Decoded: Elon Musk takes over Twitter, and chaos reigns

On October 27, Elon Musk completed his buyout of Twitter for $44 billion. The self-proclaimed ‘Chief Twit’ waltzed into Twitter’s headquarters and immediately fired CEO Parag Agrawal, CFO Ned Segal and Vijaya Gadde, Twitter's head of legal policy, trust and safety. Musk had already been meeting with Twitter employees earlier in the week, ahead of the impending move, and had walked into the office carrying a sink, in order to make a ‘let that sink in’ pun.

Musk’s first few days in charge of Twitter have been wrought with chaos. A spate of senior employees have left, and wide-spread changes to content moderation policies and the verification process are being considered. Musk seems to be working out these details in real time, apparently suggesting a $20 fee for verification, before bringing it back to $8, and tying with Twitter Blue, the company’s subscriptions service which was still in trial. Musk has vehemently defended this decision, through signature irreverent memes and snarky replies to public figures, and a public negotiation with horror author Stephen King, in which he stressed that Twitter ‘has to pay the bills somehow’.

In an earlier tweet, Elon Musk had said that he bought Twitter in order to ‘help humanity’, whom he loves, and not to make money. Yet, as he prepares to take Twitter private, the money has to come in.

Twitter is in a peculiar place as a social media website. In terms of numbers, it is relatively small - it has around 396 million monthly active users according to estimates, compared to 2 billion for Instagram and 2.91 billion on Facebook. And yet, Twitter commands outsize influence because of the clientele that uses it frequently - from journalists and public activists to CEOs and heads of state. Tweets can change the course of public life, put governments in crisis, and act as a platform for civil resistance.

Twitter influences public discourse. What Twitter does not do is make money. Twitter has failed to return profits in eight out of the last 10 years - and right now, Elon Musk needs profits. In order to acquire Twitter, Musk has loaded the company with $13 billion in debt. With this, the firm will have to pay around $1 billion a year in interest payments to banks. Last year, Twitter’s cash flow was about $630 million, meaning that they really need to make more money.

Around 90% of Twitter’s current revenue comes from digital advertising. And while the ad revenues have been falling across all social media companies, Elon Musk’s freewheeling, and irreverent nature, and his ideas for what he wants Twitter to be, do not exactly inspire faith in advertisers.

Musk describes himself as a ‘free speech absolutist’, amd has repeatedly called for less content moderation. On October 28, when he took over the site, racist and other hateful tweets began to appear across the site at much higher levels than usual, as reported by NPR.

Advertisers have not taken the risk of being seen next to hateful content lightly. Car maker General Motors has already suspended ads on the website, in order to evaluate ‘the direction of the platform’ under new leadership. Advertising giant IPG, which handles companies like Nintendo and Unilever, has advised its clients to pause ads on Twitter, and await clarity on the social network’s plans for trust and safety.

Last week, Musk wrote that Twitter would be “forming a content moderation council with widely diverse viewpoints” and said that “no major content decisions or account reinstatements” would occur before the council convenes.

A general sense of chaos pervades Twitter since the transfer of ownership. Elon Musk proposes and negotiates policy decisions live on the website, interacting with users as he goes. Around half the workforce is in line to be laid off, while the other half faces long crunch hours and fast deadlines.

As of now, nobody knows what exactly will become of the world’s most influential social network - including, seemingly, its owner Elon Musk.