Elon Musk bought Twitter for cash
consideration of US$ 44 billion, paying $54.20 per piece. After months of legal
tussles, deal was finally sealed in October 2022. Musk announced that he plans
to promote free speech and create open algorithms to showcase transparency. In
his investor pitch, he made tall claims to increase annual revenue from US$
5 billion in 2021 to US$ 26.4 billion in 2028. He further anticipated the
user base to grow from 217 million in 2021 to 931 million in 2028.
However, to realize his vision, he has resorted to aggressive measures like job
cuts and charging customers for verified accounts, attracting a strong public
backlash and co-ordinated trolling attacking by resentful users. This post
attempts to lay down a summarized view on steps taken by Elon Musk to remodel the
business
1) New
appointments and series of layoffs: Musk has handed pink slips to 50% of
Twitter’s staff in order to drive cost efficiencies. His acquisition of
Twitter has led to interest bill of US$ 1 billion which makes it imperative for
him to cut costs on a war footing. Additionally, being the sole director of
Twitter, he has also dissolved the board and fired series of leadership
including CEO Parag Aggarwal (CEO), Ned Segal (CFO) and Vijaya Gadda (Head
of Legal, Policy and Trust). Furthermore, he has also brought in team of
associates as enablers to grow the business including his personal attorney and
tech investors
2)
Setting the table for a stream of
recurring revenues: The users of verified accounts will have to pay US$ 8
per month to keep the blue tick (sign of a verified account) next to their
name. With this, Twitter will attract a slew of recurring revenues of US$
40.3 million annually and is expected to reach above US$ 400 million as of 2028
(Assumption: 0.2% of total twitter user base consists of verified accounts;
This figure is expected to reach 0.5% as of 2028)
3) Additional
features: Musk wants to transform Twitter’s user interface into different
customized versions across customer preferences. He has backed a user
suggestion wherein one of the versions can include a conducive space for organized
debates and spats (only for verified users). Additionally, he also
wants to include user feedback to Twitter posts in form of ratings.
4) Revival
of Vine?: Vine was six-second-long video sharing application, which was
acquired by Twitter in 2012 and later discontinued in 2016. Elon Musk conducted
a Twitter poll for a consumer opinion on whether he should revive Vine or not.
The poll results concluded with 70% of respondents in favour of the Vine
comeback. However, Musk needs to evaluate this decision, considering a
fierce competition from the existing giants: Tiktok and Youtube in this space
5) Transforming the application into a super app: Lastly, Musk plans to transform the social media platform into a super application. In future, Twitter can also include features like instant messaging and digital wallets (Elon Musk can bring his core expertise from his initial ventures – Paypal, a digital wallet). Furthermore, he also wants the platform’s algorithm to be open source, making way for public review and modification. Furthermore, he desires to chart a blockchain-based future for Twitter wherein users can add their messages to the blockchain for a small fee which can insulate the posts from bots and spams.
* ThThe opinions expressed in the article are personal and do not represent the opinions of the organization I work for *
