Elon Musk will he succeed in his bet by buying Twitter? After electric cars (Tesla), rockets and satellite constellations (SpaceX), tunnel transport (The Boring Company) or online payments (PayPal, resold company), the entrepreneur ventures into political territory and cultural, that of social networks. He also invests in a struggling company, in a sector under pressure. With Twitter, the unstoppable Elon Musk sets himself a complicated challenge.
The first conundrum is the economic equation. Twitter achieved only 5 billion dollars (the same sum in euros) in turnover in 2021, against 118 for the leader Meta (Facebook, Instagram and WhatsApp). The company, which has been loss-making since its creation, lost $221 million in 2021, and the trend has worsened since then, with a $270 million deficit in the second quarter of 2022 alone. To cut costs, Musk plans to lay off 25% or even 50% of the 7,000 employees, according to documents cited by the washington post. This will raise the question of how to do more with less, faced with Meta’s 87,000 employees.
In terms of revenue and users, Musk would aim to multiply them by five by 2028, to 26 billion dollars and 931 million members, according to a presentation in May cited by the New York Times. But this is by no means obvious. Musk bets on paying, an interesting track. He mentioned the 1er November the idea of a subscription at 8 dollars per month, giving the right to a blue identity verification label, as well as priority display of its messages on the network. But what about the verified personalities today who have not paid? Or harmful users who have subscribed? How many users will be attracted?
A “universal” application
Another track is the reactivation of the defunct Vine short video service. This format is the subject of fierce competition between YouTube, Meta and the leader TikTok… More broadly, Musk has put forward the idea of transforming Twitter into an application “universal” who would copy WeChat. But he is not the only one who wants to imitate this Chinese platform which allows you to exchange messages and videos, order a taxi, pay your bills, etc.
In the meantime, Twitter depends on advertising. However, this sector is under pressure due to the economic situation. In addition, advertisers, concerned about their brand image, have little taste for Musk’s desire to restrict content moderation. General Motors (competitor of Tesla) has already suspended its investments. And the association of advertisers Global Alliance for Responsible Media has warned that the platforms must remain “safe places” where ads are not alongside hate speech or scams. Elon Musk tried to reassure them by writing that “Twitter cannot of course become a desolate landscape open to the four winds, where anything can be said without consequences”.
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