Why Elon bought Twitter

Many people have the habit of converging on social media, and the platforms use this to leverage unbelievable results in online advertising. Retail merchandise may sit well on Instagram while failing on Twitter. Each outlet has a specific vocabulary for merging content with products. Let us look closely at how the new Twitter purchase may swing a bat at the ball of social advertising.

Twitter is like a sponge for public opinion, and many politicians find the platform a convenient tool for spreading influence.

Many scientists use the platform to release crucial studies and quickly help shed light on elaborate debates. With an effective channel to broadcast recent scientific breakthroughs, more objective evidence floods the network where many intense arguments get defused.

Businesses use Twitter as an extended CRM, instantly releasing feedback to their customers. And when customers freely share their opinion on the network, analysts can use this data to refine the quality and the delivery of their products.

News is no longer exclusive to news agencies like AP or CNN. People share videos and photos of what is happening in real-time. Isn’t that the dream of the field reporter to be in the center of the action when it happens? Combine social media with smartphones, and you have just converted normal people into relentless journalists. Twitter tends to spread the news as they happen, and tweets have gradually gained a solid newsworthy status.

One of the most noteworthy features of Twitter is that —like other social networks like Reddit— wrong-sayers are spotted easily. An ocean of fact-checkers and tireless readers work meticulously scanning every post around the clock. Any inconsistency or “fake news” is easily singled out and shunned. This transparency feature will help Elon turn Twitter into a symbol of freedom of speech.

What makes Twitter a unique social media?

We perceive ourselves differently depending on what platform we are on. For example, creative artists have exposed a notable disconnect between our profile pictures across various social media. On Facebook, a stunning mountain view is behind our smiling faces, our Instagram profile picture is a cat wearing sunglasses, and on LinkedIn, we dressed to impress. There is too much discrepancy between the visual cues we broadcast. This experiment shows how different we become when we focus on intent. And intent is what advertisers are after, and they launch a series of refined data-gathering algorithms to get it.

It is easy to see how we think we are perceived differently on different social media. But how do social media perceive its users? Let us see a rough summary of four popular social networks and what they think about their ideal user.

  • Instagram: We noticed you look and like stunning photos, so here is a nice-looking product that looks just like what you like; perhaps you will like it too.
  • Facebook: We know everything about you, so here is the discounted cat toilet you always wanted.
  • Twitter: We know you are trying to be funny or a troll. Sorry, we have nothing specific to offer you.
  • LinkedIn: We know your network and where you work, so here is a list of companies to follow.

Although this is a seriously compressed generalization, various social media treat users differently, reflecting on their unique advertising strategies. Given that notion, this quick comparison suggests that Twitter is, by definition, not the ideal place for advertising. Twitter’s ad revenue does not even come close to the towering Facebook and Instagram. Interestingly, when it comes to ad revenue, Twitter shares a classy undertone with the equally advertisement-neutral LinkedIn. And yet, trillions of dollars can start jumping around the world following a quick late-night tweet powered by someone’s bathroom wi-fi.

With so much social drama taking Twitter as a broadcast tribunal, any direct advertising on the media can quickly be dismissed as a covert promotion, propaganda, defamation, or anything with ill intent. Because of that, even clever advertising on Twitter can get a bad label (#sellout).

Although we assume that Twitter is not intentionally tailored for product placement strategies, its influence on many industries is beyond logic. A single tweet is responsible for stock market drops, changing the mind of millions, or selling for millions as an NFT. When Elon changed his Twitter bio to a single word, the Bitcoin value skyrocketed. A tweet later and the struggling video game retailer GameStop turned into an unimaginable giant. Some recognized this rescue mission as a token of noble gesture. In the rich man’s world of Elon, anything is possible, and the question is rarely “What is the next expensive thing I am going to buy?” but “What is the right thing to do?”

How easy is it to acquisition Twitter if you are Elon Musk?

It turns out not that easy. Although the richest man in the world can afford to get Twitter, it comes at a price. Some of his investors showed concern about the future of tesla after such an expensive purchase. Twitter is not another manufacturing company, but it may also draw collateral resources. Tesla devotees who decided the collateral would hit their shares pulled their equities.

The purchase also involves a loan. Although the price tag is dramatic even for class billionaires, Musk supporters also fear that the new social media purchase might be distracting. One man has limited time and resources. What if the primary decision-maker behind space exploration, self-driving electric cars, and the construction of massive underwater tunnels also peeks into the engulfing buzz of social media?

No wonder some of his supporters and backers can see this colossal purchase as a threat. Nevertheless, new investors have already pledged to step in and help Elon finalize the deal (with about $7 bln.)

Why would Elon want Twitter?

Elon Musk is likable. He is the CEO you can talk to, which is hardly the thing with most executives. Very few billionaires are the crowd’s favorites. Usually, extremely rich people appear as “the one-percenters,” a selected few whom the collective rest can conveniently blame for their misfortune. Musk is different. He can reach out to crowds, he is a good listener, and the simple ideas behind his projects attract the support of other companies. However, it also attracts many individual investors, who double as devoted fans. When you have devoted fans as investors, the support value is outrageous. Elon can customize Twitter and better reach out to his growing fanbase.

Two of Musk’s businesses are industry pioneers. The scope of SpaceX goes beyond what most space projects are about and is the first privately owned company to deliver humans to the International Space Station (ISS). Tesla Company has raked an unimaginable interest to investors and supporters and directly challenges century-old issues about our global energy resource planning.

