Elon Musk Counts Disney, Apple Among Twitter Advertisers, Sees HBO Opportunity
Elon Musk says Twitter “has a shot” at being cashflow positive next quarter, even as the social media network contends with site breakages and reports of advertisers leaving the platform.
In an interview at a Morgan Stanley investor conference Tuesday, the billionaire, who took over as Twitter CEO in October 2022, after acquiring the company for $44 billion, talked about Twitter’s admittedly bumpy trajectory in the past several months, as well as his ultimate plans for the social media network.
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“The reason I did the Twitter acquisition was not because I thought this would be some lucrative goldmine. In fact, it has been arduous and difficult and being dumped on every day, well that’s not the most fun thing in the world. But if we do not have a strong foundation of free speech, I fear for the future of our civilization,” Musk said.
(Morgan Stanley advised Musk on the acquisition and also contributed about $13 billion of debt financing.)
One of the difficulties has come as advertisers have reportedly left the site in droves after bot attacks and fears of a higher level of hate speech on the platform, after Musk had promoted the idea of free speech for all. Musk has since been seeking to reassure advertisers about the platform.
At the conference, Musk highlighted Disney and Apple as remaining advertisers on the site, and said that the team is focused on brand safety, but added that brand safety depends on the company (whether it’s family-friendly or not) and their ability to choose what kind of content they want to put their advertising next to.
“It’s really up to the advertiser where they want to put their content. But I think by far the most important thing is that the advertising is effective, that it is relevant and that it moves the needle for a company,” he said.
To that end, Musk said Twitter will be more focused on relevance in advertising. He wants to lean more into performance advertising and recently spoke with Warner Bros. Discovery CEO David Zaslav about the ability to show HBO’s White Lotus trailers, for example, every time the phrase “White Lotus” is tweeted.
As it stands, Musk called Twitter “poorly monetized,” given the amount of attention it commands. The company is also saddled with a large amount of debt, given the debt involved in Musk’s acquisition of the company, as well as its financial situation before Musk took the company private (in its last report as a public company, Twitter reported a net loss of $270 million). Still, Musk said he believes there will be “a massive increase in revenue” as advertising becomes more relevant and useful.
“It’s been a very difficult four months, but I’m optimistic about the future,” he said.
On the further difficulty front, Musk acknowledged site outages, including the most recent error on Monday, which disrupted the ability of users to send links and see photos on the platform. He called Twitter’s code “a Rube Goldberg” machine.
“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, and we’ll make a change, what appears to be a small change somewhere that then causes a massive disruption,” he said.
Twitter has also reportedly laid off a substantial portion of its workforce, according to the New York Times, bringing the number of employees to less than 2,000 from the 7,500 there when Musk joined. Musk did not directly address the layoffs, but said he believes it will take a few years to make Twitter’s management team look like his team at Tesla. (He called Twitter “an easier problem than Tesla by a long shot.”)
Musk has also said he ultimately plans to use Twitter to build a social platform called “X.com,” in which users can send money to one another and earn interest on the money. “Basically I think it is possible to become the biggest financial institution in the world,” he said.