Elon Musk bought Twitter for $44 billion. And by the looks of it, the world’s richest man’s financial goals for the social network are ambitious.
Musk’s plans for the future of Twitter were disclosed through a document obtained by the US newspaper “The New York Times” last Friday (6). In a presentation made by the billionaire to investors, he promises to add 931 million users by 2028, and that Twitter’s revenue will quintuple in that same period.
Musk is known in the business world for his audacious dreams. The long journey the Tesla brand took to its current popular electric cars could have been seen as impossible a few years ago. Investing in an aerospace rocket company like SpaceX has also proved to be a bold goal, which has even successfully transported astronauts to the International Space Station (ISS).
But right here on Earth, by the way, Musk’s focus these days is taking Twitter to another level. Despite recent controversies involving freedom of expression proposed by Musk for the social network, the company’s source of revenue is also a matter of concern for the businessman.
To convince investors of his dreamed-up model of “making Twitter more fun” and, apparently, more profitable as well, Musk presented an action plan for the next six years. Layoffs and hires are also mentioned in the presentation.
Musk’s goal is that, in the next six years, Twitter’s income will quintuple. That is, from the US$ 5 billion registered last year, according to a report by the social network, to a total of US$ 26.4 billion in 2028.
In the document is the forecast of the increase in Twitter’s average revenue per user. It would go from $24.83 — in the 2020 report — to $30.22 by 2028. In total, an increase of $5.39.
Rest assured that this is a metric commonly used by social networks. It measures the amount of money a company expects to add to an individual customer—and doesn’t necessarily incur costs for the average user.
Explosion of users: 931 million by 2028
Investing in Twitter Blue can be a way to attract more users to Twitter. The experience allows the user to customize their activities on the social network for a value of US$ 3 per month. And Musk predicts the service will amass 159 million people by 2028.
This should directly affect the total numbers of Twitter profiles. Currently, the platform has 217 million users, according to the report released last year. The goal is to add 600 million by 2025 and reach 931 million by 2028.
Layoffs and hires
The permanence of the current Twitter team was still in the gray area, but Musk’s plans became clearer after the disclosure of the document presented to shareholders.
Apparently, the number of employees will fluctuate over the next six years, possibly due to layoffs and hiring of new talent. But the total sum is still greater than the current one.
- Current staff: 7,500 people;
- Target for 2022: 9,225 employees;
- Plans for 2023: 8,332 employees;
- Plans for 2025: 11,072 employees;
Twitter vs Advertising
In 2020, it was reported that 90% of Twitter’s revenue comes from advertising. Musk expects that number to be reduced to less than half. In other words, advertising takes up only 45% of total revenue.
The forecast for 2028 is that $12 billion in advertising revenue will be generated. Subscriptions are expected to add up to nearly $10 billion in revenue.
$15 million in payments business
Currently, payments on Twitter are limited to purchases and tips given to influencer profiles, representing a small portion of the social network’s revenue. Musk expects to grow this branch and generate $15 million in payouts in 2023.
It has not yet been disclosed how this will be possible, nor Musk’s plans for some kind of new service on the social network. But for 2028, the goal in this area is more daring: to grow to around US$ 1.3 billion.
It is worth remembering that Musk already has plenty of experience in this area. The entrepreneur is the founder of the popular digital financial transaction service PayPal.
Mysterious Project X
A new product, just called “X”, wasn’t even born right, but it already has a goal of adding 104 million subscribers by 2028. Although it’s still a mystery, the project could be aimed at an ad-free experience on Twitter.
In the document, the product is scheduled to come out in 2023 and already expects to collect 9 million members this same year. Would it be something along the lines of YouTube Premium? It remains to wait for more news.
$9.4 billion free cash flow by 2028
Know that $13 billion will be added by Twitter in debt as part of the Musk purchase deal. And the entrepreneur’s idea is to pay that amount with free cash flow. To better understand, this is a company’s maneuver money after all payments have been made.
And to maintain a larger margin, Musk intends to increase that cash to $3.2 billion in 2025. By 2028, he expects it to reach $9.4 billion, regardless of the volume of operating expenses.