The richest man in the world bought the platform by tweeting: "the bird is freed." [Elon Musk completes $44 billion deal to own Twitter – NYT]. It'snot a great buy, and there's also a broader change going on in online communities. Even in Zuckerberg's company, things are not going well. Meta's shares fell 25% because brands spend less on marketing. Meta's disappointing earnings come amid a broader sell-off in Big Tech stocks.
Elon Musk kicked off a new era in the social media company by firing four senior executives and tweeting: "the bird is freed." He plans to cut three-quarters of Twitter's workforce in the coming months, the Washington Post reports.
Many questions remain. When will Donald Trump have his account restored? Will Alex Jones, the conspiracy theorist, return? Musk has promised advertisers that Twitter won't become a "free hellscape for all" and is already bringing together Tesla engineers with their Twitter counterparts, presumably part of his plans to turn the social media platform into an "app of everything." The challenge is huge, however, and concerns not only his investment in Twitter, but also his other companies. The risks for Musk, writes Elizabeth Lopatto in The Verge, hang downwards.
First of all, it is not a very good purchase. "No one thinks the company should be valued at $44 billion," Andrea Walne, general partner at Manhattan Venture Partners, said in early October. She and other investors were looking to withdraw from the deal. ("Obviously, I and other investors are obviously overpaying for Twitter right now," Musk said in a call on Tesla's earnings. )
Twitter is also a managed social network, one that made just $5 billion in revenue last year. He did not make a profit. But it has had a huge reach in part because of the active use of people like Musk, who uses Twitter to connect with his fans, investors and others. Heavy users include politicians and journalists, which means Twitter influences public discourse. What Twitter doesn't do is make money.
There is also a broader shift going on in online communities. "Twitter has never been able to deal with the fact that its users hate using it and they hate each other too," Broderick writes. For example, we literally call it "the hellish site"! Some social media initiatives like TikTok and BeReal allow people to set boundaries, but not Twitter, so a harmless tweet can suddenly trigger a dragging of days.
However, the problem is wider. Even in Zuckerberg's company things are not going well [Mark Zuckerberg dans le gouffre du métavers – Le Monde]. Of the collapse of Meta's shares writes the @WSJ. [Meta Lost Nearly a Quarter of Its Market Value Today – WSJ]. The topic is also among the first articles on the front page of the @FT [Meta's value plunges by $89bn amid falling sales and rising costs – FT]
Meta's shares fell 25% in New York as the world's largest social media platform joined other Big Tech groups to warn that an economic slowdown was hammering its advertising activities as brands spend less on marketing.
Meta's disappointing earnings come amid a broader sell-off in Big Tech stocks. Shares of Google's parent company, Alphabet, fell more than 9% on Wednesday after it signaled an unexpectedly severe slowdown in its core search ads business, while Snap stock tumbled last week after posting the slowest pace of growth since going public in 2017.
