Musk, speaking at a Morgan Stanley investor conference that was webcast, said it was “startling” how poorly Twitter managed to make money off its messaging service.
The company has reduced its non-debt expenditures to $1.5 billion from a projected $4.5 billion in 2023, helped by cutting its cloud services bill by 40% and closing one data center, Musk said. Twitter has also laid off thousands of employees.
Musk, who is also CEO of electric car maker Tesla Inc, acquired Twitter for $44 billion in October. The company also faces annual interest payments of about $1.5 billion as a result of the debt it took on in the take-private deal, Musk said.
He added that Twitter has been hit by a “massive decline in advertising,” some of which he said was due to the cyclical nature of ad spending and some of which was “political.”
Twitter has been marked by chaos and uncertainty since the acquisition by Musk. On Monday, it suffered a bug that prevented thousands of users from accessing links, its sixth major outage since the beginning of the year, according to internet watchdog group NetBlocks.
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Musk said in reference to Monday’s outage that what had been intended as a small change to 1% of users ended up being a “catastrophic” change for all. He added that engineers were doing a lot of “clean up” in general of the Twitter software code. Concerns over Twitter’s stability have been widespread since the Musk deal. Among the mass exodus were many engineers who were responsible for fixing and preventing service outages, sources told Reuters.
The billionaire said he expected it would take a few years to build a management team at Twitter. Musk, who has faced scrutiny from Tesla investors about the amount of time he spends running the social media platform, had previously said the end of this year would be “good timing” to find a new chief executive to run Twitter.
He also reiterated his plans to introduce payments on Twitter, and said he envisions users could eventually send money to each other with one click.
“I think it’s possible to become the biggest financial institution in the world,” he said.
Making ads more relevant on the platform is another focus for the company, he said. Some advertisers have fled Twitter due to uncertainty over how Musk, who has called himself a “free speech absolutist,” would approach content moderation.
The Financial Times reported on Tuesday that European Union regulators told Musk to hire more content moderators at Twitter in order to comply with an upcoming law.
Musk said at Tuesday’s Morgan Stanley event that both Democrats and Republicans now trust Twitter to the same degree. The platform had 253 million daily active users that were “monetizable” in the fourth quarter, according to a slide displayed during the webcast.
Musk said Twitter currently earns 5 to 6 cents per hour with users spending a combined “130 million hours of their time per day” on the platform. He said the company could increase it to 15 to 20 cents.