Elon Musk Raises Extra Questions About Twitter’s Strategy, Which Might Result in a Large Shake-Up

Elon Musk Raises More Questions About Twitter's Approach, Which Could Lead to a Big Shake-Up

If nothing else, Elon Musk appears decided to shake issues up in his time as Twitter’s prime shareholder, and see what he could make occur, which may set the platform on a course for inner angst and person disruption as Twitter’s varied chief attempt to discover methods to placate the newest member of their board.

However earlier than we get into Elon’s newest suggestions for the platform, it’s price establishing the place Twitter is at, and what its present targets are, to set a transparent understanding of the stakes.

Again in 2020, investment agency Elliott Administration purchased a 4% stake in Twitter – price round $1 billion on the time – with the intent of forcing Twitter to oust long-term CEO Jack Dorsey and change him with a extra business-focused chief, with a view to maximizing the app’s efficiency.

Elliott’s view was that Dorsey, who can also be the CEO of Sq., was unable to provide the corporate the eye it requires whereas working in each roles, so it purchased up shares to be able to push him out. Ultimately, Twitter’s administration negotiated a peace deal of types with the Elliott group, which concerned Elliott and Silver Lake Partners both gaining a seat each on Twitter’s board, and noticed Twitter set bold new development targets, which, presumably, additionally held important penalties for Dorsey and Co. if they might not be met.

These targets have been shared publicly in February last year:

  • 315 million monetizable every day energetic customers by This fall 2023 (Twitter presently has 217 mDAU and added 18m in complete in 2021)
  • $7.5 billion annual income in 2023 (Twitter made $3.7b in 2020 and $5.1b in 2021)
Twitter analyst day targets

As you’ll be able to see, these are some powerful targets, and it might be that the stress positioned on the corporate because of Elliott’s push result in Dorsey’s choice to step down as CEO in November last year. Dorsey was changed by CTO Parag Argrawal within the function, and that might, in some respects, have given the Elliott consortium what it needs, which may have eased the stress on the corporate – however then, shortly after his appointment, Agrawal re-affirmed that Twitter would maintain these growth targets in Dorsey’s wake.

So Twitter already has a tricky highway forward of it, particularly on person development. And into this comes Elon Musk, who bought up a 9% stake in Twitter late last week. That’s double the holding of Elliott Administration, and greater than Elliott and Silver Lake mixed, giving Musk a big voice within the firm. Twitter shortly appointed Musk to its board, amid considerations that he may look to buy-up much more shares, and take a controlling curiosity within the firm (Musk’s appointment to the board limits him from buying more than 14.9% of the company).

And now, we’re on this new actuality, the place Musk’s voice may maintain important sway within the firm’s future course.

And he’s wasted no time in making provocative claims and assertions forward of his first AMA with Twitter staff next week.

In a late night time flurry of tweets on Saturday night time, Musk famous that:

  • Twitter’s hottest accounts, primarily based on follower numbers, are not very active, which prompted the query – ‘is Twitter dying?’

This comes after Musk shared a poll earlier in the week, by which he requested if Twitter customers need an edit button, which greater than 4.4 million people responded to (74% in favour). Twitter then famous that it’s, in actual fact, engaged on an edit button, and has been for a while, however Musk’s ballot as soon as once more underlined the general public stress that he may placed on the corporate, which he also can now use to back-up his views and opinions in Twitter’s board conferences.

Musk’s array of concepts may definitely trigger some complications, and planning restructures inside Twitter HQ.

On the primary level, that Twitter’s hottest customers should not energetic – Twitter’s already engaged on this, by including in new incentives to get folks to tweet extra typically, together with Super Follows, tipping, newsletter integration, on-profile product displays and extra. These in all probability gained’t get the Justin Bieber’s of the world to be extra energetic, as a result of they’re gained’t essentially be incentivized by these income packages, however they might get extra mid-level influencers extra energetic, which may make Twitter really feel extra ‘alive’ as soon as once more.

