In a bid to boost its advertising revenue and move closer to its goal of becoming a super app, Twitter has announced that it will start compensating select creators for ads served in their replies. The announcement came from none other than former CEO Elon Musk, who has been at the helm of the platform since October of last year.
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| Image created with Penguin AI |
Under this new initiative, only verified users will be eligible for payment, and the ads will need to be served to other verified users to count. Musk revealed in a tweet that the program is set to launch "in a few weeks," with the initial round of payments amounting to $5 million.
The timing of this advertising push is noteworthy as it coincides with the appointment of Linda Yaccarino as Twitter's new CEO. Yaccarino, who brings a wealth of advertising experience from her previous role at NBCUniversal, is expected to play a pivotal role in reviving the platform's faltering advertising revenue.
Details about the specific types of posts and users eligible for these advertising payments remain scarce. Yaccarino's hiring was seen as an effort to reassure advertisers who had abandoned the platform, while Musk has previously expressed his ambition to transform Twitter into an "everything app," drawing inspiration from China's WeChat, which combines social media, mobile payments, and more.
Musk's vision for Twitter goes beyond its current social platform status, as he envisions it becoming a multifunctional powerhouse. The potential influx of revenue from this new advertising model could serve as a catalyst for Twitter's transformation into what Musk refers to as "X" – an everything app that aims to become the world's largest financial institution.
It is worth noting that Musk's interest in expanding Twitter's scope predates his $44 billion acquisition of the company last year. He has long been fascinated by the concept of a super app, and he officially changed the corporation's name to X Corp earlier this year. This move mirrors similar transitions by tech giants like Google (Alphabet) and Facebook (Meta).
Since Musk's acquisition of Twitter, the platform has faced challenges, with over half of its top advertisers suspending their spending. This was partly due to a reduced staff that affected content moderation and a series of controversial policies. Musk has expressed a willingness to address advertisers' concerns while maintaining the importance of free speech. Despite a statement in April that Twitter was "breaking even" as advertisers returned, a New York Times report revealed a 59% decline in ad revenue compared to the previous year.
While Musk has announced an initial $5 million budget for the advertising initiative, the specifics of how payments will be structured and the potential earnings for creators from advertisers in their replies are yet to be revealed.
As of Saturday morning, Musk's estimated net worth stands at a staggering $226.4 billion, solidifying his position as the world's wealthiest individual. His recent surge in wealth can be attributed to the soaring shares of his electric vehicle company, which propelled him back to the top of the billionaire rankings, dethroning LVMH chairman Bernard Arnault.
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