Twitter is crashing, will it be able to recover?
It has been several months since Twitter was acquired by Elon Musk, and the social network has undergone profound changes, not least of which is the exclusion of third-party applications, which allowed end user to use Twitter without been continously overwhelmed by ads.
It is undeniable that, compared to what it was less than a year ago, Twitter has changed in a confusing and radical way, and not all of its users are happy about it.
Twitter before Musk’s acquisition
Before the advent of the Musk era, Twitter was an anomaly compared to the more traditional social networks such as TikTok, Snapchat, Instagram, Facebook.
Twitter is the only social network where you can find the President of the United States and the Pope.
Its micro-messaging structure, organized in a continuous stream of information, has made it the place to comment on real-time events of any kind.
If there is an earthquake, there is a tweet that says where and when it happened.
If your national football team is winning a World Cup match, be sure that hundreds of people will be commenting on it on Twitter.
If something happens in the world, the first place where the news will be proposed (and commented on) will be Twitter.
This type of setting, combined with the fact that Twitter is mainly a text and image-based system, has made it unappealing for private companies.
Companies, in fact, cannot express their marketing potential in 280 characters and have focused on more visual platforms such as TikTok and Instagram.
Despite everything, in over 15 years of activity, the social network has created a community of over 200 million people (not gigantic but not negligible) and monetizing it has been the worry of those who had managed Twitter until the arrival of Musk.
Like all social networks, Twitter has its bills to pay, both in personnel and in hardware systems. And the classic way that all social networks use to finance themselves (profiling and advertising) is not easily applicable to Twitter. Until recently, Twitter was primarily financed by inserting advertising messages between tweets, but this was not sufficient and Twitter (as of March 2021, before Musk’s acquisition, the company’s debt was around $3.45 billion).
In this situation, the $44 billion acquisition by Musk, could not have brought anything but joy to Twitter’s shareholders (at the time Twitter was publicly traded), but they were certainly not interested in what Twitter would become in the hands of the new CEO.
Twitter after Musk’s acquisition
Musk’s arrival was disruptive.
Those who were expecting an enlightened CEO who would listen to user demands (such as the edit button, for example) and a more concerted effort to fight the discrimination and hate that unfortunately pervade the platform, have been greatly disappointed.
Musk has a debt of $44 billion, which matures, in effect, $2 million in interest per day.
Like any entrepreneur, his first (and perhaps only) goal is to make money, not lose it.
Driven by this single mantra, he has made shocking choices but, from his perspective, necessary:
- He reduced Twitter’s workforce by over 70%, with a massive wave of layoffs.
The cuts were across all sectors. Developers, press office, moderation offices on fake news, on COVID, on hate within the platform were swept away in less than a month.
And, though from a technical point of view the platform held up, from a management point of view it was total chaos - He tried to monetize as much as possible, acting in a confusing manner and sending misleading messages to both users and investors.
In less than a month, after acquiring Twitter, he launched a subscription to acquire the blue checkmark (a label that, until before the acquisition, was only released by Twitter to people who were verified by the platform’s offices, to distinguish real users from those posing as them) which caused image damage, but also economic damage (a user, with the purchased blue checkmark, posed as the pharmaceutical company Elli Lilly stating that from that day they would market insulin for free, causing a stock market crash of the same company) - He reactivated accounts on Twitter that had been closed for issues of hate and violence incitement (including that of Donald Trump) only to re-close them when they had again incited racial hate.
- Most recently, he blocked unofficial Twitter apps because they do not display advertisements and therefore are a potential loss for the platform. Even in this case, the choice was made in a sneaky way because no announcement was made on the matter leaving users and app developers awaiting a fate of which the outcome is unknown
While from a business perspective one can understand the reasoning behind certain choices, the way in which these choices are made, the timing, and the neglect in handling sensitive issues (especially letting go of those who were skilled in handling these issues) have raised serious doubts about the platform’s stability.
This instability has turned into uncertainty among Twitter’s traditional investors, who have decided, some temporarily and some permanently, to suspend advertising on the platform, creating an even more dire situation for the platform itself.
There have been recent reports that Twitter’s Singapore offices have been closed due to unpaid rent (although officially it has been announced as simply a cost-cutting measure) and there are rumors that the Los Angeles offices may also be insolvent.
Twitter Today
What is Twitter today?
Without a doubt, it is a social network that is transforming from an atypical product to a bloated platform:
- Infused with advertising with a single point of access that forces the user to view it (eliminating third-party clients)
- loaded with debt and with a bleak outlook given the recession expected this year (despite the impressive cut in workforce and constant attempts to reduce costs)
- in search of its own identity, made in the image and likeness of its current CEO (Musk says everything and the opposite of everything about the platform’s technological innovation on a daily basis. As of now, any technical and corporate policy decision must be vetted by him personally before it can be implemented)
From the perspective of the users, I don’t think there is the perception of what is happening on the platform, for 90% of the users nothing has changed.
For those of us who have seen this social network born and grow, today we see great confusion and a desperate attempt, by Musk, to recover the money of an investment that, perhaps, he did not even expect to be so disastrous.
Despite the announcement of seeking a new CEO to take Twitter forward (and it will not be easy to find someone to step on a sinking ship), Elon Musk is dedicating heart and soul to forge Twitter in his own way, but with disappointing economic and technical results so far.
One wonders, in light of the deep changes of the last year, if Twitter will be able to find its new identity and maintain its user base.
The signs are not all positive. The alternative network to Twitter, Mastodon, since Musk’s acquisition has seen a steady increase in its users, tired of Musk’s diva behavior, and today it counts 8 million users, far from the 200 of Twitter, but still a sign of discontent.
Furthermore, some companies like General Motors, Volkswagen, Audi and Pfizer have suspended advertising on Twitter and have no longer invested in the platform.
It must be said that Elon Musk has also been able to perform magic from an entrepreneurial point of view:
- SpaceX rockets were not even taking off at the beginning of the acquisition and now the company is the only private contractor of NASA
- Tesla has been radically transformed to be the pioneering company for autonomous driving and fully electric cars.
Although it is no longer the market leader today, for years we have seen car manufacturers chasing what Musk had already done here.
The question remains if he will be able to make magic in this sector too, although the initial impressions are certainly not the best.
