Turbulence at Twitter
I truly love Twitter. It is an incredibly powerful platform that replaced the blogosphere of the early internet days. Everyone is on there; from every news outlet and commentator you can imagine to Iran’s supreme leader Ali Khamenei to Cher to John Cleese to people like me. Every subject is available from philosophy to politics to science to the latest in hardcore porn. And the war in Ukraine is reported to you live, often before traditional media bring you the news. It’s all there. Thank Jack Dorsey and his co-founders for creating something that will give you the latest greatest on literally anything from everywhere.
The value to me was always undeniable which is why I traded the stock, the swings in value where always an opportunity to jump in and out. At the same time these fluctuations were a clear sign that Twitter never found a solid footing as a large internet business. It is not a Facebook. It lacked the ability to drive real revenues from a growing user base while controversies around censoring certain views hung around the platform like no other. Banning Trump belied the image of an open platform. Business people gravitated to LinkedIn and families and kids to Facebook and Instagram. Twitter became the domain of divisive politics, cultural battles, anger and often outright intimidation. J.K. Rowling got death threats on Twitter. People lost livelihoods and many left or paused their feeds as result. It became a hard platform that just wasn’t there for the larger public. The idea that elections could be won by relentless tweeting is absurd, the platform’s reach is just not deep or wide enough. There is even an elitist touch to it all as not everyone has the intellectual power or the time to keep pounding out thoughts and engaging with those of others on a frequent basis. And real success on this platform requires being either a celebrity, non-stop tweeting or posting views that are so out of tune that they would be guaranteed an audience. Despite all of this there is still value here.
What Twitter needed most was a shift in direction. It needed a boost to substantiate this value. A seal of approval, someone to actually prevent people from leaving or setting up alternative platforms and really validate the company slogan: “it’s what’s happening”. Elon Musk did just that this week. But the core question is what he will do with his newfound power. It’s hard to believe that he will just open the floodgates to those that were banned earlier. Left wing fears of him are not entirely rational, nor is right wing cheering. Both sides probably stand to gain, but only incrementally: Twitter is not nearly as restrictive to them as they think it currently is. It remains to be seen if he can engineer a Trump re-entry. And: the edit button has been a debate forever and any change on that front - I would love it - is not going to be a purely Musk initiated thing. They were already working on it. He does not own the company and there is a larger board and management to contend with.
But what Musk can do like no other is try and push Twitter out of the zone it has been stuck in and resolve: (1) access and censorship (2) improve product and (3) enhance monetization. A more user driven theme will probably drive these changes. And the road to start up competing platforms, always hard, has all of a sudden become that much harder. Trump’s investment in his new thing, whatever the name is, lost value overnight. Talent will flow back to Twitter and the value bump will create a short-term window to right the platform. There’s life in the stock too. If Musk will not get his way leveraging his new ownership and board membership he can always count on his 80 million followers (even more than Kim Kardashian may I add) to help push management under CEO Parag Agrawal along.
But it will not be an easy one. Marc Andreessen tried it and left. It will be hard to materially break into new audiences and it will be even more difficult to avoid deep controversies if the nutters are getting a free range to tweet again. Making it more ‘user-friendly’ can really mean anything. Twitter is not a pure business in the literal sense, it is a social utility that facilitates and complements existing content sources. Musk’s presence will facilitate a new direction, but it is not a given that a turnaround will happen quickly. Even for him it will be hard to extract long term value here. But it will be an incredible fun ride, filled with controversies, spectacular and lamentable tweets and a zigzagging stock. Much like any other place where Musk turns up.