Overpaying for Twitter within the midst of a tech inventory downturn and secular decline in social media promoting might become the least of Elon Musk’s troubles.
Having accomplished his buy of the corporate final week, the world’s richest man has simply taken on not one however two critically tough issues. Failure to unravel them would tarnish his enviable fame because the uncommon all-purpose entrepreneur who has introduced a golden contact to markets as totally different as electrical vehicles and rocket ships. It will additionally undermine his pretensions to having the ability to repair tough societal issues, at simply the second he appears bent on utilizing his appreciable wealth and private affect to imagine a extra outstanding position in public life.
As one veteran Silicon Valley financier warned when the billionaire first declared his want to purchase Twitter: this deal may become Musk’s Waterloo.
The primary drawback is to cement Twitter’s position as an open market for concepts with out on the similar time turning it into what he calls a “hellscape”. In some methods, Musk himself will be the worst particular person to tackle this job.
For a begin, his personal use of Twitter hardly makes him appear like an appropriate arbiter of on-line behaviour. He has typically proven a tone-deafness in trolling his enemies and has used the service to take goal at individuals he disagrees with. He notoriously tweeted that he was near a fictitious Tesla buyout, resulting in a tremendous from the US Securities and Alternate Fee and the lack of his Tesla chairmanship.
Regardless of claiming to be a “free speech absolutist”, Musk has already conceded that some extent of content material moderation is required. However he hasn’t defined clearly why he thinks Twitter’s earlier administration failed at this job, or what requirements he would apply in making an attempt to do it higher. After sacking a lot of the corporate’s high administration, together with the manager most straight answerable for tackling on-line harassment and misinformation, he appears doomed to repeat classes Twitter has already spent a few years studying.
Musk’s in depth enterprise pursuits additionally complicate the image. His corporations are depending on authorities choices relating to issues equivalent to opening new automotive vegetation, securing uncooked supplies and profitable contracts for rocket launches. That might give international governments leverage in the event that they need to affect how Twitter operates.
His second drawback is Twitter’s failure to interrupt out of a comparatively slender enterprise area of interest. For the knowledge junkies who spend massive elements of their day on the service, it is a useful device. However Musk has set his sights on reaching a far larger viewers, whereas additionally shifting past promoting to earn cash from funds and commerce.
His supporters discuss as if his report in different markets nearly ensures success. One co-investor within the Twitter buyout, talking earlier than the deal was accomplished, claimed to be unconcerned in regards to the $44bn buy value, which was agreed earlier than the current tech inventory stoop. With Musk in cost, this particular person mentioned, the corporate may find yourself being price $300bn. But it was not clear how this might be achieved.
Musk has urged that one path to enlargement could possibly be to construct larger audiences round totally different specialist pursuits. That’s one thing Twitter had already been engaged on, although it was lagging nicely behind the bold targets that had been set for viewers progress. To make quicker viewers good points, he’ll want one thing extra radical.
One choice can be to show Twitter right into a platform, making it a central repository for tweets that others may faucet into. That is an concept that harks again to Twitter’s earliest days, when the corporate briefly pursued a platform technique. If different corporations introduced their very own algorithms to bear on Twitter’s content material, presenting it in several methods for their very own audiences, it would broaden the market extra quickly than Twitter may do alone.
A platform strategy may additionally go some technique to resolving Twitter’s moderation drawback. Teams of customers may tackle the job of moderating discussions on subjects they’re excited about, as they already do on Reddit. Or different corporations that construct their very own providers on the Twitter platform may assume the duty, devising totally different ranges of moderation to swimsuit the actual audiences they’re making an attempt to draw.
Would Musk again an concept like this? For now, the one certain factor is that he’s taking Twitter again to the drafting board. The fame of the period’s most profitable entrepreneur is using on the end result.