What is Elon Musk's Twitter Potential?

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Despite the protests of the chattering classes, Elon Musk has agreed to buy Twitter for $46.5 billion. Musk has long expressed his dissatisfaction with Twitter's rigorous moderation policies. Musk, as the platform's new owner, has the authority to govern it as he sees fit. Musk, on the other hand, will have to make Twitter lucrative enough to pay its creditors if he wants to maintain it. Musk's desire to loosen Twitter's restrictions might clash with his right to keep advertisers pleased and money flowing. Musk will have to speed efforts to decentralize the platform, seek new sources of money, or find a method to separate political demands from user experience issues in order to "free" speech while maintaining Twitter's profitability.

Since 2010, Musk has used Twitter to harass critics and please followers. He seemed to love the rowdy, carefree environment of the platform. However, the features that have made Twitter "the de facto public town square," in Musk's words, have also made it difficult for the network to maintain user growth and consistently earn a profit. Not everyone aspires to be the center of attention in the ring. Because of Twitter's default openness, marketers and celebrities have a tougher time avoiding criticism and abuse.

Twitter has progressively extended both the scope of its regulations and the resources allocated to enforcing them in order to appease advertisers, attract users, and avoid regulation. Despite the fact that these adjustments were designed to improve "user experience" by providing more relevant information and concealing or eliminating inflammatory material, Musk believes they have harmed the platform. He has chastised Twitter for its obfuscated algorithmic content ranking system and lack of commitment to free expression. Musk could undo these adjustments if he had bought Twitter outright in cash, regardless of the implications (although he would still have strong financial reasons not to run the company into the ground).

Musk, on the other hand, has borrowed $25.5 billion of the $46.5 billion he needs to acquire Twitter. The first half of the loan is secured by Twitter, while the second half is secured against Tesla shares. Twitter's debt service will cost almost a billion dollars each year, or roughly two-thirds of the company's present revenues, and Musk's Tesla-backed loan would cost him a comparable amount to maintain. As a result, Elon Musk's Twitter will have strong incentives to maintain or expand profitability in order to pay off its obligations and pay Musk dividends. In the past, this meant pleasing notable users and marketers.

Musk will have to balance his pledges to liberalize Twitter's moderation with the need to keep ad money coming, or find new sources of funding. In the end, Twitter is likely to seek a hybrid of the two strategies. It's possible that it'll loosen its restrictions a little while replacing some ad money with subscriptions. Twitter may charge power users and businesses for access to the platform, or it might attract more people to its premium Twitter Blue app. Given Twitter's history of unprofitability, advertising may not be the ideal method to monetize the network.

This isn't to say Musk won't be able to make changes, but he will be limited by the necessity to be profitable. Some high-profile moves, like as Trump's reinstatement, may achieve both goals at the same time. Politicized policies, on the other hand, are frequently entangled with user experience problems. A thousand critical responses is a flood of abuse, but one answer is a response. However, restricting those responses means reducing someone's ability to speak. Another noteworthy example is Twitter's deadnaming policy. Is Twitter imposing progressive gender standards or making its platform more welcoming to trans individuals and marketers that cater to them?

Regardless matter who owns Twitter, it will be required to respect the law. This isn't a problem for Musk's ambitions in the United States, where Twitter's ability to moderate as it pleases is guaranteed by the First Amendment and Section 230. However, the European Union's developing Digital Services Act and the United Kingdom's Online Safety Bill, both of which feature new requirements to censor hazardous content, may constrain Musk's permissive plans for Twitter in Europe.

Some of Musk's intentions conflict with one another — keeping the algorithm secret has long been justified as a way to remain one step ahead of spambots. One of his proposed remedies, "authenticate all genuine persons," might threaten anonymous speech, which is a key component of Twitter's egalitarian dialogue. There are several happy mediums here — increasing but not requiring verification might help uncover spammers on the edges and reduce the cliquish dispute between "blue checks" and the unwashed masses. Musk won't be able to escape the compromises that come with content regulation, but he can do so in a variety of ways.

It will be tough to re-establish proper expectations for Twitter's moderation. Some on the right will undoubtedly test the limits of their desired liberties, while some on the left may seek boycotts of Twitter or its sponsors in reaction to policy changes. Musk will be chastised and praised for judgments on moderation that are unrelated to his ownership. Regardless of Musk's behavior, his acquisition may alter the platform's "vibes."

Elon Musk will have to offer people more influence over their individual experiences if he wants to liberalize Twitter's platform-wide policies or make fewer choices concerning politicized issues like disinformation or hatred without losing users or advertisers. Building tools that allow users to govern their own feeds and properly curate blocklists, or allowing third parties to do so, will take time. In the meanwhile, Twitter will have to manage expectations or face severe backlash. Nonetheless, as a privately held company, Twitter will have more leeway to experiment here than it has in the past, since it will not be constrained by the impact of quarterly earnings on its stock price. Musk may be ready to spend cash in the short term to weather the storm.

Giving consumers more control without splintering the platform would become difficult after a certain point. It may just be impossible to create a single large, boisterous global discourse that advertisers find appealing. Musk may speed up attempts to decentralize Twitter, recognizing that it is difficult to please everyone. BlueSky, a Twitter-backed project to develop a decentralized social media standard, is unaffected by the transaction, although Twitter might follow suit under Musk. In this scenario, Twitter would keep control of its core network, authenticating users and monitoring unlawful behavior, but leaving the appearance of tweets to third-party apps that utilize other filtering and presentation techniques. Twitter may keep an ad-friendly client, offer network access to third-party clients, or find other methods to monetise its raw material.

At the end of the day, Elon Musk will be the one to make these decisions. Musk wants Twitter to be more like itself, or at least more like it used to be. Despite concerns about democracy's capacity to tolerate unfiltered information and unrestricted communication on a large scale, Musk's vision of a worldwide clearinghouse for ideas is beneficial. To work properly, democracy requires feedback loops, and while Twitter has become a venue for elites and elite institutions to lose their credibility, it actually shows mistrust and misunderstanding rather than creating it. However, it remains to be seen if anyone, including Elon Musk, can successfully administer such a clearinghouse.