Saddled with a pile of debt and swimming against the current on the 'social' part of being a social network by trying to hyper-aggressively monetise the 'blue check' - what path forward do you see where Twitter actually emerges in a stronger position 5 years from now?
I see the blue check thing like cosmetics in online gaming - the average person will moan about it but there will be enough whales who see $8/mo as loose change.
Thoughts?
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I imagine there are a lot of clout chasers who will pay the $8. Seems like a money making idea to me. Elon Musk is pretty good at making money lol
I can't help but feel like Twitter's previous C-level team were either a) idiots, b) deliberately acting irresponsibly/against the interests of the shareholders in pursuit of their own personal political persuasions (mission-driven leadership letting the power go to their head), or if you're more conspiratorial c) at the direction of the US & other governments using it as a tool for narrative control and not even attempting to run it as an actual business (we already had the Zuck go on the largest podcast in the world and admit the FBI pressured him on certain issues).
At its core Twitter is a software company, so there was 0 reason for it to have as much staff as they did in non-core product engineering functions - literally thousands of people dealing with various forms of moderation, content curation, a "human rights" division (wtf?), hundreds of developers who were working 30-40 hour weeks at most (in some of cases less while collecting 6 figures!), all while being obscenely behind the curve in functionality (look how it took for us to get the ability to edit a fucking tweet!). It was a perfect case study example of corporate bloat and lack of innovation that was trailing aggressively behind its peers. He claims that the company was losing $4m a DAY (much worse than their earnings indicated, quick glance at Yahoo finance shows TTM earnings as -$112m) - absolutely ridiculous to let it get to that point when they have been profitable in the past. Just slashing staff by ~3,700 (nearly half) he's putting a huge dent in that.
Twitter has ~290m active users, ~400k of which were verified prior to letting anyone have the option to pay for the privilege. I think it's safe to assume almost all of the verified ones can afford to keep it for less than the cost of a Netflix subscription, especially when you consider the benefits that come along with it + how many of these people are basically addicts at this point and crave the perceived status of the blue checkmark. But lets say they see 30% attrition from that because people are so offended by Elon's extreme right wing idea of free speech, so 280k * $8 * 12 = $26.9m/yr. Drop in the bucket. But how many of the other 289.6m do you think would also be willing to pay to verify themselves? 0.5%? 1%? 2%? Let's say best case scenario which is knocking it out of the ballpark is 5%.
Even just the 0.5% conversion when you account for the staff cost savings makes Twitter instantly profitable going off the #s in their statements. I am of course making the assumption that advertisers don't pull out - which some have threatened I'm sure inevitably will - but even if they do momentarily I don't believe they will stay away for long. Too many people are on Twitter. Ad rates for FB have steadily climbed while their actual conversions in many areas have decreased and it's now both losing users and facing a slowdown in engagement from the ones that remain. Twitter on the other hand is still growing and with the promise of less biased moderation from leftist ideologues I would expect it to see even more growth. Whale advertisers don't give a fuck about what some random Q-tards post about to all 10 of their basement-dwelling followers, they want to get the most bang for their buck in terms of impressions. Just look at some of the shit advertisers get plastered next to on YouTube. Money talks, and all these instances of "get woke go broke" have shown that the activists don't have the money to back up their bark, they just rely on people being afraid of being canceled but they've since cried the "racist/bigot" wolf too many times.
This isn't even beginning to touch on other avenues for monetization, the most obvious of which is payments - Elon is part of the PayPal Mafia and Jack Dorsey founded Square (now Block). Both of them have expressed interest in open networking with blockchain protocols and integrating crypto payments with social media.
Twitter was and is an absolute goldmine for ancillary services but goons like Parag Agrawal and Vijaya Gadde refused to capitalize on that, instead choosing to focus on "misinformation" coming from one side of the political isle. They should be sued into oblivion and robbed of their golden parachutes for the destruction in shareholder value that happened under their watch IMO. I would bet Elon turns this into a success unless he manages to run afoul of Apple & Google somehow and gets removed from the app/play store, which is totally possible and would completely bury everything outlined above in a pile of 💩.
I was curious about Twitter's personnel costs so I looked at their 2021 10-K. As far as I can tell, salaries/benefits is not reported anywhere as it was being comingled with general operating costs. To me, that's a red flag with respect to personnel costs--the fact that it's not readily apparent what they are paying people.
Payscale puts the average salary at $118k which makes sense given most of these people are in SF, so ~436m in annual personnel costs slashed overnight.
