Twitter’s revenue and adjusted earnings in December decreased by approximately 40% compared to the same period last year.

Several large advertisers have ditched the microblogging site after Elon Musk’s takeover, according to people familiar with the matter.

In an update to investors, Twitter reported a decline of about 40% year-over-year in both revenue and adjusted earnings for the month.

After acquiring Twitter in October of last year, CEO Elon Musk is focused on stabilizing the company’s finances, which have been strained by costly debt. Twitter is responsible for repaying $13 billion in debt, incurred to finance the acquisition, and is expected to pay over $1 billion in interest annually.

The company recently made a first interest payment to a group of banks that lent the $13 billion, ESJ cited the people.

The world’s richest man tried to boost Twitter’s revenue by introducing subscription-based user verification last December, just two months after his acquisition.

Also Read: Experts Say Twitter’s 2FA Policy Change ‘Doesn’t Make Sense’

Twitter, a publicly traded company in December 2021, did not disclose its monthly financials. However, for the fourth quarter ending on December 31st, Twitter reported revenue of $1.57 billion and a net income of $182 million.

Elon Musk has previously said that he is expecting Twitter to break even in 2023. “Twitter still has challenges, but is now trending toward breakeven if we keep at it,” said Elon Musk in a tweet in February.

‘Twitter can’t protect you from trolls’

Twitter is no longer capable of protecting its users from trolling, state-coordinated disinformation, and child sexual exploitation following layoffs and changes, according to a BBC report.

Features intended to protect Twitter users from trolling and harassment are proving difficult to maintain amid what is described as a chaotic working environment, where Mr. Musk is shadowed by bodyguards at all times, according to the BBC, which cited current and former employees of Twitter.

According to the former head of content design, her entire team, responsible for creating safety measures such as nudge buttons, has been fired. She subsequently resigned from her position. Twitter’s internal research indicates that these safety measures previously decreased trolling by 60%.

An engineer currently employed at Twitter expressed concern that nobody is currently addressing this work, comparing the platform to a building that may appear unharmed from the outside but is burning internally.

Abuse on Twitter is getting worse

Abuse on Twitter has gotten worse, according to a BBC reporter who visited San Francisco, the home of Twitter.

“It turns out, I was right. A team from the International Center for Journalists and the University of Sheffield have been tracking the hate I receive, and their data revealed the abuse targeted at me on Twitter had more than tripled since Mr Musk took over, compared with the same period in the year before,” she wrote.

The employees are also facing challenges. An engineer said; “For someone inside, it’s like a building where all the pieces are on fire.”

At least half of Twitter’s workforce have been sacked or have chosen to leave since Musk bought the company. Now people from other teams are having to shift their focus, he said.

“A totally new person, without the expertise, is doing what used to be done by more than 20 people, that leaves room for much more risk, many more possibilities of things that can go wrong,” he said.

He believes this lack of trust is betrayed by the level of security Elon Musk surrounds himself with.

Twitter announced on Saturday that SMS-based (text-based) two-factor authentication (2FA) will only be available for Blue Tick subscribers. Hence, experts have criticized the microblogging site, arguing that if security is the main goal, why are verified users being excluded?

Text- or SMS-based 2FA requires the user to enter a code received via a text message after logging in with a username and password. 2FA is a security feature to protect the user account from unauthorized access.

Effective March 20, 2023, only Twitter Blue subscribers will be able to use text messages as their two-factor authentication method. Other accounts can use an authentication app or security key for 2FA. Learn more here:https://t.co/wnT9Vuwh5n

— Twitter Support (@TwitterSupport) February 18, 2023

However, with a recent change in its policy, only users with a Blue Tick subscription will have access to SMS-based 2FA, leaving other users to rely on other methods such as using an authentication app or a physical security key.

Experts were concerned that Twitter’s new policy would confuse users by giving them so little time to complete the transition and making SMS two-factor appear to be a premium feature.

“The Twitter blog is right to point out that two-factor authentication that uses text messages is frequently abused by bad actors. I agree that it is less secure than other 2FA methods,” said Lorrie Cranor, director of Carnegie Mellon’s usable privacy and security lab.

Twitter is halting phone-number based 2FA because the company has found that it is being used – and abused – by bad actors. Twitter, one of the most popular social media platforms, has made it clear that there will be no new enrollments for the “text message/SMS” method of 2FA unless the users are Twitter Blue subscribers.

“But if their motivation is security, wouldn’t they want to keep paid accounts secure too? It doesn’t make sense to allow the less secure method for paid accounts only,” said Cranor.

Twitter, three days ago: Turn off two-factor authentication or you will lose your account.
Twitter today: pic.twitter.com/ReasCuoDZA

— Dígame Concejal (@RSGAT) February 20, 2023

Due to the insecurity of SMS-based two-factor authentication, industry leaders like Apple and Google have halted the option for this type of authentication and transitioned users to other forms of authentication. Last year, Black Lives Matter activist DeRay McKesson’s Twitter account was hacked despite having two-factor authentication activated. McKesson shared later that the hacker convinced the telecom company to redirect the one-time password (OTP) to a different SIM card by impersonating him in a phone call.

