What next for Twitter?
It’s been over a month since Elon Musk bought Twitter. In that time a lot has happened yet little feels like it has materially changed. Following large layoffs of staff, the chaos of an aborted attempt to introduce paid for verification via Twitter Blue, and Musk’s failed attempts to lure Donald Trump back after unbanning his account, for now at least using Twitter feels much as it did prior to 27 October. With that, the same challenges and questions remain. What might happen next with Twitter?
The biggest concern is how the company makes money. To date, advertising revenue has been the main source of income. While Musk attempted to create a new revenue stream with Twitter Blue, there appeared to be little appetite for it beyond impersonation accounts. Following the early aborted attempt Twitter is relaunching it this week but it’s yet to be seen how many people will be willing to pay.
The initial chaos understandably spooked companies, with Twitter reportedly losing half of its top advertisers, which will have drastically hit the company’s income. In 2021 Twitter generated $5bn of advertising revenue, and was projected to increase this to over $9bn in 2026. This now looks unlikely to say the least as it faces the challenge of even getting back to 2021 revenues and convincing advertisers to return. Companies are likely to be cautious in returning given the controversies surrounding Musk, and compounding this is competing platforms. If advertisers shift their ad spend elsewhere, and TikTok is adding extra competition for all platforms, it might be hard to win back companies and restore revenue that had been built over years.
Free speech has been a major driver for Musk and the source of much of advertisers’ angst. Having cut back the content moderation team and reinstated accounts of the likes of Donald Trump, Kanye West and Jordan Peterson Musk’s intentions are clear, yet history could repeat itself. It took a long time for Twitter to ramp up its content moderation and place warnings on misinformation, with COVID-19 misinformation being a turning point. Jack Dorsey long took a relaxed approach to content moderation and defended free speech before realising the dangers of an anything goes approach, and it could be argued Musk is already discovering the same having re-banned Kanye West. His current position could be one he struggles to hold.
Finally there’s the platform itself. In recent years Twitter has tried a number of new features with varying degrees of success including Fleets, Super Follows, and Spaces. Even before Musk’s acquisition, there was a balance to strike for Twitter between maintaining its original character and trying to engage and attract more users. Might Musk risk changing Twitter’s character? He has announced that Twitter will be introducing the ability to add long-form text to tweets. While it could be argued this risks losing the short, sharp nature of the platform it is a natural answer to something users are doing anyway by screenshotting notes as Musk says. How this works in practice is somewhat unclear, there is a big difference between long-form attachments as Musk originally tweeted or a big increase in the character limit as he has recently teased. He has also promised improved search functionality, and back in April polled users whether they want an edit button. Twitter has since started rolling it out to some verified and paying users (if you see a tweet with a pencil icon it means it’s been edited). Musk’s willingness to experiment is clear, and expect him to stay true to his word when he says Twitter will try “lots of dumb things” and keep what works.
Whatever happens with Twitter in 2023 expect it to be eventful.