Twitter CEO Elon Musk said during a conference on Tuesday that the social media company had ‘’a shot’’ at being cash flow positive in the following quarter.
The billionaire attended a live-streamed Morgan Stanley investor conference yesterday, where he said it was ‘’startling’’ how poorly Twitter made money off its platform.
He said that users spend a total of 130 million hours of their time everyday on Twitter, bringing 5-6 cents to the company per hour, which he believes could be increased to 15 to 20 cents.
He also said that Twitter saw a ‘’massive decline in advertising’’, due to ‘’political’’ reasons and the cyclical nature of the advertising business. He also mentioned this drop days after he completed the $44 billion acquisition, blaming it on ‘’activist groups pressuring advertisers’’.
According to recent data from Standard Media Index, ad spending on Twitter was down 55% Y/Y in November and 71% in December. Another recent report from The Information revealed that Twitter lost more than 500 top advertisers following Musk’s acquisition, largely due to his content moderation changes. To lure back those advertisers and attract new ones, the company has eased its ad policies and introduced various ad incentives.
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In an effort to cut its costs and boost its revenue, Twitter has rolled out significant changes to its business following Musk’s acquisition. In addition to mass layoffs, the company launched its paid Blue subscription plan, which has been recently expanded to over 20 countries, and offers perks like the verification badge, tweet editing, posting tweets of up to 4,000 characters, and two factor authentication via SMS. It also banned all third party developers, replaced its Twitter API with a paid plan, and later introduced a free but limited API after receiving backlash.
Musk said that Twitter has now reduced its non-debt expenditures from an anticipated $4.5 billion to $1.5 billion in 2023, partially thanks to a 40% decrease in its cloud services bill and the closure of one of its data centers. But there are annual interest payments of around $1.5 billion waiting for the company because of the debt it needed for the acquisition, he added.
The billionaire also talked about his plans to turn Twitter into a payments platform. “I think it’s possible to become the biggest financial institution in the world,” Musk said.
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After being criticized by Tesla investors for spending too much time on Twitter, Musk said in December that he would step down as CEO once he finds ‘’someone foolish enough to take the job’’. During the conference, he said that it could take a few years to create a new Twitter management team.