This incident depicts the weakness of SMS-based 2FA and reinforces the need for users to adopt more secure forms of authentication to protect their accounts from cyberattacks.

Another controversial policy in Musk era

This change in policy is one more addition to the line-up of controversial decisions made by Twitter since the takeover by tech billionaire Elon Musk last year.

Twitter Blue, which is the only way to obtain the verification badge or ‘blue tick’, was introduced by Twitter in November 2022, one month after Musk purchased the company for $44 billion in October. This subscription-based service costs $11 per month for Android and iOS users, and $8 per month for desktop-only users.

That introduction of a subscription-based “Blue Tick” raised criticism and speculation over the authenticity of the verification badge.

“Let my Twitter Blue expire. It was not worth it. At least make it zero ads, Elon. Also, I tested changing my name twice and never got my blue verification back. Lots of work to do over there to get my $8,” tweeted Heidi Briones, a user.

‘Confusing Policy’

The experts are worried about the confusion that will be caused by this new Twitter policy, and the time given to complete the transition from text-based 2FA to another method is not very generous.

“On the surface, this sounds like a good degree of concern for users’ safety, but if you pay for Twitter Blue—and are, therefore, a customer who is serious about your Twitter usage and who Twitter should care about the most—you can continue to use that less secure method of authentication. Huh?” said Jim Fenton, an independent identity privacy and security consultant.

The company has not clarified what will happen if users do not disable SMS-based 2FA by the deadline of March 20. The experts were unable to find a logical connection between the reason and Twitter’s treatment of the new policy.

“And if you aren’t a Twitter Blue subscriber, and they downgrade you to just password-based authentication, now they’ve fully taken something that’s purported to improve users’ security and done exactly the opposite,” said Fenton.

Fenton stated that Twitter’s message would imply that they are replacing the existing authentication method with a new one that doesn’t require a hardware security key. Nevertheless, the exemption for Twitter Blue would remain nonsensical.

Meta Verified, a subscription service that lets users add a blue checkmark to their Facebook and Instagram accounts, has been launched by Meta. Following social media rival Twitter, Meta CEO Mark Zuckerberg declared a monthly subscription will be available to those who wish to verify their identity.

Meta is planning to launch the feature in Australia and New Zealand this week before hitting the global market. It’s priced at $11.99 a month on the web or $14.99 on Apple’s iOS, but it’s unclear whether Android users can purchase it or not.

Also read: Metaverse is Rebirth of the Internet, Says Meta’s Clegg

#Twitter & @elonmusk Start the #Verified by Payment model @Meta follows #MetaVerified

Is the ad led business model broken for social platforms ?

— Pranav Bakshi (@pranavbakshi) February 20, 2023

The company has announced that users can authenticate their identities using government-issued ID cards, which will provide a range of benefits. These include enhanced visibility and expanded reach, better protection against impersonation attacks, and immediate access to customer support.

“This new feature is about increasing authenticity and security across our services,” said Zuckerberg in a post.

‘Customer support feature is real value’

Currently, reaching customer service on Facebook can be quite challenging. Users are directed to the Help Centre, then to the Business Help Centre, but it can be tricky to connect with an agent.

As such, some users are likely to appreciate the ability to gain direct access to customer support.

“Direct access to customer support is the real value, much more so than the blue check mark,” said Michelle R. Gould in a comment on Zuckerberg’s post.

In response, Zuckerberg agreed “that’s a big part of the value.” Users with Meta Verified accounts will be able to effectively remove fake accounts, according to the CEO.

“…once you’ve verified your account with a government ID we can more effectively find and remove any imposter accounts since we know which account is the real you,” Zuckerberg replied.

However, concerns have been raised about whether “access to customer support should be free.”

A new channel for revenue

Subscription-based account verification was introduced by Twitter in November, after Elon Musk purchased the company. Musk said the move was “essential to defeat spam/scam.”

Although some have accused Zuckerberg of simply copying Twitter with Meta Verified, the company has explained that it is “evolving the meaning of the verified badge.”

“Long term, we want to build a subscription offering that’s valuable to everyone, including creators, businesses, and our community at large. As part of this vision, we are evolving the meaning of the verified badge so we can expand access to verification and more people can trust the accounts they interact with are authentic,” wrote Meta in a blog post.

There will be no changes to accounts on Instagram and Facebook that are already verified based on prior requirements, including authenticity and notability, said Meta.

You all criticized him but if meta is following Musk, he has got some great influence. With Facebook/Insta, everyone else will follow this soon as well. pic.twitter.com/QNGdN5YTwe

— Ghosty (@ak_niaazi) February 20, 2023

The company has explained that businesses are not eligible to apply for Meta Verified at this time, though Zuckerberg’s comments about building a subscription service that’s “valuable to everyone” suggests it may not be far away.