🦤 Take These Broken Wings...
I'm writing this post on Thursday, and it's kind of an even bet as to whether or not Twitter will still exist by the time this goes live on Friday. In the two weeks since Elon Musk took it over, the site has become a multi-car train wreck, a flaming shit-show of unimaginable proportions. A lot of doomsayers predicted that this would be the end of the Blue Bird, but I don't think anyone could have predicted just how fast that end would come.
So I thought it would be interesting to talk about how we got here and why.
Over the last few years, Twitter has actually gotten pretty good. They've taken a stronger stance on content moderation--not a flawless one by any stretch of the imagination, but incremental improvements. The platform was stable and bringing in new features (such as the long-awaited "edit" button). The timeline algorithm, though people complained, made it possible to stumble upon new weird content. It was my go-to place for up-to-the-minute news and really dumb jokes.
And then Elon tried to buy it.
At first, I wasn't particularly concerned. I didn't want him to buy it, since his libertarian ethos is anathema to keeping ad-driven social networks functioning and healthy, but I took comfort in two things: 1) He wasn't an idiot, and years of work had brought Twitter to the place it was, so he wasn't likely to rock the boat, and 2) He clearly didn't want to buy it at all. He was just using it as an excuse to move money around and free up some liquidity--like so many mega-rich individuals, his wealth is largely tied up in assets. So there was no way he was actually going to end up owning it, and even if he did, it wouldn't change all that much.
Hoo-boy, I turned out to be very wrong, especially about that first one.
Some background. After Elon made his bid but before the deal went through, he met with advertisers for an up-front sales event. Twitter books between 15-25% of their annual revenue here, providing them guaranteed income that they complement with smaller ad buys throughout the year. Someone tipped advertisers off that Elon wasn't prepared and gave them some probing questions to ask about what his plan was. And it turned out that, no, he had no plan at all. He was just winging it. And advertisers walked. Twitter is going into 2023 with basically zero guaranteed revenue.
And then the deal went through. Despite his efforts to sue his way out of it, he had to close the deal. In so doing, he drastically over-leveraged himself. When he'd made his original bid, he'd severely overvalued Twitter. While it's a site we all (used to) love, it's not worth $44 billion--a price tag that includes, as we all now know, a billion dollars in annual interest payments. But wait, it gets even dumber. In order to secure that financing, he had to put up a lot Tesla stock as collateral. More on that in a second.
After taking the keys, hate-speech on the platform skyrocketed, as he had signaled that he intended to do less content moderation. This made advertisers skittish, because they are generally controversy-averse. And in the grand scheme of things, Twitter is small potatoes from an advertising-budget perspective. Twitter needs advertisers way more than they need Twitter. And then Elon announced his plan to charge $20 for verification, so now the blue check-marks will no longer be an elitist club.
Couple things. First... no one worth eight-figures or more ever gets to be taken seriously when they rail against elitism. Second, this is a terrible idea, because it monetizes the one thing that makes Twitter valuable. If you follow Dan Rather on Twitter, you can be certain that you're actually following Dan Rather because only the real Dan Rather gets the blue check mark of verification. If you suddenly commoditize that, it becomes meaningless. Anyone with $20 can be whoever they want to be. This is self-evidently a really dumb idea, and the Twitter-verse immediately began to let him know. And then Stephen King complained and Elon dropped the price to $8. Because he clearly had no understanding of what people's actual objections were.
Because it turns out I was wrong about him not being an idiot.
Fast forward to the end of that week. There was another conference call with advertisers where Elon's one task was to re-assure them and bring them back into the fold and, once again, it was obvious that he had no plan. Some advertisers froze their accounts during the meeting because he acquitted himself so poorly. And then the next day, he fired half the workforce. And that's when things got interesting.
Interesting thing the first: Users started vacating the platform. Over the next week, the open-source Twitter alternative Mastodon doubled its user base. The only people left on Twitter were doing one of four things: 1) Hoping/Pretending everything was going to be okay, 2) Complaining about how Elon as destroying Twitter, 3) Performatively trolling, 4) Watching the shit-show unfold. The platform was dominated by discourse that was either explicitly about or explicitly denying that Twitter was suddenly a very uncool place to be.
Interesting thing the second: Elon began suspending accounts and banning anyone who made fun of him. He was still trying to be an edgy meme-lord and defend his ludicrous statements that content moderation and verification would continue unabated despite those teams having been de-staffed, and anyone who called him on it got booted. He's been coming off as an insecure, emotionally-stunted manchild.
Interesting thing the third: Advertisers were freezing their spend en masse. Elon complained about woke activists scaring them off and threatened to name every advertiser that he'd lost. Unsurprisingly, no on took the first seriously or gave a rat's ass about the second. And advertisers kept dropping, for all the reasons I've already mentioned, but for one more that Elon hadn't considered, methinks. Some of the first advertisers to jump ship were car companies. Audi, GM, Ford, etc. Why would they not want to support the CEO of one of their direct competitors, I wonder? Which brings us to...
Interesting thing the fourth: Tesla stock tanked. Remember when I mentioned how Elon had over-leveraged himself and used Tesla stock to secure financing and we'd come back to that? We're back to that. Elon had used his own Tesla stock as collateral. If he defaults on that loan, all that stock is now owned by a consortium of banks. And! If the stock drops in value, he has to provide more. The thing is, Elon is the face of Tesla and so much of his worth is tied up in his image as this brilliant self-made tech wizard. As Twitter started crumbling under the weight of his self-evidently poor decisions, and as he continued to make an ass of himself on the platform he now owned, that image also began to flag. And as a result, Tesla stock lost more than half of its value in days.
That brings us to today. Two big things have happened in the last twenty-four hours.
First, exactly what everyone said was going to happen happened. Trolls are spending $8 to create "verified" accounts that are impersonating real ones. A fake Nintendo of America posted an image of Mario flipping the bird. A fake Joe Biden talked about auto-felatio. A fake Rudy Guiliani announced that he had "shidded" himself, and then described being knocked over on the street by George Soros and spending minutes flailing like a turtle on its back. When these concerns were brought to Twitter CEO Elon Musk, he responded thusly:
🤣🤣
Such genius. So many brilliants.
Second, a whole bunch of people resigned last night, including the Chief Information Security Officer and Chief Privacy Officer. In leaked Slack discussions, we've learned that Elon is in a panic trying to make Twitter profitable so he can recoup some of his losses, and is throwing privacy and ethics out the window to do it. If this is true, they have billions in FTC fines to look forward to. But the word on the internet is "delete your account and uninstall the app because your data cannot be trusted with it."
And those are just the highlights. I didn't even mention Neil Gaiman and James Gunn moving to Mastodon or Elon announcing that he intended to make Twitter into a payments platform.
So yeah. The ship is sinking. It's been a good run. I joined back in 2009 and I met a lot of interesting people and heard a lot of dumb jokes through it. I will miss it. For now, I'm on the wandering.shop Mastodon server and enjoying it immensely. A little rough around the tech edges, but it's very chill.
As for Twitter? I expect it to be effectively shuttered by this time next week. I think ultimately it will be sold for pennies on the dollar to Google or Yahoo or something. But for all intents and purposes, it's dead already. And if this ends up destroying Elon Musk's career and costing him his stake in that car company he pretends that he founded... well, it's hard for me to get too upset about that.
So raise a glass with me. So long, you delightful town square and occasional pit of vapid human waste. We hardly knew ye.
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