Both Tesla and SpaceX are wedged on daring ideas, and such a high aim necessitates a flawless communication channel. Through a selective influence, Elon Musk has the means to change the course of history. Since he is under the constant radar of technology experts and futurologists, Twitter has become an exciting new variable in this powerful conquest.

When a social network overgrows its monetary value

Twitter users can quickly organize a wide range of users into complex networks that power through vital social and political matters. It is like a vast online country with its own rules amidst a tribe-like society. Although the platform was not originally designed for monetary gain, it can serve the purpose very well.

Experts expect that the value of Tesla and SpaceX is yet to reach new heights. So does Twitter – it will only turn into a more massive influencer. Many investors recognize these companies’ future potential, and therefore, what they are worth now is of little importance.

Tesla Company, for example, is not even big when to put next to other car manufacturers. It is barely in the top 20 when it comes to production. However, there is hardly a car manufacturer so much invested in what some dub “clean energy automotive.”

The innovative factor in Elon’s investments and companies makes them much more interesting. With Twitter as the outlet for broadcasting ideas about these companies’ future seems like a natural turn in his roadmap.

Regardless of whether Twitter was or was not a money machine up till now, the idea that Musk got it as a tool to make more money is a bit vague. A few months ago, Rotterdam had to deconstruct a historic bridge so that a massive vessel could see its way through. In contrast, Musk does not throw money on expensive toys. His modest demeanor confuses people who try to justify his motivation. His choices and moves are good-driven. At least there are no indications that Elon is pouncing on Twitter with the sole intention to convert it into a money-making machine. Of course, Twitter’s value will fluctuate shortly after the purchase, but if time proves the intent was pure, it will eventually flourish, and revenue will naturally follow.

Twitter is not another manufacturing company

With the acquisition of Twitter, Musk is diversifying his investments. A well-grinded mass media tool has little to do with companies like The Boring Company or Neuralink. As a large depository for personal data and opinions, Twitter doubles as a data protector and neutral ground for disputes. The personal data responsibilities require peculiar politics, and we have yet to see if Elon can manage them.

Some of the likely policy changes will tackle data licensing. Until now, Twitter users were responsible for their posts. However, this approach to data ownership might change with new rules, and if it does, Twitter’s revenue will change with it. The new user policy must adjust gracefully to the 100 million new users the company plans to rake in by 2023.

Although Twitter is way outside the scope of the other companies Elon owns, mostly global manufacturers, it is a company. Any company owner can impose whatever rules without the justification of any director’s board. Drastic rule changes will, of course, influence how well Twitter can work as an objective tribunal.

From a purely corporate perspective, anything within the company is a subject of change. The CEO can grab the rulebook and start underlining or crossing out. There is no need for anyone’s stamp of approval. We do not need a business plan to move things forward. For all we know about how enterprises work, Twitter can rise tomorrow as a privately moderated network for the chosen few.

What are the post-acquisition new Twitter rules?

Elon may introduce a subscription system, but that does not necessarily mean Twitter will turn into a subscription-only service. However, the subscription model is expected to boost media revenue. Whether Twitter Blue, which was released only months ago, will become what experts predict remains in the realm of speculation.

Since Musk has voiced the idea that he wants to make Twitter a free speech arena, post-acquisition changes must have a lot to do with free speech. Hopefully, the subscription system does not influence how opinions are voiced.

With fewer bans and restricted hateful or controlled opinions, Twitter may become the playground unabridged by unnecessary noise or ill-intent and suitable for healthy debates and decision-making polls.

Because Musk and his companies are incredibly popular, Twitter will only pick up on this upward draft and sky-high the ratings amidst the brewing buzz in the rich man’s world.

The Wrap Up

“I don’t have a business plan,” Elon Musk brushes off reporters. This lack of concrete approach may be unappealing to classic entrepreneurship, but it has served Musk well. There is no concrete plan for financing the purchase or how the media will come to be. Elon plans without setting too many milestones, a reactionary play that has proved extraordinarily successful thus far.

This ‘sixth-sense’ approach is very peculiar. While regular billionaires need an army of lawyers and advisers before locking on trivial decisions, Tesla’s CEO does not rely much on counsel. Does that mean that his team consists of people who are always in agreement with him? Very unlikely. While an emperor hardly manages an empire himself, few complex decisions were delegated to Elon’s imperial troopers. When it comes to looking at problematic decisions, he remains the lone captain behind the wheel.

Despite the many plausible reasons I explored, the Twitter purchase seems like an impulsive move on the cover. While the richest man in the world tackles tough issues spontaneously, a crowd of trusted backers grows even stronger. Elon takes a risk by making impulsive decisions, and the investors share that risk. However, they are also attracted by it.

It is undeniable that content gets smarter, but it remains for us to see if a new and smarter Twitter is on the rise.


Andreas Maier | CEO

Andreas is a result-oriented CEO who brings nearly 30 years of experience gained in the high-tech industry. His experience ranges up to leading positions in Fortune 100 companies such as rentalcars.com (PCLN) or Intrasoft International, a leading EU based R&D software vendor. He holds a Ph.D. in Neural Networks from the University of Cologne, Germany.
In the past Andreas has successfully founded and co-founded several startups among others XXL Cloud Inc., eShopLeasing Ltd, and WDS Consulting SA. His expertise is strongly focused on modern headless Commerce and the optimization of processes in IT ecosystems.