Elon Musk, who bought Twitter just over four months ago in a $44 billion debt-laden deal, said ad revenues have fallen by as much as 50% since he took over.
But the mega-billionaire tech mogul said a few big advertisers have continued to splurge on Twitter, and he specifically singled out — and thanked — Disney and Apple as the remaining two of the social network’s biggest marketers, speaking at the Morgan on Tuesday. Stanley 2023 Technology, Media and Telecoms Conference in San Francisco.
According to Musk, Twitter is improving its ability to serve timely and relevant ads. He said he recently spoke with David Zaslav, CEO of Warner Bros. Discovery, who asked Musk why Twitter couldn’t run an ad featuring the trailer for the HBO hit show “The White Lotus” next to every tweet that said “White Lotus. Musk responded in the affirmative, describing it as simple keyword-based ad purchases that Twitter is now selling: “It’s just Google AdWords applied to tweets.”
Musk painted a bleak picture of Twitter’s finances. He said that with the drop in ad revenue and the additional debt payments Twitter must make (on the roughly $12.5 billion in debt Musk needed to complete the transaction), the company was on track to be within four months to go bankrupt. The situation required “immediate and drastic action,” Musk said.
In addition to cutting Twitter’s workforce by more than 70% from 7,500 to less than 2,000, the company has consolidated into two data centers (instead of three) to reduce cloud spending. All told, Twitter has reduced its annual burn rate (excluding $1.5 billion in debt payments) to about $1.5 billion, compared to $4.5 billion previously, while also achieving “the fastest product evolution in Twitter history.” went through, Musk said.
“There have been a few bumps in the road, but this is to be expected,” Musk said. “Now we have the opportunity to grow [Twitter] into something spectacular.” He added, “I don’t want to spoil it or anything, but I think we have a shot at being cash flow positive in the second quarter.”
Musk said Twitter has a lot of room to improve the way it monetizes time spent on the platform. Every day, Twitter generates 130 million hours of attention from “the smartest people on the planet,” he claimed; however, currently the company only earns 5-6 cents in ad revenue per hour of that time.
Musk said his goal for Twitter is to be the most timely and accurate source of truth available, “no matter how unpleasant it may be”. A self-described “freedom of speech absolutist” — who has reinstated the accounts of many accounts previously banned by Twitter for violating its policies, including those of Donald Trump — Musk reiterated that he sees Twitter as an important tool to promote freedom of expression. guarantee expression. “If we don’t have a strong foundation for freedom of expression, I fear for the future of our civilization,” he said.
Today, “the media controls the story,” he said, while on Twitter, “the public can control the story. And that’s very important,” describing the social network as a “forum for citizen journalism.”
Musk also joked about the lack of a PR department on Twitter. “The right thing for PR departments is propaganda,” he said musingly, “I think we might need a VP of propaganda, that would be fairer. Also a VP of witchcraft.”
On Monday, Twitter experienced a widespread technical issue that caused an error when users tried to click links to third-party websites. Musk briefly addressed the glitch: “What should have been a small change for 1% of the Twitter user base ended up being a catastrophic change for 100% of the Twitter user base.”
During Morgan Stanley’s speech, Musk also spoke about developments at electric vehicle maker Tesla and SpaceX, both of which he leads as CEO, and reiterated his belief that humans could one day colonize Mars.
Separately, it emerged on Tuesday that Endeavor, led by CEO Ari Emanuel, had made a small investment in Twitter in mid-January. The size of the investment was not available, but a source said it was immaterial to Endeavor’s business.