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May 4, 2022 12:10 am

Twitter Admits To Risk of Losing Advertisers, Staff Due To Musk Takeover

An anonymous reader quotes a report from TechCrunch: Just ahead of its presentation to media ad buyers later this week at the 2022 NewFronts, Twitter acknowledged in a new SEC filing that its core advertising business could now be at risk as a result of the Elon Musk takeover, in addition to employee hiring and retention efforts and other factors. While Musk's vision for Twitter is one of a more free speech-focused platform, he hasn't offered assurances to Twitter's advertiser base that Twitter will remain "brand safe," post-acquisition. To the extent that he's clarified his vision, Musk said only that he believes any speech not deemed illegal by a government will soon be permitted on Twitter. Of course, Twitter today already moderates a wide range of prohibited types of content beyond what's considered illegal. [...] They may just decide that reaching Twitter's small-ish user base -- at least in comparison with the larger social giants like Meta and TikTok -- is not worth the risk. [...] Among the many new risks related to the transactional nature of the Musk deal -- like if the merger is delayed or doesn't close (the latter which comes with a billion-dollar financial hit to Twitter, for instance) -- the company said it's exposed to new risks related to its "business relationships, financial condition, operating results, cash flows, and business," including "whether advertisers continue their spending on our platform." As the company explains further in the filing, amid its ongoing risk factors, it continues to generate the "substantial majority of our revenue from advertising" and its loss could harm the business. It notes as well that if its reputation among advertisers declined, it may be less competitive. [T]he company also acknowledged a more immediate threat of employee departures and an inability to effectively recruit as other potential ramifications of the merge, and noted that "current employees could be distracted, and their productivity decline as a result, due to uncertainty regarding the merger." Musk downplayed any worries over employee departures when speaking to reporters on the red carpet at the annual Met Gala in New York, Reuters noted, saying that "it's a free country," and that: "Certainly if anyone doesn't feel comfortable with that, they will on their own accord go somewhere else. That's fine."

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