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Twitter’s toughest business challenge has long been convincing advertisers that it’s a safe place to spend money. The service is fast, emotional and extremely unpredictable. So your ad – depending on the moment – could appear next to a fun meme or a neo-Nazi flame war. For many marketers, this has been a reason to stay away.
To address this problem, Twitter recently turned to vigorous content moderation. A company that once thought of itself as the “free speech wing of the free speech party” now aggressively controls speech – sometimes to a fault. As it became more “brand safe”, advertising dollars poured in. Last year, Twitter earned $5.08 billion in revenue, up 37% from the previous year, its best year on record.
With its business booming, Twitter is now poised for a fascinating clash with Elon Musk, its newest board member and top independent investor. Musk, who bought 9.1% of the company, is not your standard activist investor. Typically, when people take such steps, they do so with the belief that they can make money by driving change within the company. But Musk seems more interested in changing Twitter’s product and policy, even if it comes at the expense of its bottom line.
Musk, for example, criticized the moderation of content that has boosted Twitter activity. As he bought his shares last month, he said ‘failing to adhere to the principles of free speech fundamentally undermines democracy’, then asked if a new Twitter competitor was needed. Apparently, he decided to pursue reform from within, and this week promised “significant” changes to come.
Although Musk may have a hard time changing Twitter policy, it will inevitably be at odds with the company’s business operations if it pushes for an override of content moderation. Few Twitter employees applauded Musk’s involvement this week, and the uncertainty around the company is likely a big factor. It’s not about politics, as some people say, but about income. Advertisers want comfort. Musk wants Twitter to get back to its freewheeling roots. And that puts him on a collision course with the people inside the company tasked with doing their numbers. The atmosphere inside Twitter could quickly become awkward.
There are ways Musk could address his beliefs around speaking without changing the current moderation rules. Chief among them would be accelerating the transformation of Twitter into a decentralized protocol, essentially turning the service into many different Twitters, each with their own rules, allowing you to join whichever one you want. Twitter is currently working on an initiative called Bluesky to push this forward, although it is progressing slowly.
“It will be super interesting to see how this speeds up things that Twitter has been talking about for years,” mentioned former Twitter communications manager Brandon Borrman on Wednesday. “Algorithmic choice, open source protocols, decentralization, a business model that moves away from ads.”
Even if some advertisers stay away from Twitter due to brand safety concerns, it doesn’t necessarily hurt the company’s revenue. The buzz generated by Musk could attract more marketers, and some are already salivating at the energy he will bring to the company. “It will exponentially amplify recent momentum in tangible products at the most opportune time, given recent very public challenges on Facebook, Pinterest and other platforms,” said a marketer at a major brand. “Only unserious marketers would opt out of Twitter.”
Musk’s involvement in Twitter’s speech politics may, in some ways, be necessary. The company, for example, went too far in the 2020 election, blocking links to legitimate stories on Hunter Biden’s laptop. But getting to a satisfying place for Musk, the people inside the company, and its advertisers will be messy. That said, Wall Street is betting they’ll find out. Shares of the company are up 22% this week.