Billionaire magnate Elon Musk has made a fortune from tech, but he’s never run a company like Twitter.
This week it showed, experts said.
Musk, the CEO of Tesla and SpaceX, spoke for the first time Thursday about his $40 billion bid to take control of the social media company, and he gave few specific details of any plans he might have, despite being full of his usual swagger on topics such as electric cars and rocket science.
At the TED2022 conference, Musk spoke in general terms about allowing more content to go unmoderated on the platform in the name of free speech — a change that could allow more hate speech and harassment to flourish — and didn’t address core business concerns such as user growth or advertising revenue.
Experts warned that Musk’s vision for the platform, should he successfully acquire the company, could lead to major hurdles down the road.
How Musk might lead Twitter
Musk’s lack of experience in the worlds of advertising and social media stuck out to some analysts.
“He doesn’t seem to have a sophisticated notion of what it means to engage in a global media business,” said Siva Vaidhyanathan, author of a book about Facebook and the director of the Center for Media and Citizenship at the University of Virginia.
“He’s never been in this business. He’s been in a scattershot of businesses that have nothing to do with media or communication,” Vaidhyanathan said.
Musk has built a loyal fan base on Twitter. His account is one of the most-watched with 82 million followers, just behind singer Lady Gaga and just ahead of Narendra Modi, the prime minister of India.
But that doesn’t mean he knows much about drumming up ad dollars or attracting new people to Twitter. And that lack of experience could be a headwind for him as he tries to persuade Twitter’s shareholders and directors to accept his bid.
Neither Tesla nor SpaceX, nor Musk’s earlier enterprises such as PayPal, has significant money-making operations in ad sales. Tesla doesn’t even spend much on advertising.
“I think if Elon takes over Twitter, he is in for a world of pain. He has no idea,” Yishan Wong, a former CEO of Reddit, said in a series of tweets Friday.
He said Musk, 50, may be influenced by the internet culture of an earlier era, when fewer people were online and tech company CEOs weren’t being asked to referee major political debates or make world-shifting content moderation decisions — like whether or not to ban a sitting president from the platform.
Musk could scare advertisers
On Friday, Musk’s takeover chances grew slimmer when Twitter’s board unanimously adopted a poison-pill defense, allowing shareholders to buy more stock at a discount which could force Musk to pay an even higher price to take over the company. Still, a pathway to purchasing Twitter is open to Musk if he can afford it, and he has expressed serious interest.
At the conference Thursday, Musk said he would err on the side of leaving up some of the content that Twitter now takes down because it says the content violates its terms of service.
“If it’s a gray area, I would say let the tweet exist,” he said.
But that’s not necessarily how big corporate advertisers think, and they have been a not-so-secret force in recent years pushing social media apps to clean up the content generated by users. In 2020, more than 200 companies participated in a boycott of Facebook, pausing their ad spending and citing concerns about hate speech and misinformation.
“No advertisers want to have their message in the same timeline as anti-Semitism or violence again women. That’s just bad business,” Vaidhyanathan said.