When Elon Musk made a nearly $3 billion investment in Twitter on April 4 who knew the hyperbolic reverb chamber would eventually become louder than ever imagined?
It all seemed to happen in an instant. Musk went from potentially joining the board to launching a hostile takeover.
It was uniformly agreed that the Twitter board would reject the takeover offer and trigger a poison pill defense; a defense tactic that is triggered once a hostile bidder owns 10 percent of the company stock. This maneuver allows shareholders—apart from the hostile shareholder—to buy shares at a discounted price, thus diluting the hostile shareholder’s original holdings, and (hopefully) detouring the hostile takeover.
But then the tone shifted. Twitter had agreed to accept Musk’s offer. Rumors swirled around the change of heart, evening suggesting that Jack Dorsey embraced the idea of the takeover.
On April 25 Dorsey tweeted: “The idea and service is all that matters to me, and I will do whatever it takes to protect both. Twitter as a company has always been my sole issue and my biggest regret. It has been owned by Wall Street and the ad model. Taking it back from Wall Street is the correct first step.” Dorsey continued, calling Twitter “the closest thing we have to a global consciousness.”
Maybe Musk made the right move at the right time, after all, he has 85.5 million followers on Twitter and his companies, specifically Tesla and SpaceX, are constant topics on the platform.
But what about the business? How can Musk make Twitter more profitable?
While he is a prolific Twitter user, he is also a critic. He has shared his many issues with the platform and there are a number of maneuvers he can institute immediately to make Twitter more profitable.
To begin with, Musk can trim the corporate employee base and transform Twitter into a leaner operation.
He can also impose monthly subscription fees and charge users to verify their profiles. Bonafide individuals from celebrities to business leaders are unable to be verified but yet others are verified quite easily. Isn’t the point of verification so Twitter users can verify that the person’s tweets they are following, retweeting and liking are authentic?
Another idea: Musk can better curate advertising and ink media streaming deals, from sports teams to marquee scripted content, but do so in an authentic manner versus the typical ad model. Musk can sell access to Twitter to the right brands at a premium.
Then you have the algorithms. Musk could bring forth a new era of algorithm interest groups by focusing on Twitter‘s algorithms and machine learning patterns, and allowing others to review the processes and decide whether or not certain algorithms applied to user accounts are biased. Musk can even open source Twitter’s technology, though the effectiveness of an open-source Twitter is still debated.
Regardless, Walter Issakson, author of Musk’s upcoming biography tweeted on April 26: “Late last night, after winning his battle for Twitter, @elonmusk was in Boca Chica and held his regular 10 pm meeting on Raptor engine design, where he spent more than an hour working on valve leak solutions. No one mentioned Twitter. He can multitask.”
Truthfully, it has been remarkable that Twitter has kept such a high market capitalization ($37.58B as of 2:52 PM April 28) while being disengaged and often disenchanted with its core business. Like him or not, Musk can change that. Twitter desperately needs change and he will usher in a new era of decision making, ultimately leaving the world’s town square a profitable and unbiased bastion of free speech.
