Elon Musk is live at the Morgan Stanley conference providing an update on Twitter. He describing how Twitter has been made better for advertisers and its users.
Elon Musk says he will make Twitter into the biggest Financial institution in the world using payments and other financial services by becoming an Everything App.
Twitter is EBITDA profitable today. Twitter should be cashflow positive in Q2 2023.
Twitter is being used at 130 million hours per day. This is being monetized at $0.05 per hour. Twitter is making $6.5 million per day. Twitter has a goal of monetizing at $0.20 per hour. Twitter would then make $26 million per day or more if the usage increases as well.
Twitter has reduced from 3 data centers to 2 data centers. Twitter has more users but has reduced cloud spending by 40%.
Twitter will introduce keyword advertising later this year.
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The total addressable market for the Tesla compact car (with robotaxi capability) is eventually every person on the planet.
SpaceX Starlink will be better than fiber for global communication.
SpaceX Starship first orbital flight should be within a month. SpaceX Super Heavy Starship should have rapid reusability within 2 years.
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Problem is, there’s no taste for an “everything app”. There’s no point in it, unless you want to control every aspect of peoples’ lives, a la China. From a consumer point of view, it’s an extra unnecessary click, a pointless additional layer between the home screen and their goal.
It makes sense if he rolls out his own phone/ecosystem. Think Tesla in-car OS / app experience + Starlink. It makes a lot of sense, and even more so with nextgen LLM AI being an interface layer that reduces (if not outright eliminates) the need for many specialty apps. He will attempt to out apple apple.
Will a purchase using the new Twitter also include a donation to far-right MAGA Republicans? Also, money to make Scott Adams whole?
Yeah. I don’t want to pay for popcorn at a movie and then be waylaid by some snarky tweet by a communist or pink-haired “sexually fluid” person.
I wouldn’t trust Twitter with a dime for a day. I don’t care how many reforms Musk brought in.
I wouldn’t put my life savings on Twitter, but I’d keep a balance.
I was an early adopter for Paypal, and used it frequently until they up and decided one day that it was their money, not mine, and they could say what I was allowed to spend it on. Pulled out my money and canceled by account then.
There are two critical questions here:
1) Is Twitter going to curate transactions, tell you that you can’t spend your money on something that they disapprove of?
2) Are they going to maintain detailed transaction records beyond the minimum the government forces them to?
If the answer is “no” to both, I’m in. Because they’d be offering something the banks and credit cards are currently moving away from. The banks have almost universally decided to serve the government as a secret police, reporting your transactions without even needing to be ordered to. And are starting to keep detailed records on what you spend your money on.
We’re moving towards social credit scoring here in the US, Twitter could be a way around that if they’re principled enough.
Musk desperately wants Twitter to become the WeChat of the west, but the conditions simply aren’t right for it currently to organically form. If there were some forcing situation, or a collapse of some other major social media platform, he might have a chance, but TikTok being banned in the US isn’t sufficient.
The forcing situation, at least potentially, is the regular banking system voluntarily, or under covert pressure, becoming an arm of the government.
Look at Bank of America, on their own initiative, ratting out their depositors who spent money in DC on January 6th. The recent adoption by the credit card companies, in unison, of a special tracking code for gun related purchases.
The banking system have decided that they want to be the government’s informant and enforcer. If that gets bad enough, a significant number of people will want a way besides cash to conduct transactions that the government isn’t tracking in detail or able to veto.
The other issue is that Musk is talking about doing something the banks gave up on years ago: Paying a significant interest rate on balances, no matter how small. That’s a game changer for people who don’t have enough money to be investing in things like money market certificates.
Yeah, ratting out the rats that injured police officers and tried to delay the count of electors, who would tolerate that behavior?
Turn it around. Do you want the next Trump government having your full spending records?
Pffft. Advertising income is 40% down after the blue tick fiasco. If I want a payment app, I’m just gonna use a payment app. I don’t want a payment app which is also a mass communication tool; its not going to be great at either thing.
The whole point of the “blue check fiasco” was to move Twitter away from an advertising based system to a subscription based system. Ideally aiming for 0% advertising revenue! So, way to focus on a, not just irrelevant, but actually backwards, metric. (Not saying the effort was successful, BTW. Just that you picked precisely the wrong metric to measure its success.)
Because he who pays the piper calls the tune, advertising based systems inevitably operate for the benefit of the advertisers, not the users. If you want to be using a system that operates for your benefit, expect to pay for the privilege. People need to figure that out.
Now, as I look at a graph of Twitter revenue, (Find one yourself, I don’t want to go into moderation by linking to one.) it IS down from the all time peak in the 4th quarter of 2021, when people were locked down and had little to do but tweet. Down 26%, not 40%.
It’s roughly the same as 4th quarter 2020, and higher than any quarter previous. So, way to cherry pick, fella.
Meanwhile, Musk has cut costs dramatically, so losses are way down from a couple years ago.
It’s still an open question whether he can make Twitter profitable again, as it was for a few very short years. But he has actually been making good progress.
Oh I stand corrected. Its down 26%. Annual revenue is down from $5bn in 2021 to $4.4bn in 2022. But Twitter wants to be able to survive on zero advertising income anyways, so not to worry.
Yeah, the proper metric isn’t “advertising revenue” it is “profit margin”. That’s my point. In theory they could go to 0% advertising revenue”, and everything could be just peachy. Or if they increased advertising revenue, but costs exploded, they’d be in deep trouble.
So “advertising revenue” is just the wrong metric to use.
In fact, while revenue dropped 26% from that all time peak, costs have dropped even further, so that the company’s bottom line has actually improved since then.