Twitter has certainly been having quite a moment, hasn't it? After a protracted purchasing effort that more resembled a soap opera than a multi-billion dollar business transaction, the world's richest man now owns Twitter. As one of his very first acts, he's fired roughly half of the social media company's employees.
Twitter by the numbers
After spending a little while digging through the company's annual reports for the previous decade, I found only two years where a positive net income was reported. Net income was positive in 2018 and 2019, but negative in 2012, 2013, 2014, 2015, 2016, 2017, 2020, and 2021.
Based on those financial disclosure documents, it looks like the only way the company kept its lights on was ongoing infusions of capital from investors. No wonder when Elon Musk dangled a $44 billion dollar payday in front of them, stockholders fought so hard to be able to cash out and make him honor his buyout bid.
While Twitter has some of the top brand equity of any of the social media networks, its user base is surprisingly small by comparison. Statista reports that Twitter's global monetizable daily active users (mDAU) for the most recent reported quarter hit 237.8 million users.
Looking at Twitter through the lens of its financial reports, there's little to like. It's also clear why, strictly from a financial perspective, the new owner is taking rapid action to stop the bleeding.
Musk's intent is to take Twitter private, which means audited reports like the ones cited in this analysis will cease to be made public, making any performance and profitability metrics far more difficult to ascertain or validate.
The power of Twitter is its short-form messaging. Writing an article can take hours or even days. Writing a Facebook post can be quick, but because the character count isn't limited, there's always the feeling that you're doing actual work writing. But with Twitter, you're dashing off a note, sharing a quick thought. It's almost friction-free.
More so than email, blogging, Facebook, and so much more so than making videos on YouTube, Twitter allows you to get something "out there" instantly and with virtually no effort.
To be clear, I'm not saying that there aren't folks who consider their posts. There are entire agencies of "social media managers" who noodle on their clients' Twitter messaging and strategy almost to the point of ridiculousness.
But most people just post. A US president says what pops into his head at 2am, giving Twitter the most direct line into a national leader's brain the National Archives has ever recorded. A rally attendant tweets about his or her impression of the event. Someone passing an accident or seeing a road closed takes 10 seconds to report on that. Fighters and victims in war zones share what's happening as it happens. A performer suggests attaching a hashtag to tweets to indicate shared experience, and a movement is born.
Twitter is power influencers, real-time on-the-spot news, hashtag collectives, and so much more. It's also rage, hyperbole, misinformation, rants, and unrest. And it's also adorable and ridiculous, with puppy pictures and in-depth reporting of what [insert name here] ate for breakfast.
On Twitter, as on most social networks, you can choose who and what to follow. You can follow hashtags, friends, acquaintances, and people who catch your attention. The cumulative collection of who and what you follow defines what Twitter feeds to you, so if you follow a lot of people who are spewing anger, that's what your feed will look like. If you follow people who share an interest, that's what your feed will look like.
Unfortunately, there's a snag in this approach. Hackers, scammers, those with a political bone to pick and even foreign governments like Russia can post outright falsehoods designed to mislead the Twitter-reading public. As the BBC reported last spring, Russia has at least 100 of these accounts constantly spewing disinformation to Twitter.
That's why any content curation changes Musk introduces into the new Twitter are of such concern. Will he protect users from manipulative falsehoods or amplify them?
Unprecedented disintermediation and reachability
With Twitter, it's not just who you follow and read, it's who reads and follows you. Twitter disintermediates far more than just about every other communications mechanism.
If you have someone's Twitter handle, you can "ear burn" them by including their @handle in a tweet. You can also directly private message them. Companies and brands actively follow mentions using a wide variety of social media sentiment tracking tools, and often provide far better response via Twitter than other mechanisms.
Personally, I recall having a service problem with a vendor and going through normal service channels, only to hit a brick wall, with no response. But after I posted one tweet that included the vendor's @handle, I had an almost immediate response and intervention.
There's also sometimes access directly to influencers, celebrities, and politicians, and certainly direct access to journalists. While many high-profile individuals use social media teams to manage tweet responses, high-profile individuals (like most Twitter users) often look at their Notification feeds and can see comments made by anyone who uses their @handle.
There is, of course, no guarantee of a connection, but I've been quite surprised how easy it is to get into conversations (and mutual followership relationships) with higher profile folks (in my case, authors and directors I fancy) simply due to a well-considered tweet.
But what about the Musk in the room?
Elon Musk is a divisive individual. He would be, merely because of his status as the world's richest man, but he's amplified that by some of his controversial statements and, yes, tweets.
As soon as he took control of Twitter, we saw a lot of sturm and drang among the twitterati and the blogosphere about how Musk is going to destroy Twitter. There seem to be five vectors that describe this fuss.
According to an explainer in Al Jazeera, Musk now owns 9.1% of Twitter stock, making him the social media platform's largest shareholder. While he financed roughly $27B from his own pocket (and sale of Tesla stock), there are other investors as well.
