Downsizing and Executive Overhaul... Advertising and Marketing Also Replaced (Comprehensive)

[Image source=Yonhap News]

[Asia Economy Reporter Yujin Cho] Elon Musk, CEO of Tesla who acquired Twitter, is driving changes at Twitter by going all-in on monetization. He has reduced the company's size through restructuring and significantly overhauled the senior executive team.

According to the Wall Street Journal (WSJ) and others on the 1st (local time), Musk plans to raise the subscription fee for the existing paid service 'Twitter Blue' from the current $4.99 to $8, and introduce a system where only members subscribed to this service will receive the account verification badge (blue tick).

On the same day, Musk tweeted, "We plan to charge $8 per month for the Twitter Blue service," adding, "Anyone who wants to get the account verification badge must pay." He said, "This will allow us to provide priority exposure in mentions and search results, and will also be effective in preventing spam and fraud." He also announced plans to reduce the amount of advertising exposure by half for paid subscribers.

Twitter Blue, launched last year in four countries including the U.S., offers additional services such as tweet undo, customized navigation, and the ability to upload long videos.

Musk initially considered raising the monthly subscription fee for Twitter Blue from $4.99 to as high as $19.99, about four times the current rate, but faced strong backlash due to the steep increase.

Responding to a tweet by author Stephen King criticizing the price hike, Musk said, "We have to pay the bills somehow. We can't rely entirely on advertisers forever," and asked, "How about $8 a month?"

Foreign media reported that this monetization overhaul will be the biggest change in Twitter's business since Musk's acquisition.

The reason Musk is going all-in on Twitter monetization is to break free from advertisers' influence. Currently, Twitter's main revenue source is tweet advertising from corporate accounts.

Twitter generated $5.1 billion in revenue last year, about 89% of which came from advertising services. Twitter's corporate value was estimated at $44 billion, but it currently lacks a significant revenue model outside of advertising.

There are 423,700 users with verified Twitter accounts, and if 10% of them subscribe to the $8 monthly paid service, Twitter could generate an additional annual revenue of $4.1 million (approximately 5.8 billion KRW).

However, the effectiveness of this monetization attempt is questionable. In a Twitter poll conducted by Musk's advisory investor Jason Calacanis, over 1.2 million respondents participated, with more than 80% saying they would not pay to get account verification, and among the rest, 10% said $5 per month would be appropriate.

When Musk first announced his intention to acquire Twitter in April, he said, "If I acquire Twitter, I will improve the product with new features and increase trust by making the algorithm open source," signaling major changes.

Last weekend, he also conducted a survey among Twitter users asking whether to revive 'Vine,' the short video service app that was shut down in 2016, hinting at the launch of numerous new products.

While Musk is driving changes after acquiring Twitter, concerns are growing about manpower shortages due to the departure of executives.

Sarah Personette, Twitter's Chief Customer Officer (CCO) in charge of advertising sales, announced her resignation via her Twitter account on the same day. Major foreign media reported that Leslie Berland, Chief Marketing Officer (CMO), Jay Sullivan, product executive, and Jean-Philippe Maheu, Vice President of Global Sales, also resigned.

Darlana Brand, head of HR and diversity, confirmed her resignation on social media platform LinkedIn, and Nick Caldwell, key technology manager, changed his online profile to "former Twitter executive."

Foreign media reported that it is not yet confirmed whether the senior executives' departures were voluntary or dismissals.

After completing the Twitter acquisition on the 27th, Musk dissolved the board of directors and consecutively fired key executives including CEO Parag Agrawal, CFO Ned Segal, and CLO Vijaya Gadde.

This content was produced with the assistance of AI translation services.