Perhaps. It’s arduous to say how efficient issues like Tremendous Follows will really be, however there’s not likely an excellent answer to get extra excessive profile customers partaking extra typically. If Musk has any concepts on that, little doubt Twitter’s administration might be eager to listen to them.

On the second, that Twitter ought to add another checkmark for paying customers, this concept has been floated many instances, that Twitter may confirm customers that show their id, not with a blue tick, however with one thing else, to be able to legitimize their presence. Making this a paid choice in all probability isn’t one of the simplest ways to go (because it may incentivize scammers), however possibly there may very well be an argument for variable indicators primarily based on proof of id, which may put extra onus on accounts to substantiate their particulars, thereby lessening the affect of faux accounts and bots who wouldn’t have it.

Which results in Musk’s final level (I can’t say a lot on the concept Twitter’s residence base must be re-used for an additional objective), that there are too many bots and rip-off profiles within the app, which impacts the person expertise. That is probably true – based on earlier estimates, around 15% of active Twitter profiles are likely bots, whereas bot accounts have additionally contributed up to 60% of the tweets around politically divisive topics at instances.

That’s a big downside – however on the identical time, would eradicating them be in Twitter’s greatest pursuits, from a metrics standpoint?

As famous, Twitter’s trying so as to add nearly 100m energetic customers within the subsequent yr and a bit. Eradicating 15% of its energetic person base – equal to round 32m profiles – would clearly affect that technique, making it nearly unattainable to succeed in.

However possibly it might be higher for Twitter, general, to assault this extra vigorously? Perhaps it might be higher to take away bots fully, even when it reduces the person rely – however then once more, we don’t know the penalties that Twitter’s administration may very well be going through if it fails to fulfill these benchmarks.

Might Musk persuade Twitter’s board to alter course on this, if Twitter have been to fight bot profiles?

That then results in questions on figuring out and eradicating bots definitively, which might undoubtedly result in some false positives, and certain some discount in engagement, at the very least within the quick time period.

Such an method may work, within the longer-term view, however would Twitter’s different shareholders have the persistence required to re-structure this ingredient?

These are the kinds of questions that Twitter’s going to must weigh within the Elon Musk period, and whereas they might effectively result in systematic enhancements, they might additionally trigger some main complications for Twitter’s administration within the upcoming quarterly reviews.

After which there’s the censorship ingredient, and Musk’s potential affect on Twitter’s stance on moderation and eradicating accounts that break the foundations.

Musk not too long ago questioned Twitter’s adherence to ‘free speech rules’ which he famous are basic to democracy.

Musk was additionally a vocal critic of Twitter’s banning of former US President Donald Trump early final yr.

Apparently, the founding father of Elliott Administration, billionaire investor Paul Singer, can also be a “Republican mega-donor”, who, whereas he was initially opposed Trump’s insurance policies and method, finally got here round to backing the previous chief.

So now you’ve at the very least two parts in Twitter’s board room who, at a look, would seem to again a extra ‘free speech’ method to moderation on the app.

That would spark huge conflicts, particularly as social platforms now appear to be typically in settlement that sooner motion is required on probably dangerous actions, to be able to quash them earlier than they achieve any traction.

Platforms took too long to address QAnon, permitting it to unfold, and infect extra folks through their networks. They haven’t made the identical mistake on anti-Ukraine propaganda.

Will Musk’s appointment be a step again on this ingredient, and permit extra harmful speech to take maintain through tweet?

Actually, proper wingers are happy with Musk’s board ascension, and with the pending failure of Trump’s ‘Truth Social’ app, they’ll be eager to see if Musk can reinstate a few of their previous freedoms, at the very least in a perceptual sense, inside the app.

It doesn’t matter what, Twitter definitely appears to be like set for a shake-up – however whether or not the top outcome is definitely a greater expertise, we’ll have to attend and see.

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