Elon Musk thinks he can fix Twitter’s ad business after derailing it | CNN Business
Elon Musk on Tuesday offered an upbeat picture of how Twitter can improve the advertising business that helped derail and boost its bottom line, while admitting that keeping the social network afloat is proving to be a challenge after several rounds of layoffs
Speaking at a Morgan Stanley conference, Musk laid out his vision for boosting Twitter’s core advertising business by adopting the standard strategy of most of the company’s peers: improving the relevance of the ads it serves.
“Advertising relevance is the biggest thing,” Musk said. “And this is going to sound totally weird, but Twitter didn’t consider relevance in advertising until three months ago.”
With that change and larger cost cuts across the organization, Musk said he believes Twitter “has had the ability to be cash flow positive next quarter.”
“In the future, Twitter will have very relevant and useful advertising,” Musk said. “And because it’s useful, because it’s relevant, there’s going to be a massive increase in revenue, because it’s useful now. So I’m very optimistic about the future. It’s been a very difficult four months, but I’m optimistic about the future.”
Since taking over the platform in late October, Twitter has seen a mass exodus of top brands as Musk relaxed some content moderation policies, restored incendiary accounts and made a series of erratic comments on politics and world affairs. Musk, who has previously tweeted about his hatred of advertising, was quick to push for a paid subscription offering, but has reportedly struggled to gain traction.
He also took the time to thank advertisers who have stuck with Twitter during his takeover, including Disney and Apple.
But even as Musk looks to grow Twitter’s ad business, which has long accounted for nearly all of the company’s revenue, there are genuine doubts about whether the platform can stay afloat.
Twitter has been inundated with outages, including a significant service outage on Monday, and other user headaches since Musk took over, likely linked to the multiple rounds of mass layoffs that occurred under his watch. On Tuesday, he blamed the “overcomplexity” of the underlying technology for some of the recent service outages.
“The code base is like a Rube Goldberg machine, and when you zoom in on one part of the Rube Goldberg machine, there’s another Rube Goldberg machine, and then there’s another one,” Musk said at the event on Tuesday. “So it’s pretty hard to keep this thing running, and then it’s also hard to move the product forward because it’s really too complex, to say the least.”
“We’re going to make a change, what appears to be a small change somewhere, that then causes a massive disruption,” he said. Musk said Monday’s outage was the result of “what was supposed to be a small change to 1% of Twitter’s user base.” [that] ended up being a catastrophic shift in 100% of Twitter’s user base.”
At the same time, Musk continues to make controversial comments that may give brands pause to return to the platform or increase spending on it. Musk was criticized by some this week after he publicly brushed off a disabled Twitter worker who asked the Twitter owner if he had been fired.
At Tuesday’s event, Musk went off on a series of unrelated tangents, including repeatedly taking aim at legacy media organizations. “What I would say to advertisers and brands is use Twitter yourself and believe what you see on Twitter, not what you read in the papers,” Musk said. “Because what you see on Twitter is real, and what you read in the papers is not.”