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Thursday, June 30, 2022

Five things in Elon Musk’s in-tray after Twitter takeover | Elon Musk

Elon Musk, the owner of one of Twitter’s most followed accounts, is now its owner. On the evidence of his tweets over the past month, expect change at the social media platform. Here are some of the biggest issues you can expect him to address.

Donald Trump’s account

Musk has described himself as a “free speech absolutist”, and the fate of the former US president’s suspended Twitter account represents a strong test of that ideal. Trump was banned permanently shortly after the Capitol riot in January 2021, as the company cited his repeated violations of the company’s rules and the risk of “further incitement of violence”.

Donald Trump
Donald Trump was banned from Twitter in 2021. Photograph: Drew Angerer/Getty Images

Musk said this month that he was “very cautious with permanent bans” on Twitter and would prefer a timeout system. But he has not directly addressed the issue of Trump’s account, which had almost 89 million followers.

Speaking at a TED conference, Musk said: “I think it’s very important for there to be an inclusive arena for free speech. Twitter has become kind of the de facto town square, so it’s just really important that people have the … reality and the perception that they are able to speak freely within the bounds of the law.”

However, Trump was banned in part because Twitter feared his tweets were inciting law-breaking. Musk has to reconcile his free speech principles with legal reality – and Trump’s history on the platform. On Monday evening the former president told Fox News he did not even wish to return and would use his own startup, Truth Social, instead.

Nonetheless, one group of House Republicans has urged Musk to act.

A tougher regulatory environment

The social media industry is coming under more stringent regulation, particularly in Europe. Last week the EU announced the Digital Services Act, under which companies such as Twitter, Facebook and Google will have to do more to tackle illegal content or face multibillion-euro fines. It will be preceded by the UK’s online safety bill, which requires social media platforms to protect their users from harmful content and comes into force at about the end of the year.

In the US there are moves for regulatory change, although they must overcome perennial political gridlock. Legislative proposals in Washington include creating a new digital safety bureau at the Federal Trade Commission and the creation of new children’s safety requirements for tech companies. The latter is co-sponsored by the Democrat senator Richard Blumenthal, who led an explosive evidence session with the Facebook whistleblower Frances Haugen last year and has been vocal in his support for the greater regulation of social media.

Revenue and subscriber growth

Twitter investors have long been concerned with the company’s growth in revenue and users. In its most recent quarterly results, revenue grew more slowly than expected, despite rising 22% to $1.6bn in the last three months of 2021. However, daily active users rose by 25 million over the year to 217 million as the company reiterated its goal of hitting 315 million such users by the end of next year.

In a since-deleted tweet this month, Musk raised the possibility of removing advertising from the platform’s premium service, Blue, which is available in the US and Australia but not the UK. Twitter makes 90% of its annual revenue of $5bn (£3.8bn) from advertising, so Musk was broaching a potentially radical move.

Management changes

Musk is not the first Twitter shareholder to express concerns about how the company is run. Elliott Management, an activist investment firm, took a stake in Twitter in 2020, amid reports that it thought the platform had a distracted chief executive in Jack Dorsey and was not adding innovative new products quickly enough. Dorsey survived the initial pressure but left in November last year and his replacement, Parag Agrawal, was promoted to the top post from the position of chief technology officer.

In a message to the Twitter chairman, Bret Taylor, Musk made clear that another executive shake-up is in the offing if he succeeds in buying the company. “If the deal doesn’t work, given that I don’t have confidence in management nor do I believe I can drive the necessary change in the public market, I would need to reconsider my position as a shareholder.”

Musk is CEO of Tesla and the rocket company SpaceX, as well as being the owner of the tunnelling business the Boring Company, so there are enough demands on his time already. Tesla shareholders will want Musk to stay focused on running a $1tn electric carmaker but it would be a surprise if Musk is a hands-off owner of Twitter.

Elon Musk speaks at the Tesla Giga Texas manufacturing ‘Cyber Rodeo’ grand opening party in Austin, Texas, earlier this month.
Elon Musk speaks at the Tesla Giga Texas manufacturing ‘Cyber Rodeo’ grand opening party in Austin, US, earlier this month. Photograph: Suzanne Cordeiro/AFP/Getty Images

A possible edit button

There will be changes at Twitter under Musk’s ownership and an edit button is one of the options under consideration. In a flurry of tweets posted in the wake of his emergence as a 9.2% shareholder in Twitter earlier this month, Musk flagged the possibility of introducing the feature. The ability to undo a tweet posted in haste is available to Blue subscribers only, who have a 60-second grace period after posting their tweet in which they can remove it before it is seen by anyone.

Do you want an edit button?

— Elon Musk (@elonmusk) April 5, 2022

Twitter subsequently confirmed that it had been looking at the edit button idea. Other changes suggested by Musk include making Twitter’s algorithm open source, meaning users would be able to view the algorithm that curates what users see. Musk has also said that Twitter users should be able to see if their post has been promoted or demoted.

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