What will Elon Musk do with Twitter?

Elon Musk has left the battle over his $44 billion acquisition of Twitter to tackle an even tougher task: trying to change the social media platform he says he loves.

When the deal closed on Thursday, a new era began for one of Silicon Valley’s most powerful communications tools — but also for Musk himself, who can now include “social media mogul “.

The change of ownership has been welcomed by those who see the billionaire as the right man to revamp a struggling company that, in their opinion, has not reached its full potential. The self-proclaimed “Chief Twit” has already made big plans for a faster pace of product innovation on the platform and the adoption of new revenue streams, looking to downsize the social network’s operations. As early as Thursday, he began cleaning house, firing top executives, including CEO Parag Agrawal and head of security Vijaya Gadde.

In addition to being an active user on Twitter, the impulsive Musk is a newcomer to the social media industry, where companies like Meta, Alphabet and Snap have lost more than $1 trillion in market value this earnings season amid continued macroeconomic difficulties. .

Some experts note that he will now be elevated to a crucial political guardian, given the enormous importance of Twitter among politicians and campaigns, and fear his leadership could do more harm than good.

Musk has vowed to restore “freedom of speech” on the platform and undo the outright expulsions, paving the way for the return of former President Donald Trump as the US midterm elections approach in a few days.

“We’ve seen people’s businesses and reputations go up and down by what happens on Twitter, we’ve seen markets go up and down by what happens on Twitter, we’ve seen elections go up and down by what happens on Twitter,” said Joan Donovan, research director. from the Shorenstein Center for Network Policy and Public Policy at the Kennedy School at Harvard.

“Musk has intention here, he will be driven by his techno-libertarian politics.”

For users, advertisers, investors and employees, the question is what’s next and what are the implications of the Musk acquisition for the social media platform.

Musk, who identifies himself as a “free speech absolutist,” said he would respect each country’s free speech laws and assured advertisers on Thursday that Twitter “can’t become hell free for all.” Instead, users will have the freedom to choose the “experience they want according to [suas] preferences,” he said.

He will also end permanent bans, having told the Financial Times in a May interview that he would allow Trump to return to the platform he was kicked out of after the attack on the US Capitol on January 6, 2021.

Casey Mattox, a senior fellow at the Charles Koch Institute, is among those who welcome Musk’s takeover, arguing that it will likely shift Twitter towards a fairer, less “centralized” system of content moderation, towards moderation determined by the user.

But some scholars warn that Musk’s approach could open the floodgates to toxicity, hatred, extremism and misinformation, arguing that it ignores the risk of platform manipulation.

“Musk often talks about Twitter as a ‘digital public square,’ which conjures up compelling images of individuals with equal voices exchanging ideas,” said Eddie Perez, who serves on the board of the OSET Institute, a nonprofit electoral security organization, and was director of product management at Twitter.

“This is naive; it is often more like an asymmetrical war with good resources, with bad actors. [e] Nation states working in the shadows to try to manipulate the platform and amplify disinformation.”

Others question whether Musk might be susceptible to pressure from foreign powers, particularly given his recent public stances on the Russia-Ukraine conflict, publicly calling for a negotiated settlement to end the war in the country, and the praise he has received from Beijing for comments on Ukraine. Taiwan.

App that does it all

Either way, Musk has an uphill battle ahead. In buying Twitter, he takes a company that has long struggled to grow at the same pace as rivals or develop a compelling advertising offering, according to several industry insiders.

Musk himself acknowledged last week that he and investors were “obviously overpaying” – $54.20 – a share of Twitter, putting him under pressure to deliver results to those who supported the deal during a broader economic crisis.

Musk previously said that Twitter needed to “get healthy” and that he would cut jobs and costs to deliver that, which will involve reorganizing the board. Text messages revealed as part of Musk’s legal battle with Twitter showed that he had been inundated with recommendations from associates for top positions. But Musk has only come up with one name as a potential board member: talk show host Oprah Winfrey.

He suggested that he would not name any top management positions, writing that he would personally “oversee software development”. Musk is also likely to destroy Twitter’s laid-back remote work culture in favor of working long hours at the office, as at his other companies, which could lead to clashes with employees.

At the heart of his plan for the platform, Musk hinted that he wants to build a WeChat-style “super app,” tweeting, “Buying Twitter is an accelerator to build X, the app-everything.” These are apps that typically allow users to message, shop, send payments or order taxis all in one place — and are popular in China, whose antitrust laws are less stringent than in the US.

In an initial presentation to investors, he pledged to quintuple revenues by 2028 to $26.4 billion compared to 2021 and reach 931 million users, up from 238 million today, according to a person briefed on the document. The impetus would come from a new payments business, as well as subscriptions and data licensing.

Changpeng Zhao, the chief executive of Binance, who was one of the equity investors in the deal, said in a statement on Friday that he hopes to help Musk “realize a new vision for Twitter,” including broadening “the use of and adoption of cryptocurrencies and blockchain technology” – signaling that cryptocurrencies could be part of Musk’s payment plans.

Donovan noted that PayPal co-founder Musk might try to turn Twitter into a banking entity due to its track record, but warned: “If Musk is really as anti-establishment as he says he is, there is a risk that he will destabilize currencies with the power of these networks. of Twitter”.

Others are more excited about the entrepreneur’s prospects when it comes to driving the business forward.

Musk suggested the company will stop relying so heavily on advertising in the future — from about 90% in 2021 to 45% of revenue in 2028. However, on Thursday he sought to woo brands, posting that it was “essential to show Twitter users the advertising as relevant as possible to your needs”.

Pinar Yildirim, associate professor of economics and marketing at the Wharton School at the University of Pennsylvania, said that Twitter “has a lot of potential to provide a high-quality user base to advertisers” and that Musk clearly understands that “advertising will have to be more efficient on Twitter”.

She added: “That’s an easy fruit, not a hard thing for Twitter to improve. Once they do that, I’m sure Twitter will be able to attract more advertisers.”

Much will depend on Musk’s approach to speech, however, as some advertisers are already nervous that Twitter will not remain a safe place for brands should it become a hotbed of toxicity and abuse.

Kieley Taylor, global head of partnerships at global advertising group GroupM, said some of its client brands have told the agency to suspend advertising on Twitter if Trump’s account is reinstated, for example. The Wall Street Journal first reported on the brands’ requests.

“Twitter’s top advertisers should make it clear now that if Musk reverses the brand safety policies he said he would reverse, they plan to exit immediately,” Angelo Carusone, president of left-wing charity Media Matters, wrote on Twitter.

Translated by Luiz Roberto M. Gonçalves