Or they believed that the future of the platform was as an online social forum, and understood that banning hate speech was the best way to maintain the largest possible user base. Or looking ahead to the idea that if they didn't clean up their own act by moderating content and hiring staff to carry that out, they'd be supplanted by another Twitter-like platform or subjected to invasive governmental regulation. You can do all the math in the world about numbers, but at the end of the day Twitter's relevance and profitability are directly tied to the number of active users (or potential active users). If Twitter is just a place for women and people of color and liberals to be harassed with hate speech from some petty right wing troll, then they're going to leave and get their "news" elsewhere. This doesn't seem like such a tough concept to understand, to me. If I owned a store I wouldn't want someone flinging literal shit at every customer who tried to walk in the door.
And why anyone is assuming the outgoing C-suite team are "idiots" and Mr Musk is a genius is beyond me. If you want to be cynical, apply it equally. As far as I can tell, Mr Musk overpaid for a company that he tried to buy out of pure spite, immediately saddled himself with what will certainly be many millions of dollars of wrongful termination lawsuits that a five year old would have known to avoid, and now realizes he doesn't have the staff to run the company he bought and is asking them to come back. And that's ignoring the hilarious hypocrisy he's demonstrating when it comes to banning accounts despite his "free speech" ideas.
LOL, you forgot to adjust for the crushing interest expense of the buyout debt and the Musk-induced flight of advertisers.
If everyone is super no one is - Syndrome. The blue check meant something a few weeks ago because of exclusivity. Now anyone one can have it for 8 bucks, sounds worthless to me. You think people pay for LinkedIn premium for the gold IN? Fuck no they do it because:
I attended a cryptocurrency/NFT conference a few weeks ago. The topic of Twitter came up. It was their understanding that Twitter was going to also become a payments platform, especially for crypto (I want to say Forbes had an article on this in the summer). Seems like a decent idea given the size of the existing user base.
With respect to the $8, I have no flippin' clue if that will work or not, and my initial reaction was a guffaw at the proposal. But the idea behind it is that if you have a blue check mark, your voice will be amplified and you'll get "priority in replies, mentions, and search." Given that the overwhelming majority of Twitter users don't actually tweet, I can see the advantage of paying for amplification among those that do tweet. I follow the Daily Wire guys on Twitter, for example, and the whole team of 6 (Klavan, Shapiro, Knowles, Owens, Walsh, Boering) would get "priority" and amplification for $576/year. That's a no-brainer price tag for that team. Frankly, it's cheap.
I'm all for optional add on services that bring Twitter into healthy profitability, but I don't like how Elon has been completely ambiguous about his new proposal. He's gone on twitter wars with random fucks defending the fact the $8 isn't much while remaining completely silent on the underlying issue, which is proof of identity.
What was the verification criteria for the current blue checks and will that process and rigor be maintained moving forward? While I think the likes of A-list celebrities are probably safe, I wouldn't want to be a creator with a few million followers doing or saying anything remotely controversial if all it takes is a fucking troll with $8 to make a dupe account and impersonate me. I see that as a massive risk. Twitter is NOTHING without it's top ~5% of most popular users and this poorly communicated plan puts them all at risk.
Because Mr Musk doesn't really give a shit about "free speech" and certainly doesn't care about it when it is billions of his dollars and most importantly his identity as a savvy businessman at stake.
The idea that he had a vested interest in "fighting censorship" or whatever other bullshit argument he was making was patent nonsense from the word go, and certainly won't be true going forward. Mr Musk is looking to set up a scenario in which he can blame "cancel culture" for his failure and thus shift blame for his terrible business acumen to someone else, or to take credit for a short term boost in Twitter's prospects at the expense of it's long term viability... just like most CEOs.
The blue check mark verification was already being abused by Twitter staff. There are reports from people that Twitter staff under the old regime were taking bribes as high as $15,000 to verify people and they they would take months or years to verify conservative accounts (e.g., Jeremy Boreing).
There is this bizarre idea that Twitter was run clean as the driven snow under the old regime and now it’s very bad. It’s ridiculous and detached from reality.
Wasn't the whole point of the blue check mark to ensure that the people who had something of value to say (or better said, people who were perceived to have something of value to day) were being elevated slightly above the crowd of less active users? One of Twitter's main problems, whether Elon Musk wants to admit it or not, is that there are legions of people using the platform to engage in pretty toxic hate speech, or to spread deliberate misinformation. Twitter began moderating/banning those accounts because their presence threatened to drive large amounts of traffic off the site as people became fed up with having every thread invaded by trolls. If you allow those very same people to amplify their voice for some nominal amount of money, you'll drive users away even faster. When Twitter moderated certain content they weren't pushing some political agenda, they were making an intelligent and clear-eyed decision about how to maintain the largest number of users.
