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How Will Social Media Adapt to the Advertising Squeeze? - Seite 2

Twitter (NASDAQ: TWTR), which was cofounded by Jack Dorsey, provides online social networking and microblogging service, offering users the ability to follow other users' activity, read and post tweets. It might be one of the planet’s major players when it comes to social media, but the business has had a rocky ride over recent months.

The company’s second quarter earnings saw average monetizable daily active usage rise by 16.6% on the same period in 2021. Even so, revenue dropped from $1.19bn to $1.18bn amid advertising headwinds.

However, the company also blamed the drop on instability associated with Elon Musk’s $44bn takeover bid.

In fact, Twitter is now suing the enigmatic South African billionaire in an effort to force him to follow through on the accepted bid.

Legal wrangling could hurt the business further, but Twitter is unlikely to let the matter drop as Musk’s bid, which equated to $54.20 per share, represents a premium on the current share value.

These difficulties may have contributed to the decision to increase the Twitter Blue service’s monthly price, which is climbing from $2.99 to $4.99 for new subscribers.

However, subscription and other revenue decreased in the company’s most recent quarter, falling by 27% to $101m. This decline, coupled with the miniscule contribution from subscription revenue compared to ad revenue, calls into question the company’s capacity to deal with slowing ad revenues.

With advertising revenue likely to dip, other industry peers also seem to be on the lookout for new or enhanced revenue streams.

Snap (NYSE: SNAP) is one company trying out the subscription model for size. The business provides technology and social media services, developing mobile camera application products and services that allow users to send and receive photos, drawings, text and videos.

The company, which runs the Snapchat platform, has changed its executive team amid advertising troubles but is having some success with new monetization efforts. The business is offering users a ‘premium’ service in the form of Snapchat+, available for $3.99 a month.

It has seen some success, with Snap confirming that it had brought in more than 1 million subscribers less than six weeks after launch.