- On October 27th, late in the evening, Elon Musk officially took over Twitter and wasted no time overhauling virtually everything about the company. He’s fired the board of directors, installed himself as CEO, and made a series of increasingly erratic product decisions in a matter of days.
- He’s mentioned relaunching Vine. He’s mentioned forming a new oversight board for moderation decisions. The most important new project is getting all verified accounts to pay $8 per month for their blue check, and engineers are fired if they don’t ship an update within the next week.
- The threat of massive layoffs, affecting nearly every aspect of the company, looms over everything. Whatever happens, it will have a significant and long-lasting impact on how people use Twitter. So, what will Elon Musk’s version of Twitter look like? Twitter was founded one year after YouTube and two years after Facebook, as part of the first wave of social media companies. But, unlike those two, Twitter has struggled to become a billion-dollar company. The platform is popular, but as a business, it is inconsistent at best, struggling for profitability under a rotating cast of CEOs. “It was like they drove a clown car into a gold mine,” Mark Zuckerberg said.
- As of the fourth quarter, Facebook had approximately ten times the number of users and ten times the revenue of Twitter. Facebook made a $8.4 billion profit from April to June, while Twitter lost $344 million. That is a significant amount of money to lose in three months. And, after 15 years of erratic profitability, Twitter was facing the very real possibility of going bankrupt. Elon Musk enters the fray. Even as a business, Twitter had become extremely influential with a core group of users, particularly those in the media. So when Twitter made contentious moderation decisions, such as banning Trump or blocking a New York Post article, it could have a significant overall impact.
As of last quarter, Facebook has about 10 times more users and makes 10 times more money than Twitter. From April to June, Facebook made a profit of $8.4 billion and Twitter lost $344 million. That’s a lot of money to lose in three months. And after 15 years of fitful profitability, Twitter was looking at a very real possibility that the company would just run out of money. Into that mess steps Elon Musk. Even as Twitter was failing as a business, it had become really influential with a core set of users, particularly people who work in the media. So when Twitter made controversial moderation calls, like banning Trump or blocking a New York Post article, it could have a huge overall effect. - Elon grew increasingly irritated with Twitter’s moderation decisions as his profile grew. And, unlike almost everyone else on the planet, he was able to raise tens of billions of dollars just to buy the thing.
This is not a way to sort of make money. Having a public platform that is maximally trusted and broadly inclusive is extremely important to the future of civilization. I don’t care about the economics at all. - So in theory, this approach could work. Whatever you think of him, Elon Musk has a long history of running mission-driven companies and if you squint a little, you can imagine Twitter being run the same way. But basically everything Elon has done since he made this offer has made the deal seem like a slow motion disaster. After charging in hard with the $44 billion offer, he spent most of the year trying to weasel out of the deal because of some pretty specious claims about bot activity, eventually caving once Twitter took him to court.
- Now Elon really owns Twitter. He’s made himself CEO and he can do whatever he wants, but mostly what he seems to want to do is make life difficult for the people who actually work there. You can argue some of this makes sense. Twitter really does need to reduce its costs and the whole reason Elon bought it in the first place was because he thought they were doing a bad job. But the fact that it’s happening so quickly and haphazardly raises the real possibility that there just won’t be anyone left to keep the platform running. Twitter’s reputation as social media’s ugly duckling also works against it here.
- Anyone with the skills to really help Twitter succeed could make a lot more money at Facebook or YouTube and they wouldn’t have to deal with working for Elon. At a company like SpaceX or Tesla, you might stick around because you really care about electric cars or private space flight. But at this point, it’s hard to imagine anyone really feeling that way about Twitter. Then there’s Musk’s view of free speech. His basic idea is that Twitter should do less moderation, which is a reasonable enough idea, but in practice, it’s meant gutting Twitter’s trust and safety team at the same time that the platform is seeing a huge surge in tweets using racial slurs.
- Whatever you think about the abstract ideas in play, this is not gonna tempt in any new users or advertisers. What’s left looks an awful lot like a death spiral, where staff chaos creates user experience problems, which leads to fewer users and less money, which leads to more staff chaos and more platform issues. For all Elon’s experience, he’s never run a social network before and he’s not gonna have a lot of runway to turn Twitter around. If he really can’t, he may have just bought a $44 billion trash fire. Thanks for watching. It’s been a busy week of updates, but you can catch it all on theverge.com. – [Director] Sweet, that was great. – Did you like the point? That was like… That’s what gets me.