On Monday, the world’s wealthiest man officially took ownership of one of the world’s most influential social networks when Elon Musk closed a $44 billion deal to purchase Twitter. Here are five things to know about the deal.
1. Musk is motivated by free speech
His primary motive? Free speech. “Free speech is the bedrock of a functioning democracy, and Twitter is the digital town square where matters vital to the future of humanity are debated,” Musk proclaimed in a statement announcing the news. According to him: content moderators interfere too much on the platform, hindering free speech. He’s also advocating for an edit button, the removal of spam-bots, and an “open source model” algorithm. This new algorithm would allow users to see how certain posts, including promoted posts, appeared on their timelines.
2. Reactions express uncertainty
The reactions have been mixed. “One good thing about Elon buying Twitter is that I will FINALLY leave and stop being a complete menace to society on here. So it’s win win for you all really,” actress Jameela Jamil tweeted. Internal Twitter employees are meanwhile feeling hesitant. “It’s a time of genuine discomfort & uncertainty. Most of us believe deeply that Twitter is much more than a tech platform; we have a deep responsibility to society. I hope our new owner gets that.” said Edward Perez, director of product management for societal health at Twitter. Another Twitter employee joked that “if you’ve ever wanted to hire a current Twitter employee this is the week to slide into their LinkedIn DMs.”
3. A monthly subscription model could generate revenue
Under private ownership, Twitter won’t be under the same revenue pressures as it is today, in terms of living up to shareholder expectations, but with the $44 billion price tag for the company, Musk may want to offset some of that expense. So how will he do it? In the past, Musk tweeted the idea that everyone who signs up for Twitter Blue ($3/month) will automatically become verified with a blue check mark. According to Social Media Today, “Musk’s view is that by authenticating real people, and giving them a checkmark, that will lessen the impact of bots (another of his key focus points), and forcing people to pay for Twitter Blue, at $3 per month, could be the way that he does it.”
4. Many expect advertising options to become more innovative
And while yes, Musk has said he hates traditional advertising, cost offsets could also be supplemented with more innovative advertising solutions as a means to lure more advertisers to the platform. “Ironically, brands could benefit as [Musk’s acquisition] may improve Twitter’s advertising offering. There will undoubtedly be increased financial pressure on the new owners to further evolve the advertising solutions so that they can command higher rates — maybe with new more immersive ad experiences — while maintaining a brand-safe environment,” Alistair Goodman, CEO of Emodo told Marketing Dive.
5. Brand safety could be at risk
“Crypto advertisers, and any enthusiastic backer of Elon Musk, will lean in and buy more advertising with Twitter,” Todd Krizelman, CEO and co-founder of MediaRadar told Marketing Dive. According to Marketing Dive, “On the one hand, Musk is an ardent tech evangelist who’s stated he’s open to more innovation on a platform that is a notorious laggard compared to peers. On the other hand, his “free speech” crusade could stoke fresh fears over brand safety.” Brands are becoming more and more cautious of making sure their content isn’t placed next to anything that’s harmful or misinformative, so may want to consider taking their ad dollars to other platforms with better safety measures in place.
For now, the big question that remains is how Twitter will change under new ownership, and if it will change at all. Stay tuned to how the situation unfolds by subscribing to our weekly marketing news roundup where we discuss insights into the latest news, trends, and marketing buzz.BACK TO LATEST