The ad revenue of YouTube, Snap, Meta and TikTok could increase following the Elon Musk Twitter takeover, CNBC has reported.

In a note to investors, researchers from several Wall Street firms agreed that the Musk Twitter takeover may be a boon to the ad revenue of the rival companies.

At this stage of the process, Musk’s vision for Twitter moving forward could take the company in two separate directions, potentially pulling revenue away from the social media giant.

Twitter has heavily relied on advertising since its inception in 2006, with ads accounting for £1.12 billion in the most recent quarter of 2022.

Musk, who has become one of Twitter’s most controversial users, has been making a strong argument for more free speech and its importance on the platform.

This move could mean less content moderation, meaning brands, who don’t want their adverts associated with misinformation or hate speech, could take their money elsewhere, JMP analysts said in their note.

Additionally, Musk’s interest in the privatisation of the platform, and vocal preference for a subscription model, could cause even more alarm for marketers and shift their spending to other platforms.

Commenting on the news, JMP analysts wrote: “With ~85% of Twitter’s revenue generated through brand advertising and as free speech is a priority for Mr. Musk, advertisers may shift budgets to other channels given brand safety concerns.”

The decision to turn the company into a subscription model could have a knock-on effect for advertisers, as it would reduce the need for ads on the platform.

In a now deleted Tweet, Musk commented: “Everyone who signs up for Twitter Blue (i.e. pays $3/month) should get an authentication checkmark.”

He added: “And no ads. The power of corporations to dictate policy is greatly enhanced if Twitter depends on advertising money to survive.”

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In the note, analysts said that this move had the potential to benefit smaller players like Pinterest and Snap.

Twitter accepted Elon Musk’s deal to buy the company outright for around $43 billion in cash earlier this week.

Musk’s move comes on the back of reports that the Twitter board met with him to discuss his deal to take over the social media platform.

Anonymous sources cited by Reuters and the New York Times said that Twitter’s board has been considering the deal, which would see Musk pay around $54.20 per share in cash, for a total of $43 billion, to buyout the other shareholders.

Previously, the Twitter board had taken measures to block purchase, inserting a ‘poison pill’ strategy to discourage shareholders.

However, Twitter re-examined the offer, based on shareholder support and Musk receiving financing for the deal.

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