These include Oracle founder Larry Ellison, Prince Alwaleed bin Talal of Saudi Arabia and Qatar's sovereign wealth fund. Loans have been provided by a variety of banks.
One concern, voiced by Chris Krebs, the former director of the Cybersecurity and Infrastructure Security Agency (CISA), is whether these investors will have an outsized influence on Twitter's messaging, content moderation, and anti-disinformation efforts.
Vector #3: Monetization and the blue checkmark
As discussed earlier, Twitter is not a reliably profitable company. With billions of dollars on the line, it makes sense that Musk is attempting to reverse that situation.
While layoffs can cauterize cash flow hemorrhaging, ultimately the company needs to bring more money into its coffers. Prior to Musk's ascendancy, the company introduced a $2.99 per month Twitter Blue program that offered the ability to undo a tweet. Editing tweets was planned, but never was made available.
The famous blue check has always been, ostensibly, to verify to readers that the person tweeting is actually that person. But due to Twitter's capricious policies for granting the blue check, it became a stratification symbol, designating those with blue checks as somehow more important or notable.
Musk intends to grant existing blue checkholders a few months grace period, but eventually will require anyone with a blue check to pay the $8/month fee.
This has incensed many of the blue check nobility, because now anyone will be able to have a blue check. My take on this is that if Twitter does actually verify identities before granting the blue check, then it's serving its stated purpose of verification.
A bigger change is one reported by Platformer. According to the report, Musk may soon decide to put the entire service behind a paywall, requiring users to pay up to keep using it after a few months of trial usage. While anything's possible, I personally don't expect this to happen, because it would immediately nerf Twitter's reach -- and Twitter, as discussed before, is all about reach.
Vector #4: Technical reliability
ZDNET's Steven Vaughan-Nichols has an interesting take on the Muskification of Twitter. Steven claims Twitter will fail shortly. His thesis is "You can't lay off half of the staff of a cloud-based social network and expect things to keep running smoothly."
Steven has a point. Apparently, Musk figured this out, too. Steven reports that Musk tried to hire back some of the fired engineers, which apparently hasn't been going well. As reported, Musk has brought in some Tesla engineers to fill in the gap. But making a car hum is a rather different task than keeping a cloud-based messaging system running.
Clearly, if Twitter fails technically, it will fail as a service. More likely, there will be regular technical breakages until a new team gets fully up to speed and learns to maintain and manage the service.
Will Twitter lose users during its migration growing pains? Well, that depends on just how bad the outages are.
Vector #5: Jumping ship to social media alternatives
Wait. What alternative short-form messaging social media platforms?
So, yeah. There's that. When Donald Trump was banned from Twitter, he first moved to Parler and then set up his own social media service, Truth Social. But according to the New York Times just last week, Truth Social only had about 1.7 million unique visits in September 2022. By contrast, Twitter.com had 7 billion visits in the same month.
In the past few weeks, a few other short-form messaging platforms have achieved some level of public consciousness.
My friends in the press seem particularly interested in Mastodon, which is a distributed, open source platform. ZDNET's Ed Bott wrote a tutorial about how to get started with Mastodon. But just a few days earlier, Ed wrote "There is no social media alternative," in an analysis he posted on Substack. In it, he talked about how much of a hassle it was to sign up for Mastodon.
There's just not that much interest in alternative services. I did a Google Trends comparison of Twitter against four other services. Those services barely showed up as rounding errors.
Fundamentally, Twitter is Twitter, and everything else isn't.
Why I'm not deleting Twitter (yet)
This article is titled, "Why I'm not deleting Twitter (yet)," and that title reflects my sentiment. I use Twitter to reach out to my readers, and for them to reach out to me. Until and unless it becomes a ghost town, I see no reason to leave it.
If I don't want Elon Musk (and his opinions) in my feed, I don't have to follow him. And I don't, so he isn't.
For me, the benefits of the real-time zeitgeist, the powerful disintermediation, and the ability to have short chats with my readers is still quite valuable. I see no reason to turn my back on an audience I've spent a decade building up.
But that could change. If, as SJVN predicts, Twitter isn't able to maintain technical operations, that will be an issue. If the entire site goes behind a paywall, and most of my readers don't sign up, that could be an issue. And, if it turns into some kind of nasty cesspool of trolls that I can't keep out of my feed, that could be an issue.
So far, I don't see that happening. So far, Twitter is still Twitter. If you want to see posts about my latest articles, my somewhat regular posts about pop-culture science fiction, or my ongoing commentary about the virtues of coffee, keep following me at @DavidGewirtz. Feel free to comment on Twitter. I usually reply (or at least drop a heart icon).
What do you think? Are you quitting Twitter? Have you picked an alternate social media service? Let us know in the comments below.