Elon Musk arrived at Twitter headquarters in San Francisco on Wednesday chuckling and carrying a kitchen sink. But it was no joke. On Friday, Musk completed his $44 billion off-again, on-again acquisition of the social media company. And as the billionaire boss at Tesla and SpaceX takes charge of Twitter, change is in the air.
Musk has promised to rid the social media service of automated spam bots, bring back previously banned users, and generally create a better online forum for free speech.
Twitter management struggled for more than a decade with allowing robust debate while cutting out offensive and violent threats. But it failed to build a growing and profitable business, opening the door for Musk’s takeover bid.
Now that the company is in Musk’s hands, here are five things to watch for in coming months:
Three-quarters of Twitter workers won’t be laid off, but some will be.
If you’re taking over a company that seems a bit bloated and you’re thinking of making big cuts on arrival, you might worry about how such draconian measures will be received. Thus, a PR strategy as old as time — leak something worse.
The 75 percent layoff rumor started with a story last week that cited “prospective investors.” Then Musk visited Twitter’s headquarters this week and offered employees the reassuring message that he does not plan to cut 75 percent of them.
Now, if he lays off one-quarter of the staff, it looks less bad. Twitter employees are scheduled to receive additional compensation on Nov. 1, so the timing of any layoffs could make a big difference.
Regardless of how deep the cuts go, Musk is starting at the top. Chief executive Parag Agrawal and other leaders were fired as soon as Musk took over, according to news reports. They won’t leave empty-handed, however. Agrawal is eligible for a payout of $50 million, and other executives will get tens of millions in severance, Bloomberg reported.
Trump will return, it’s just a matter of time.
President Trump received a lifetime ban from Twitter after the January 6, 2021, insurrection attack on the Capitol.
Musk has already made his position on the ban clear. It was “a mistake because it alienated a large part of the country and did not ultimately result in Donald Trump not having a voice,” he said in May at a Financial Times event. He went on, adding that the ban was “a morally bad decision, to be clear, and foolish in the extreme.”
How soon could that happen? On Friday, Musk tweeted that he plans to create a new content moderation council that will include diverse points of view. “No major content decisions or account reinstatements will happen before that council convenes,” he wrote.
The search is on for alternative platforms.
With many current Twitter users fretting about Musk’s changes, talk of abandoning the service is on the rise. But as the former US president and his supporters discovered, it’s not easy to create a social media service that can reach so many people all over the world and command the attention of policymakers, voters, and the media.
Pew Research conducted a survey this fall about seven leading alternative, conservative social media sites including Parler and Truth Social. No more than 2 percent of US adults regularly got their news on any of the sites. Meanwhile almost one in four US adults uses Twitter, with the majority saying it is an important source of news, according to Pew.
Perhaps web3 will come to the rescue?
Could Twitter become a public company again in the future?
Musk has repeatedly said he did not buy Twitter to make money, which is a good thing since his net worth has taken a double hit: Musk drastically overpaid for the service and had to sell billions of dollars worth of Tesla stock to close the deal.
But that doesn’t mean he plans to let the company continue to lose money. Twitter lost $221 million last year and would have lost even more in the first half of 2022 if not for the $1 billion sale of its mobile advertising unit in January. Musk plans to reverse those losses by cutting employees, reducing expenses, and perhaps making the service more attractive to advertisers.
After numerous outside investors and lenders helped Musk raise the $44 billion he needed, pressure for an exit, such as taking the company public again, will mount if the turnaround plan succeeds.
Will Musk actually avoid a “free-for-all hellscape”?
In a post addressed to advertisers, Musk this week promised that whatever changes he makes, he won’t turn Twitter into a “free-for-all hellscape.”
It’s a tricky phrase. It presumably rules out a “hellish” social media site where everyone is allowed to post whatever they want, no matter how offensive, misleading or dishonest. But what about a social media site that’s just a very unpleasant experience for millions for people? What about a “hellscape” created by people being free to post anything they want?
Bottom line: Not very reassuring.