It’s official: Elon Musk is the new owner of Twitter. 100% Twitter. After buying just under a tenth of the company a month ago and it seemed unfeasible that their desire to gain total control could prosper, after the impediments and reluctance of Twitter’s own board of directors (via anti-Musk plan), the Trading was reactivated in recent days to lead to an official announcement on Monday night.
21,000 million dollars come from its own capital. The other 25,500 million with which the operation is closed have been financed by Morgan Stanley Senior Funding together with other companies. Twitter is already in the hands of Musk.
Influence at losses
The company Elon finds is a social network several magnitudes smaller than others in terms of number of users, but with influence and agenda-setting ability like no other.
Even Snapchat, which lost what made it different when Instagram decided to copy it, has more active users, but no other social network gets so many looks for so many hours a day among politicians, journalists and institutions of all kinds. Election campaigns are part of an alternative universe on Instagram. On Twitter they are insufferable. It is enough for anyone to publish something unique for headlines to start proliferating that brand the anecdote as a trend. “The nets burn”.
In exchange for that influence, the asterisks: Instagram is the Godzilla of ad revenue, and TikTok is the monster that hogs users’ attention better than anyone else. Twitter is also a network that loses noticeably when we go from measuring monthly to daily users. There it stays at about 210 million. Namely, a third of its users are there frequently, but not every day.
Having a lot of influence over a small number of accounts, compared to Facebook and company, might not be a problem. There is Apple with its particular version of Pareto’s Law: it earns 80% of the benefits of the mobile industry with 20% of sales. This is not the case of Twitter, which has its main problem in the pocket: is not capable of converting its great capacity for influence into a profitable business on a sustained basis.
In 2017 it achieved black numbers for the first time, after many cuts that included dismissals in the offices of several countries. Nothing too different from what can happen in any startup out of Silicon Valley.
What breaks the script is that the black numbers only lasted four years, until the pandemic shattered its good trend and returned it to losses worthy of the first half of the last decade. Twitter earns more and more money, but it has barely managed to make a profit and the most common, also in 2021, were losses.
this trajectory has its mirror in the evolution of the stock market share of Twitter, which in its nine years on the market has followed a U-shape: success in its launch, fall and plateau for years, and growth in the years in which it began to be profitable and make a profit. And since the end of 2021, when the red numbers bloomed again, a notable drop only corrected in recent weeks, when rumors of the purchase by Musk began, first partially and finally total.
In addition to a hugely relevant social network with constant problems being profitable, Musk also finds himself with a Board of Directors that has governed Twitter with little real knowledge of how this social network works.
Jack Dorsey, founder and CEO until two newscasts ago, knew the network perfectly as an extremely intensive user. They are regular users too. Brett Taylorwho chairs the board and comes from Salesforce; Mimi Alemayohufrom MasterCard, or Martha Lane Foxfounder of LastMinute and member of WeTransfer among other positions.
However, there are several board members who are not very active on Twitter, starting with the CEO, Parag Agrawaland following by Fei-Fei Li, Patrick Pickette either David Rosenblatt. Then there is the group of those who do not use Twitter directly or do so in a less than residual way. Cases of Egon Durban (54 tweets in five years), Omid Kordestani (549 tweets in ten years) or Robert Zoellick (no tweets since he opened his account in 2018).
The CEO of Nike does not have to run marathons, but he should live a certain sporting activity from within to understand certain motivations and common sensations in those who are going to be his clients, or could be. In the case of Twitter, it is striking how a large group of those who make their key corporate decisions turn their backs on the only product of the company, being impossible to be exposed to the usual dynamics in this network, to the inertia of its users.
In the background, and approaching on the horizon, something that will possibly end up exploding when Musk’s intentions collide with regulations such as the European or American ones. Musk declares himself an “absolutist of freedom of expression”, and his great concern about the network seems to be in its content moderation policies.
Twitter comes from several years with moderating practices that left Donald Trump out shortly after leaving the White House. In addition to various regulations that have been forcing him to set certain protocols in some scenarios, both to Twitter in particular and to various social networks in general. The Digital Markets Act of the European Union does not seem to have the same maximalist approach to freedom of expression.
I hope that even my worst critics remain on Twitter, because that is what free speech means
— Elon Musk (@elonmusk) April 25, 2022
Various organizations like Human Rights Watch They have been warning of the danger of this approach, from the consequences of allowing hate speech to proliferate to the moment in which this freedom of expression collides with Human Rights. It is also necessary to see how exactly Musk understands this unlimited freedom of expression, since that is not what he has done in his previous companies, Tesla and SpaceX, where there have been repressive consequences for those who have publicly criticized their practices, or agreements of confidentiality that include the impossibility of suing their employers.
On a commercial level, Twitter is more than 90% monetized via advertising, with the newly launched Twitter Blue as a direct subscription program for three dollars a month, which is not even available beyond a few countries. Musk has already warned that he intends to change that approach, both in terms of monetization and Twitter Blue, which would allow all his subscribers to become automatically verified, for example.
Possibly in five years we will have a Twitter experience very similar to the current one, but today there are many unknowns about what Musk’s management will be like, an antagonistic profile to that of other CEOs with a much less media profile but with several notches on their belt, see Jeff Bezos, Tim Cook or Satya Nadella, with a track record worthy of Clint Eastwood. Musk’s has also scored many successes, both in space and in the automobile, although it has been in ‘The Bridges of Madison’ mode for a while.
George is Digismak’s reported cum editor with 13 years of experience in Journalism