthly fee is rooted in his desire to wring out more revenue from its customers while relying less on advertisers.
Why it matters: Social media and tech companies are getting hammered by a pullback in ad spending, which accounts for roughly 90% of Twitter's entire revenue.
- Add the fact that the company just went through a heavily leveraged buyout, and now Twitter has to start churning out more revenue — and fast.
Driving the news: Musk's assurances to advertisers that Twitter won't become "a free-for-all hellscape" are being undermined by Musk's own actions since taking over.
- After Musk spread misinformation about Paul Pelosi over the weekend, two of the major ad firms IPG and Havas Media advised their clients to pause spending on Twitter, according to the Wall Street Journal.
- So while Musk is busy trying to wrangle up new revenue for the company, his impulsiveness has managed to put Twitter's existing top-line cash in jeopardy.
Meanwhile: Two more top executives have left the company. CMO Leslie Berland and global sales VP Jean-Philippe Maheu were added to the list of departures Tuesday, according to Bloomberg.
