Clipped Wings: Will Twitter survive Elon Musk’s takeover?
Elon Musk’s recent takeover of Twitter has been chaotic, to say the least. As part of his strategy to make the company profitable, he has fired around half of the company’s workforce, and many others have voluntarily left. Among those that have been fired, include members of the content moderation team, responsible for removing illegal content, and that which goes against the Twitter terms of service.
In addition to cleaning house, Musk is also eager to experiment with other ways to turn Twitter profitable. There was a very short-lived & failed attempt to introduce an $8/month subscription for a ‘verified’ blue check-mark for one’s account (called “Twitter Blue”). Before his takeover, the blue check-mark indicated that the Twitter account belonged to the person/organization it claimed to be. These accounts were verified manually by Twitter’s staff. Musk’s rollout of Blue caused absolute chaos, as people paid $8 to impersonate companies such as pharmaceutical giant Eli Lilly, with the fake account tweeting “We are excited to announce insulin is free now.” This (fake) announcement led to an immediate crash of Eli Lilly’s stock price.
The obvious problems introduced by this ‘pay-to-verify’ system were laid out in a document created by Twitter’s trust and safety team before the launch of Twitter Blue. The document, which was ultimately ignored by Musk & senior leaders, apparently predicted with eerie accuracy the type of chaos that would be unleashed with the launch of Blue. Because of the many problems it presented, Musk put an end to Blue shortly after the launch.
Advertisers wary of Twitter’s future
Twitter currently gets around 90% of its revenue from selling ads. This is important to keep in mind because advertisers are going to be less willing to pay for ad-space on a platform that is unmoderated and full of accounts impersonating businesses & world leaders, hate speech, disinformation, etc. This is exactly what advertisers seem to fear is going to happen to Twitter — Musk has recently admitted that the company has seen a massive drop in spending by advertisers on the platform, likely due to his takeover of the company. The largest ad agency in the world, GroupM, has now labeled buying Twitter ads as ‘high risk’ due to the large number of senior employees leaving the company, and questions about Twitter’s content moderation abilities.
Musk’s initial interest in purchasing Twitter stemmed from his belief that the platform was censoring free speech. He has recently vowed that Twitter will not censor negative/hate tweets. There are serious issues with this approach, however. For one, to take action on tweets reported as hate speech, discrimination, etc., Twitter needs content moderators. These have largely been fired. Additionally, for this policy to have any real impact, the tweets would need to flagged immediately — otherwise the tweet will have ample time to circulate widely and be seen by potentially millions of people. According to Musk, these tweets will not be taken down even after they are flagged, so they will remain accessible, even if accessing it does require a direct link to the tweet. How advertisers will react to this new policy remains to be seen.
If Twitter does permanently end up losing a significant amount of advertising revenue, it would be a monumental task to make this up via subscriptions. At a price of $8/month (the cost of Twitter Blue), the company would need 64 million subscribers to completely replace ad revenue and other losses. This number of subscribers is likely completely unreachable by a platform with ‘only’ 238 million monetizable users. For a comparison, YouTube has over 2 billion users and just 80 million subscribers. Of course, it is unlikely that Twitter will lose all ad revenue, but any lost revenue will need to made up for somehow.
Where to go from here?
Among the mass-exodus of employees from Twitter are many software engineers that are crucial for the smooth running of the platform. In fact, around two-thirds of the company’s ‘core service engineers’ have left the company. The huge amount of institutional knowledge that has been lost with the departure of thousands of employees cannot be understated. Pile onto this the fact the Musk often seemingly has no idea what he is doing — recently deploying significant changes to Twitter in the live environment, instead of first testing them to ensure that they don’t break anything. At least one of these recent changes did end of breaking something — the two-factor authentication service that sends a code via SMS to verify someone’s identity when logging into their account.
Whatever future plans Musk has for Twitter may be shaped by trolls and bots, as he has recently used a Twitter poll to determine if Donald Trump should have his account restored on the platform (the poll determined that Trump’s account should be restored). Musk has himself admitted that this poll was likely influenced by trolls and bot accounts, so it seems to be questionable to use the results to make any decisions. In fact, the huge number of bots and troll accounts on the platform was one excuse he used in an attempt to back out of the Twitter acquisition. It’s clear that the future of Twitter is still very much unknown, and the total collapse of the platform is not an impossible outcome. We’ll just have to wait and see.