The problem for Mr Musk is that his stated agenda of giving a forum so that anyone can say anything without fear of consequence (unless, of course, you are mocking Mr Musk, in which case "censorship" seems to be the rule) is diametrically opposed to having a business that is a going concern. It's why Parler is a dumpster fire of a platform - no one has any interest in discussing politics over there, they just want to get in someone's face and scream and cause a reaction. Letting those people run wild on Twitter will just slowly turn Twitter into Parler.
I’m skeptical of how things will work out.
Heard anecdotally that they’re likely losing 25% of ad revenue right now from someone in the ad business.
The $8 a month just doesn’t fill that gap - paid social media has been tried before and it never works. There’s too many free options for 99% of people, and I just don’t see the average twitter user shelling out $100 a year for a badge. I’m sure all the power uses monetizing their twitter followers will buy it, but even if we say that’s a million users (feels very high), that’s
The interest on the debt is $1b a year, and even these headcount cuts won’t be enough to cover that.
There’s some very deep pocketed, smart investors involved here so I don’t think it’s going to 0, but wouldn’t be surprised if it needs a cash infusion at some point.
They just need to limp to an IPO in 3 years once the market turns back and it’ll make money, question is just if they can meet debt covenants until then
I like the online gaming comparison but I would say the difference there is that the small % of people who do spend money in cosmetics in online gaming spend a lot. I done some work for an gaming company during covid and something like 50% of the revenue comes from 0.2% of the customers.
The problem with the Twitter model is that no matter how enthusiastic and willing to spend that small proportion of people who buy the blue tick are, they will still only be paying $8 per month.
Twitter is actually going to be profitable for pretty much the first time ever.
Musk isn't even remotely a controversial figure. He's only controversial to the 15% of the country that is far-left. Musk is a freaking Obama-backing and Obama-financing liberal Democrat electric car and solar panel manufacturer who doesn't like Donald Trump one bit. He's only "controversial" because he's held the opinion of every liberal Democrat going back to the 1950s--that free speech is a good thing. And this position is utterly loathed by mainstream media and many woke activists that have gained power within some large corporations.
ehh, I think a lot of people have been turned off by his behavior. Obviously a personal anecdote, but my friend group that ranges all across the political spectrum thinks he is an idiot and attention whore. Anyone that also spends this much time on twitter or social media in general is not a healthy individual. I also highly doubt he works as much as he claims to given his twitter use.
Regarding free speech if you are running an advertising business- that's what twitter is you cannot have a free for all on content, advertisers will balk and then you're left with my pillow and latest garbage token crap. EU will also have a big say in how twitter will operate, Musk already acknowledged as much.. and they won't tolerate no moderation.
Seriously this is the take of someone with far left views that fashions themself as a moderate because they believe they are in the middel but don't even know where they are.
Pot calling the kettle black.. perhaps you don't realize how far away from the middle you are. You definitely don't espouse average views based on your comment history.
You don't have to be a leftist to not like Musk.. maybe having a common sense of decency is enough, something that of your ilk don't seem to realize.
I just deactivated my account when the CEO starts telling people who to vote for. It time to move on.
Ok, bye
My Twitter account.
Cringy (Not the part about you deactivating your account)
My take is that the Twitter deal will not be successful, as advertising revenue is probably going to decline substantially. There are probably lots of advertisers who will not be comfortable with Musk's version of free speech. Also, who the fuck is going to pay $8 per month for tweets. I do not even wants to see Tweets for free.
Whales that can afford $8 a month?
Why are we all pretending.....$8 is literally nothing. to everyone. basically any american can easily afford $8 a month and never know the difference.
I'm surprised it isnt more. $96 dollars a year.....I spent more on potato chips this year than that and i dont eat carbs
You can eat potato chips. What can you do with a blue check mark? Impersonate celebrities?
My favorite meme is the wojacks grinning over $8 coffee but crying over $8 twitter.
Yes, there is a way forward. Twitter was alienating its userbase, censoring everyone that went outside of the far left narrative, and was generally promoting low quality content. Oh, they also had an incredibly bloated and likely untalented workforce leeching profits away.
Elon is smart and motivated. The Company outlook appears much brighter now than it was 6 months ago
Did WSO hire the recently laid off Twitter censors? Half this thread is censored. Twitter's primary censorship is related to trans issues, so any topic mentioning Twitter and its new censorship regime has to necessarily mention trans issues.
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