What could Twitter look like under Elon Musk?
Elon Musk’s protracted pursuit of Twitter appears to be coming to an amicable end. Last week, the Tesla CEO offered to purchase the social media platform at the previously agreed price of USD 44bn – nearly seven months after the initial offer had been agreed.
Musk has already tweeted his potential blueprint for Twitter, claiming his purchase could turn it into the “everything app”. Musk has also previously stated his intention to change Twitter from human to an algorithmic moderation, as well as promote subscription monetisation of the platform.
As the deal concludes, this M&A Watch draws on the expert insights of a former global head at Twitter to examine Musk’s potential plans as well as the impact of the current macroeconomic environment on the platform.
Our specialist told Third Bridge Forum that the ideas Musk has voiced to change Twitter are not revolutionary. They told us that Twitter has been exploring a subscription model since 2018-2019 but that the company has not had the conviction or decisiveness to implement such action. The specialist said Twitter’s leadership team makes decisions based on consensus which can be slow, highlighting the time it took to change the length of tweets. Musk however is different, according to the specialist. They see him as a “decisive decision maker” – something they said would be “revolutionary” compared to Twitter’s current leadership.
“I was on a tiger team talking about subscriptions back in 2018-19, so the stuff that Elon Musk is saying is not really revolutionary. What probably is revolutionary is that he would actually say, ‘Get it done,’ and it would get done.”
Meanwhile, we heard that the uncertain economic outlook is likely to benefit Twitter. The specialist said that Twitter is in a “unique position” in that politicians, journalists and celebrities use the platform, giving it a “reliance” that sets it apart from competitors like Facebook and Instagram. On IDFA changes, the specialist explained why they believe Twitter is less exposed compared to other social platforms.
Twitter is also upgrading its tech stack – known as Goldbrid – and has been doing so for a number of years, the specialist said. They believe that Bruce Falk’s firing as former head of revenue is an indication that there are still challenges associated with completing the project. We heard this is reflected in the fact that Twitter’s largest 4,500 clients contribute 80-90% of its revenue. To diversify revenue, the specialist said the company could pursue a subscription offering as well as look at increasing its geographical exposure. The specialist noted that while Twitter is involved in 20 global markets, Facebook is involved in 80.
We also heard that Twitter’s CPMs could be around 50% higher than Facebook’s. However, the specialist said that Twitter has nearly double the engagement rates.
The specialist concluded that Twitter has a big opportunity over the next three years but faces some “hard, tough decisions” – with or without Musk as leader. However, they said if they were to hedge their bets, they would predict that Twitter will remain “exactly where it is now”.
For more human insights on Twitter and Elon Musk’s potential takeover, click on the transcripts below.
Related Transcripts
The information used in compiling this document has been obtained by Third Bridge from experts participating in Forum Interviews. Third Bridge does not warrant the accuracy of the information and has not independently verified it. It should not be regarded as a trade recommendation or form the basis of any investment decision.
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