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

(CNN) Elon Musk on Tuesday offered an upbeat picture of how Twitter can improve the advertising business he helped derail and boost its bottom line, while also admitting that keeping the social network afloat is proving to be a challenge after several rounds of layoffs.

In remarks 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.

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

With this change and greater cost savings 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’s useful, because it’s relevant, there’s going to be a massive increase in revenue because it’s 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 faced a mass exodus of top brands as Musk relaxed some content moderation policies, restored brand accounts and made a series of erratic remarks regarding politics and world affairs. Musk, who has previously tweeted about his hatred of advertising, quickly moved to bolster a paid subscription offering instead, but that has reportedly struggled to gain traction.

He also took time to thank advertisers who 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 accounted for nearly all of the company’s revenue, there are genuine doubts about whether the platform can stay online at all.

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 “excessively complex” underlying technology for some of the recent service disruptions.

“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 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 promote the product because it’s really too complex to say the least.”

“We will make a change, what appears to be a small change somewhere, which 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 employee with a disability who asked the Twitter owner if he had been fired.

At Tuesday’s event, Musk went off on a number 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 the real thing and what you read in the papers isn’t.”

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