Elon Musk's Twitter account bio next to the Twitter logo
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Twitter's Wall Street breakup

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Good morning! Elon Musk’s big plans for Twitter have been light on details, but the Tesla CEO wants to move away from an ad-based business model — and Jack Dorsey is in full support. But the math for a Twitter subscription just doesn’t add up. I’m Janko Roettgers, and I’m looking forward to building my own Pong game this upcoming weekend. Wish me luck with the soldering!

The plan for an ad-free Twitter

We don’t know much yet about Twitter’s future after Elon Musk takes control of the company — heck, we can’t even be sure that the deal will get regulatory approval — but we do know two things: Musk wants to double down on free speech, and he wants to reduce the company’s reliance on advertising. A closer look at Twitter’s financials reveals that the latter is a tall order, and any attempt to do so could actually make things worse for the company.

Twitter currently generates the vast majority of its revenue with ads, with a small sliver coming from data licensing deals as well as direct-to-consumer subscriptions. In Q4 2021, advertising made up roughly 90% of the company’s overall revenue.

And then there’s Twitter Blue, which, third-party data suggests, hasn’t exactly been a home run. Twitter has generated a total of $2.5 million with iOS in-app purchases worldwide to date, according to estimates that app analytics specialist Sensor Tower shared with Protocol.

  • These revenues include both Twitter Blue subscription fees as well as fees generated with Super Follows. (The total amount of Twitter Blue revenue is likely higher, as people can also subscribe on the web, as well as via the company’s Android app.)
  • Twitter didn’t break out how much of the rest came from its nascent Twitter Blue subscription service, but the company admitted that it’s not a whole lot. “While very small as a percent of revenue today, we believe Twitter Blue and other subscription-related revenue represents a significant opportunity for Twitter over time,” it wrote in its Q4 2021 shareholder letter.

Twitter Blue’s value proposition is a bit murky is one reason for these lackluster results. A $3 per month subscription plan gets users access to advanced features and ad-free articles from a number of third-party websites, but it doesn’t actually remove ads from their Twitter feeds.

  • In a series of recent, since-deleted tweets, Musk suggested that he wants to revamp the company’s subscription program.
  • Among his ideas: lowering the price to $2 a month, giving every paying subscriber a blue checkmark and removing ads from their feeds. “The power of corporations to dictate policy is greatly enhanced if Twitter depends on advertising money to survive,” Musk wrote.

But under this plan, Twitter would actually make less money per user than it currently does. The company doesn’t break out ARPU in its quarterly results, but a bit of back-of-the-envelope math suggests that the average ad revenue for each of the company’s 217 million monetizable daily active users was around $6.50 in Q4 2021, which comes to $2.17 per month.

  • There’s something to be said about using daily user metrics in this context, but high-propensity users are more likely to pay. Plus, again, this is merely a back-of-the-envelope calculation.
  • Still, pretty close, right? Well, not exactly. Ad revenues vary widely by location, with Twitter generating 56% of its ad revenue in the United States in its most recent quarter, despite the fact that the U.S. is only home to 17.5% of its daily active users. In absolute numbers, U.S. Twitter users generated about $6.90 per month in ad revenue for the company.

There are a ton of challenges, of course. The number of people willing to pay $7 or more per month for Twitter may be a lot lower than the number of people open to paying $2 per month.

  • And if Musk somehow manages to convince a significant chunk of Twitter’s power users to sign up for paid subscriptions, he’s also removing advertisers’ ability to target the service’s most valuable audience, potentially driving down ad rates across the service.

The flip side to all of this is that Twitter may not have a choice, thanks to Musk’s plan to turn Twitter once again into the “digital town square” where free speech rules supreme. In 2020, a number of major advertisers halted ad buys on Instagram, Facebook and Twitter over their role in spreading hate and disinformation. Twitter responded by expanding its hate speech rules, and more than doubling the number of accounts it took action against. If the company were to roll back any of these measures, it might also become a place that’s a lot less welcoming to advertisers. According to Jack Dorsey, who said Monday he fully supports Musk’s takeover, that’s a good thing: “Twitter as a company has always been my sole issue and my biggest regret,” Dorsey tweeted. “It has been owned by Wall Street and the ad model. Taking it back from Wall Street is the correct first step.”

— Janko Roettgers (twitter)


The speed at which security has been built up over the last 12 months has been a derivative benefit of what we’ve seen during the pandemic. Privacy, compliance and security are three legs of the same stool. What we’re seeing increasingly is that intersection continuing to happen. RingCentral has invested in all those elements.

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People are talking

Good luck keeping a permanent Twitter ban on Donald Trump, Rep. Ro Khanna said:

  • “I just don’t think you can keep a Republican leading contender off a platform unless there’s, again, repeated bad action.”

David Zaslav said Warner Bros. Discovery will move fast, especially after the CNN+ fallout:

  • “We will clearly take swift and decisive actions on certain items, as you saw on CNN+ last week.”

Standard Chartered's Bill Winters doesn't think fossil fuel production can end so abruptly:

  • "First of all, it’s not going to happen and secondly, it would be very disruptive.”

Making moves

Wipro is buying Rizing, an SAP consulting firm, for $540 million.

Goldman Sachs bought a stake in iSpot.tv, which helps ad agencies understand how their video ads performed, for $325 million.

Murika Matz is Visier’s new SVP and Chief Customer Officer. She last worked in customer success at Cornerstone OnDemand.

Rich Cho and Shella Neba joined Gem as chief recruiting officer and chief counsel, respectively. Cho comes from Robinhood, and Neba’s from Slack.

Meghan Hillery and Rajinder Singh joined CoVenture as head of business development and as a credit associate, respectively. Hillery’s from Capital One, and Singh’s from Guggenheim Partners.

Becky Center is Indiegogo’s new CEO. Center previously worked at Healthjoy and Groupon.

In other news

Elon Musk will owe Twitter $1 billion if his funding doesn’t come through, according to an SEC filing. The deal is currently set to close by late October.

He's also not allowed to talk smack about Twitter. Musk can't post tweets about his new deal if they "disparage the company or any of its representatives," according to an SEC filing, although it's unclear what would happen if he did anyway.

It's time to run ads on YouTube Shorts. The platform is testing ads on its short-form video feature after Google missed expectations on its earnings report, largely because of slow growth at YouTube.

Robinhood is laying off 9% of its full-time employees. Its CEO said the company’s period of fast growth caused some “duplicate roles and job functions.”

The U.S. has its first crypto mining city. It’s Fort Worth, Texas, and three mining rigs will run out of its city hall 24/7.

No one wants your new streaming service. People are getting more selective of their preferred streaming providers, according to a new study.

Companies are contributing to a career portal for neurodivergent job seekers called the Neurodiversity Career Connector. Google, Dell and others are involved.

TD bank is on a tech hiring spree in Florida. It’s trying to hire 200 tech workers in Fort Lauderdale over the next couple years.

The real story behind ‘Ta Da!’

It's been a minute since we all heard one of Microsoft’s old startup jingles. But they certainly stuck with people, and there’s a reason for that. The podcast Twenty Thousand Hertz is releasing a new episode that looks into those sounds.

It’ll release “Ta Da! It’s Windows” today as part of a two-part series that explores the history of Windows startup sounds and why Microsoft eventually tossed the sounds. The second episode will drop May 11. Have fun with those tunes stuck in your head for the next 24 hours!


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Thoughts, questions, tips? Send them to sourcecode@protocol.com, or our tips line, tips@protocol.com. Enjoy your day, see you tomorrow.

Correction: An earlier version of this story misppelled Murika Matz's name. This story was updated on April 27, 2022.

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