Twitter (TWTR) is officially Elon Musk’s company. The CEO of Tesla (TSLA) returned to his favorite social network on Thursday after months of back and forth that saw Musk try to buy the platform, then back off and finally agree to buy it again.
Now he must prove that he won’t turn Twitter into an even bigger wasteland of anger, hate speech and misinformation than it already is. Musk told advertisers on Thursday He does not want the site becomes a “hellish landscape” and that he wants advertisers to stick around. But if it can’t deliver on that promise, the site could lose its advertisers and user base and morph into another irrelevant app like MySpace.
“I think a lot of people say, ‘Look, if this place is going to be hell, I’m going to leave. But I’m going to give it a chance to prosper,’ explained Eric Talley, a Columbia Law School professor and expert in corporate law and in governance.
But as one of Twitter’s most prolific posters and trolls, he’ll have to live up to his word that he wants the platform to be “warm and welcoming” to everyone.
“Elon Musk starts out as a CEO with a significant confidence deficit,” Mike Proulx, research director at Forrester, told Yahoo Finance. “He has work to do to undo the damage that was done during a very public and dramatic acquisition process and among Twitter’s stakeholders. And by that I mean Twitter’s employees, its users and the advertising community.
The easy part is over
Musk spent the seven months trying to buy Twitter and then fighting to get out of the deal. Now that he’s formalized the $44 billion deal, Musk needs to find a way to make his new platform successful.
“The day has finally come with Musk officially closing the Twitter deal last night,” Wedbush analyst Dan Ives wrote in an investor note last week. “As we discussed, the easy part for Musk was buying Twitter. The hard part and the uphill battle on Everest going forward will be fixing this ailing asset.
Twitter has an outsized influence on our culture compared to some of its biggest competitors. With 237.8 million monetizable daily active users — the company’s measure of users who see ads — Twitter is far smaller than parent Facebook Meta, which has 2.93 billion daily active users, and TikTok. , which reported having 1 billion monthly active users as of September 2021.
Despite its relatively small size, Twitter regularly powers big news stories because of the people who use it. That’s not always a good thing. Former President Trump was banned from the platform for using it to spark the attack on the Capitol, and the entertainer formerly known as Kanye West was suspended for his recent anti-Semitic rant. A hero diver has sued Musk after the CEO called the man a “pedo guy” on Twitter.
But headlines don’t translate into dollars. For years, investors have complained that Twitter isn’t monetized enough, calling on the company to introduce subscription features and find ways to generate more ad dollars. To turn the company around, Musk must leverage the cultural significance of Twitter and listen to the advice of workers and advertising partners.
“Elon Musk [has] listen to the Twitter community, listen to Twitter employees and those who will remain there, listen to advertisers. These are all important stakeholders that Musk will need to energize for the platform to succeed,” Pourlx said.
Musk is already making changes
No one knows for sure how Musk will transform Twitter. It went from asking that all speech be allowed on the site to saying that it should be moderated to some degree. On Friday, Musk announced that he is setting up a content moderation council made up of diverse viewpoints that will presumably be responsible for making decisions about user-generated content and accounts.
If it allows the site to turn into a quagmire of hate speech and negativity, it could end up alienating Twitter’s existing user base.
Musk also needs to present a clear vision of what he wants to do with Twitter. It’s something he might have done over the past few months if he hadn’t tried to back out of buying the site.
“He has to be able to communicate that vision in a way that has both an eye for detail, an eye for strategy,” Talley said, “and most importantly, a sense of commitment on his part.”
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