Elon Musk Should Make Twitter a Foundation

Unless you’ve been living under a tree (which means you can’t get Starlink Internet access), you have read that Elon Musk is buying Twitter, to run it as his own business. But Twitter shouldn’t be a business. It should be a foundation.

In the largest deal in history to take a company private, the world’s richest person wants to remake the world’s 280-character digital commons into his own vision of a global speech platform. Depending on whom you listen to, Musk is therefore a free speech champion, a liberator, a sociopath, a philosopher king, a supervillain, or a (self-described) free speech absolutist. And the result of his purchase is that it’s now great to be a conservative on Twitter, or a risk to human rights and personal safety, or we’ll all win,?

After initially adopting a poison pill barrier to fend Musk off, the objections of Twitter’s owners rapidly deflated. The company’s bury-the-hatchet press release touted the unanimous board vote to sell, and quoted its independent board chair Bret Taylor as saying, “...we believe it is the best path forward for Twitter's stockholders.” Twitter founder Jack Dorsey and Musk had apparently previously discussed ideas for taking the company private, and Dorsey rapidly and publicly endorsed the sale.?

Musk's obsession is clear, if not entirely logical. Though it’s only the world’s 7th most popular social media site, Twitter is frequently called the “de facto town square” of the Internet. Overwhelmingly populated by liberal male users, a half billion messages are sent on Twitter each day. Musk himself already has an outsized footprint on Twitter, with more than 83 million follows. (It makes little sense to call them “followers,” when 5%, 15%, or 30% of Twitter users are likely fake, and Pew Research suggests that two-thirds of tweeted links to popular websites are likely to come from bots. But there are still lots of humans in there.)

Much of the media discourse about the sale has focused on Musk’s announced plans for the media platform.? Twitter’s release quoted Musk saying he’s “...making the algorithms open source to increase trust, defeating the spam bots, and authenticating all humans.” He also says he wants to add an edit button. All worthy goals, though nothing new in the years-long discourse about modifications to the platform. Critics say Musk will find that changing publishing algorithms is tricky, and that leaving controversial content up isn’t quite such a simple solution, guaranteed to run up against hate-speech moderation standards in places like the EU. Others worry that Twitter will increase disinformation, become a target for hackers, or become less safe for people living under totalitarian regimes.

But what the quarter-trillionaire says he wants to do with the company today is irrelevant. Any billionaire who doesn’t have outside shareholders can simply wake up tomorrow morning and pivot 180 degrees.?

What’s clear is that he will try to run Twitter as a business. Yet the company has been persistently unprofitable, and doesn’t generate anywhere near the cash that Google and Facebook do. So why doesn’t he just run it as a foundation?

There are two precedents in the Internet arena for this kind of approach. The Mozilla Foundation is the not-for-profit that holds the copyrights and trademarks for the Firefox web browser. Spun out of early Internet innovator Netscape, the Foundation maintains a taxable subsidiary that is allowed to generate income. And when it comes to governance, ICANN — which controls the Internet’s global naming system — maintains an international advisory committee, with a variety of roles to provide input into the way it manages that critical resource.?

Neither of these structures is perfect for Twitter, which today has a straightforward advertising business model. But they show that a critical global resource can be managed through something other than a pure profit lens.

Vox’s Peter Kafka maintains that Twitter has to be a for-profit, saying that because of the debt Musk is taking on “...simply running Twitter as a nonprofit for what he describes as the greater good isn’t an option.” Yet Musk is nothing if not a financial genius. Missing from much of the analysis of his success is that he has consistently leveraged public money for private gain, through electric-car tax credits, NASA money, and solar-panel subsidies. And he doesn’t even have to sell any stock to finance the purchase: He can simply leverage his unrealized stock gains.?

Bankers forgive debt all the time. Musk can convert Twitter into a foundation, place the advertising business in a subsidiary, and put in place a multi-stakeholder governance system. Compared to merging Tesla with SolarCity, that’s a far more simple transaction.

In the Twitter release, Musk says, “Twitter is the digital town square where matters vital to the future of humanity are debated.” If he truly believes that, the best way for him to preserve Twitter’s role in global society is to make it a true commons.

gB