For many users on social media platform Twitter, this week’s announcement of SpaceX and Tesla CEO Elon Musk’s acquisition of the company brought hope for positive change in an ever-escalating climate of censorship seen since 2020.
And the change appears to be real as countless reports of accounts being unbanned, right wing users — who have long complained of being suppressed or shadowbanned — noting a sometimes massive uptick of new followers, and obvious changes in the frequency and quality of content being curated by the platform’s algorithm being observed.
But the question remains for what lies ahead. Not only is Musk’s $46.5 billion purchase provisional on regulatory approval, but it contains a clause where if the deal is not finalized by Oct. 24, parties have the option to exit.
However, an April 27 Reuters wire stated that the contract also requires Musk to forfeit $1 billion if he doesn’t complete the purchase for any reason, including if his financing arrangement with Wall Street falls through.
According to The New York Times, Musk is only putting up $21 billion of his own cash in the deal, having secured $13 billion in debt financing and $12.5 billion in loans backed by Musk’s personal Tesla stock holdings through Morgan Stanley and a “group of other lenders.”
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Reporting by The Epoch Times added that, although Twitter will also have to forfeit $1 billion to Musk if the deal collapses on their side, the Board of Directors is still bound by a fiduciary responsibility to consider, and even approve, any counter offers at a higher price, noting that Musk will still have the opportunity to increase his bid in response.
This is not the first time that Twitter has had to contend with a potential purchaser. In 2016, the Board of Directors of The Walt Disney Company told then-CEO Bob Iger that he could move forward and purchase the platform, but Iger opted not to pursue the opportunity.
Iger wrote in his 2019 memoir The Ride of a Lifetime, that although Twitter was a “potentially powerful platform for us,” the executive lamented “the challenges that would come with it.”
Iger listed items such as “how to manage hate speech, and making fraught decisions regarding freedom of speech, what to do about fake accounts algorithmically spewing out political ‘messaging’ to influence elections, and the general rage and lack of civility that was sometimes evident on the platform.”
“Those would become our problems. They were so unlike any we’d encountered, and I felt they would be corrosive to the Disney brand,” he concluded.
Iger’s insight into the company’s challenges rings true today and the problems that he decided not to contend with are now fully in the lap of Musk and threatens to tarnish Musk’s own personal brand.
Musk, an avid Twitter user, faces an uphill battle to implement the changes he has hinted at over the past weeks.
Currently, Twitter makes the bulk of its revenues from ads, which accounts for more than 90 percent of the company’s $1.567 billion in revenues, according to a Q4 2021/FY2022 letter to shareholders.
Additional revenue streams are associated with data licensing and other services.
Musk, in a now deleted tweet from early in April, proposed advertising should be removed for Twitter’s premium Blue users, a move which would seriously undermine this revenue stream.
Musk has also hinted at making Twitter a subscription service, charging a nominal fee of around $3 per month.
The idea has been raised several times over the years, but for unknown reasons never took hold.
In 2020, speculation surrounded a mysterious internal project at Twitter codenamed “Gryphon,” which appeared to relate to the company building new subscription services.
At the time then-CEO Jack Dorsey emphasized that any potential subscription service would be available alongside the platform’s free services.
Musk is set to face similar challenges in this area as past operators of the platform did. It remains unclear if enough users will be willing to pony up a monthly fee, even if it is in the single digits.
Trump, Truth, and freedom of speech
While it is yet to be seen whether or not high profile banned users such as former President Donald Trump will be allowed to return under Musk’s reign, it’s a definite possibility based on the CEO’s very publicly stated pro-free speech stance.
On April 27, Musk tweeted, “For Twitter to deserve public trust, it must be politically neutral, which effectively means upsetting the far right and the far left equally.”
On April 26, the Chief pinned a new tweet to his profile page, which states, “By ‘free speech’, I simply mean that which matches the law. I am against censorship that goes far beyond the law. If people want less free speech, they will ask government to pass laws to that effect. Therefore, going beyond the law is contrary to the will of the people.”
However, immediately following the news, Trump said, “I am not going on Twitter. I am going to stay on Truth. I hope Elon buys Twitter because he’ll make improvements to it and he is a good man, but I am going to be staying on Truth.”
Trump was deplatformed following the Jan. 6 riots with Twitter citing the “risk of further incitement of violence” as the pretext behind removing the then-sitting President of the United States.
Prior to being removed from the platform Trump had some 89 million followers.
The hype Musk has brought Twitter has benefitted Trump as well. The former President’s new Truth Social platform, a Twitter clone set to come out of beta shortly, has rocketed to the number one position on the Apple App Store.
Analysts noted this is the first time Trump’s new endeavor has enjoyed such popularity, even after a February launch that saw highly limited access to new users.
It remains to be seen whether other big names banned from the platform have any interest in returning despite the change in ownership and Musk will also have to deal with the blowback by legions of Twitter users who supported the bans in the first place.
A battle of attrition
With a change of leadership at the company being all but guaranteed, employee attrition is expected and may be a major challenge for Musk in an environment where digital skills are highly sought after.
According to CNN, at an all-hands meeting on April 25 with CEO Parag Agrawal and Board Chair Bret Taylor, Twitter staff raised concerns over employee retention and attrition.
Agrawal responded to workers’ trepidation, acknowledging the events are “indeed a period of uncertainty.”
The current CEO delivered the message that, “If we work with each other, we will not have to worry about losing the core of what makes Twitter powerful,” which Agrawal defined as “all of us working together in the interest of our customers every day.”
Many Twitter employees appear nonetheless to be on edge. According to the Daily Beast, after news of Musk’s acquisition was made public one employee tweeted, “In need of a stiff drink.” The tweet has since been deleted.
Eddie Santos, a machine learning engineer tweeted, “I can admit that I’m anxious about the whole thing,” adding that, “We’re all excited about the product and want to better it to make everyone feel heard and empowered in a way that betters humanity.”
While another joked, “Can someone just tell me if I’m rich or fired please.”
As those displeased with the change of Twitter’s guard have made their voices heard, various governments have also cast an eye at Musk’s purchase, but nobody appears ready to yet intervene.
On April 27, FCC Commissioner Brendan Carr issued a public statement, rejecting a call from the Open Markets Institute to directly block the acquisition, stating that the FCC “has no authority to block Elon Musk’s purchase of Twitter,” adding that “to suggest otherwise is absurd.”
Carr added, “I welcome the full FCC making it clear that we will not entertain these types of frivolous arguments.”
Meanwhile in Europe, EU Internal Market Commissioner Thierry Breton told Financial Times that he wanted to issue Musk a “reality check.”
Breton stated, “We welcome everyone. We are open but on our conditions. At least we know what to tell him: ‘Elon, there are rules. You are welcome but these are our rules. It’s not your rules which will apply here.”