Elon Musk thinks he can fix Twitter’s advertising business after derailing it

By Catherine Thorbecke, CNN

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

In remarks at a Morgan Stanley Conference, Musk laid out his vision to boost 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.

“The advertising relevance is the most gigantic thing,” Musk said. “And this is going to sound totally bizarre, but Twitter did not consider relevance in advertising until three months ago.”

With that change, and larger cost cuts across the organization, Musk said he believes Twitter has “got a shot at being cash flow positive next quarter.”

“Going forward, Twitter will have very relevant, useful advertising,” Musk said. “And because it is useful, because it is relevant, there will be a massive increase in revenue, because it is now useful. 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 suffered a mass exodus of top brands as Musk relaxed some content moderation policies, restored incendiary accounts and made a number of erratic remarks concerning politics and world affairs. Musk, who has previously tweeted about his hatred for advertising, made a quick bet on bolstering a paid subscription offering instead, but it has reportedly struggled to gain traction.

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

But even as Musk looks to grow Twitter’s ad business, which has long made up nearly all of the company’s revenue, there are sincere doubts about whether the platform can even stay online.

Twitter has been inundated with outages, including a significant service disruption 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 “overly complex” underlying technology for some of the recent service disruptions.

“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 quite difficult to keep this thing running, and then also difficult to advance the product because it is really overly complex, to say the least.”

“We’ll 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 the Twitter user base [that] ended up being a catastrophic change to 100% of the Twitter user base.”

At the same time, Musk continues to make controversial remarks that may give brands pause about returning to, or increasing their spending on, the platform. Musk was criticized by some this week after he publicly mocked a Twitter worker with a disability who asked the Twitter owner whether he had been laid off.

At Tuesday’s event, Musk went on a series of unrelated tangents, including repeatedly taking aim at legacy media organizations. “What I’d say to advertisers and brands is, you know, use Twitter yourself and believe what you see on Twitter, not what you read in the newspapers,” Musk said. “Because what you see on Twitter is the real thing, and what you read in newspapers is not.”

The-CNN-Wire
™ & © 2023 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.