Morgan Stanley Conference: Musk thinks he can fix Twitter’s ad business after derailing it


Elon Musk presented an optimistic picture on Tuesday of how Twitter can improve the advertising business it helped derail and boost its bottom line, while admitting that keeping the social network running is proving to be a challenge. after several rounds of layoffs.

Speaking at a Morgan Stanley conference, Musk outlined his vision for boosting Twitter’s core advertising business by adopting the standard strategy of most company peers: improving the relevance of the ads it serves. diffuse.

“Advertising relevance is the gigantic thing,” Musk said. “And this is going to sound totally weird, but Twitter only considered ad relevance three months ago.”

With this change and deeper cost reductions across the organization, Musk said he believes Twitter has “a chance to be cash flow positive next quarter.”

“Going forward, Twitter will deliver highly relevant and helpful ads,” Musk said. “And because it’s useful, because it’s relevant, there will be a massive increase in revenue, because it’s now useful. So I’m very optimistic about the future. These four months have been very difficult, but I am optimistic for the future.

Since taking over the platform in late October, Twitter has suffered a mass exodus of big brands as Musk has relaxed some content moderation policies, restored inflammatory accounts and made a number of erratic remarks regarding politics and world affairs. Musk, who has previously tweeted about his hatred for advertising, made a quick bet on bolstering a paid subscription offer instead, but reportedly struggled to gain traction.

He also took the time to thank advertisers who stuck with Twitter throughout its rocky takeover, including Disney and Apple.

But even as Musk seeks to grow Twitter’s advertising business, which has long accounted for nearly all of the company’s revenue, there are genuine doubts about whether the platform can even stay online.

Twitter has been awash with outages, including a major service outage on Monday, and other user headaches since Musk took over, likely related to multiple rounds of mass layoffs under his leadership. On Tuesday, he blamed “overly complex” underlying technology for some of the recent service outages.

“The codebase 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 another,” Musk said at the event on Tuesday. “So it’s quite difficult to get this thing to work, and also difficult to advance the product because it’s just so much too complex, to say the least.”

“We are going to make a change, which seems like a small change somewhere, which then causes massive disruption,” he said. Musk said Monday’s outage was the result of “what was supposed to be a small 1% change in Twitter’s user base (which) ended up being a catastrophic 100% change in the user base. Twitter users”.

At the same time, Musk continues to make controversial remarks that could tempt brands to come back or increase their spending on the platform. Musk came under fire from some this week after publicly mocking a disabled Twitter employee who asked the Twitter owner if he had been fired.

At Tuesday’s event, Musk took a series of unrelated tangents, including repeatedly taking aim at legacy media organizations. “What I would say to advertisers and brands is, you know, 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 reality, and what you read in the papers is not.”

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