Elon Musk purchases Twitter for $44bn
On Monday 25th April 2022 Elon Musk acquired Twitter for approximately $44 billion, in a fairly uncontested buyout.
It remains a mystery as to what Musk’s intentions are with the platform long term but he has indicated he wants to monetise tweets and generate greater revenue from the platform.
We’ll be keeping watch on the raising developments from this new acquisition and posting our findings with you (like, share and please, please, please let us know your thoughts!)
Here’s what we know so far…
The first quarter of 2022 (also being the first quarter since CEO Jack Dorsey stepped down) was bound to be unpredictable. The kids published earnings report showed that during this period, Twitter saw a slight surprise increase in users, a little less revenue than predicted, and a roughly flat stock price (a familiar position for the company to find itself in). Although even with s slight increase in popularity, Twitter has remained limited in its ability to generate revenue.
Quarterly earnings can be more than a window into one company; they can help explain broader societal trends. Take Twitter’s user base. The metric the company uses is to monetise it’s daily active users — basically, the die hard’s who will probably never leave the platform. That number rose to 229 million globally, a 15 percent increase from last year, with most of the growth coming from abroad.
Twitter was never really there as a money spinner in the first place. Dorsey was quoted as saying that the company is really meant to be a “public good at an open protocol level,” and decried the fact that “it has been owned by Wall Street and the ad model.” Musk has also made some similar comments. He has said he doesn’t care about “the economics” of the company and wants to get away from the ad model. But considering that his $270 billion or so fortune is tied up in Tesla and other endeavours, he really can do what he wants with Twitter.
Last year, Twitter made 89% of its income from advertising, and under Agrawal’s lead, the company became even more reliant on the ad model to keep afloat. Musk is apparently vowing to step in and totally remake the 16-year-old company (perhaps through still-hazy plans to push through a subscriber model that’s losing currency by the day).
Would you pay for a Twitter subscription? We think as long as Snapchat, Instagram, Facebook, and TikTok remain free, there would only be more of an incentive for people to remain on those networks (especially since meme pages just screen-cap the most viral tweets anyway).
One things for certain, if Musk wants to make a substantial amount of money from this it will take radical change, not only in the company and platform structure and it’s operating model but with the mindset of it’s users.
Stay tuned for more!