While Elon Musk has continuously reiterated that his purchase of Twitter is about securing freedom of speech, and that recouping the $44 billion he paid for the company doesn’t matter, he still has bills to pay, and investors to make whole as he goes about reforming the business.

Which is why the latest reports on Twitter’s ad sales are important, with the New York Times reporting that Twitter’s U.S. ad sales are down 59% year-over-year, reflecting worsening ad sales at the company over time, despite Musk’s assurances that advertisers had been steadily coming back to the platform.

According to the Times, Twitter recently shared an internal overview of its ad sales performance, which showed that total ad sales are down 59%, while the company is regularly falling short of its U.S. weekly sales projections. That’s worse than the 50% decline that Musk confirmed back in March, which suggests that businesses are still spooked by Musk’s reformations at the app, which have included new rules around acceptable speech, and reinstatements of some of the platform’s most controversial users.

And Musk himself hasn’t helped its case. He continues to share his often controversial opinions on hot-button topics, including gender affirmation, the war in Ukraine, the government’s COVID response, population collapse, crime, immigration, and more.

Which, of course, was the whole point of his Twitter takeover in the first place. Musk says that he bought Twitter to fight for free speech, and battle against mass media censorship, and that, in some ways, is a noble stance. But the side effect is that Twitter’s ad revenue is going to take a hit as a result.

And when that income stream makes up some 90% of your company’s revenue, that is a challenging path to take.

Musk’s most recent stance on this front saw two of his top brand safety experts move on from the company, after Musk sought to reverse their decision on supporting the release of a controversial anti-trans documentary. Musk demanded that the rules around such be watered down, while also promoting the documentary on his own profile, which led to both Ella Irwin, the platform’s head of trust and safety, and AJ Brown, Twitter’s chief of brand safety, leaving the company as a result.    

That’s led to yet another new swell of concern among ad partners, given that Twitter’s brand safety team has now been further weakened, and bent to Musk’s ideological will, which could see Twitter’s ad revenue decline even further in the coming months.

Musk, of course, has also been seeking to augment Twitter’s income streams by adding in new elements, primarily via subscriptions, both to Twitter itself and to individual creators in the app. Musk had been hoping that subscriptions to Twitter Blue would eventually make up 50% of Twitter’s revenue intake, but thus far, despite Musk removing legacy verified ticks, and forcing advertisers to pay for Blue to keep running ads, Twitter Blue take-up has remained at less than 0.3% of Twitter’s total user base, equivalent to around $16.8 million per quarter.

That’s a tiny fraction of the $1.18 billion in revenue that Twitter brought in in Q2 2022, the company’s last revenue update before Musk took over at the app.

Even if that total revenue number has declined by half now, Twitter Blue income is still only a fractional element in Twitter’s broader revenue pie, while price increases to Twitter’s API also appear to have had negative impacts on usage.

Essentially, as it stands right now, despite Musk’s efforts, Twitter still needs a lot of ad dollars to keep running, or it’ll run the risk of going out of business - even with 80% fewer staff to pay. This is the situation that incoming Twitter CEO Linda Yaccarino will inherit when she takes the reigns at the app shortly, with Yaccarino also bringing over other former NBCU ad execs to help her re-build Twitter’s ad business, and win back advertiser trust.

It’ll be a tall order — especially as Musk continues to publicly advocate for controversial approaches to certain topics. But Yaccarino has a lot of experience in building such a business, so long as she’s able to push back on Musk’s various whims, and ensure that he doesn’t continue to spook already wary brand partners.

That maybe an impossible task, given Musk’s stated ambitions for the app.

Again, on one hand, adhering to his vision of free speech, despite the potential, personal losses that he may incur for such is admirable. On the other, this stance could continue Twitter’s downward spiral, even with the best efforts of top ad execs on its side.