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After a year: Elon Has Spurred Novel Social Media Strategies Not His Own, but Still


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from the a-retrospective dept

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Today is the official one year anniversary of Elon getting control over what used to be called Twitter, and now is simply exTwitter. It was supposed to be tomorrow, but in a sign of what was to come, Elon and his buddies maneuvered to close the deal in the afternoon a day early, just to maximize their assholish tendencies.

The closing of the Twitter deal had been scheduled for that Friday. An orderly transition had been scripted for the opening of the stock market that morning. The money would transfer, the stock would be delisted, and Musk would be in control. That would permit Agrawal and his top Twitter deputies to collect severance and have their stock options vest.

But Musk decided that he did not want that. On the afternoon before the scheduled close he methodically planned a jiu-jitsu maneuver: He would force a fast close that night. If his lawyers and bankers timed everything right, he could fire Agrawal and other top Twitter executives “for cause” before their stock options could vest.

It was audacious, even ruthless. But it was justified in Musk’s mind because of his conviction that Twitter’s management had misled him. “There’s a 200-million differential in the cookie jar between closing tonight and doing it tomorrow morning,” he told me late Thursday afternoon in the war room as the plan unfolded.

Of course, it was never true that Twitter management misled Elon. What is true is that Elon didn’t bother to do even the most basic due diligence (and, in fact, waived the right to do so), and signed a contract which basically everyone admits was a massive overpay, that also saddled the company with significant debt.

If we take stock of how things are looking one year in, it can be summed up simply by saying “not great, Bob.” Musk told bankers that he had a clear plan to get the company to be worth $250 billion before long, and the bankers bought it. But so far, basically none of his plan worked. The pitchdeck claimed that he would quadruple revenue to $26.4 billion by 2028. Instead, he’s cut it by at least 60%.

He said he’d more than triple users to 900 million by 2028. Instead, user numbers have been dropping. Indeed, the Wall Street Journal got access to some more data (beyond what we had in the previous post) showing that exTwitter seems alone in losing users, as other sites are gaining them:

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Also, you see how it was a gradual decline, and then a steeper cliff after July? Want to know why that is? It coincides, almost exactly, with Musk’s big “rebrand” to “X.”

These aren’t issues of “market conditions” or things that were screwed up through outside forces. Every one of the problems stems directly from Elon Musk having no fucking clue what he’s doing.

He claimed he’d increase average revenue per user by $5.39, and his big idea there seems to have been to co-opt Twitter Blue (which had the kernel of a good idea, but wasn’t marketed very well by old Twitter) and turn it into X Premium (while also, ridiculously, getting rid of actual verification and pretending that X Premium was verification). And that program cannot be described as anything but a colossal failure, with even those who were interested in paying gradually losing interest in continuing. The value just isn’t there.

The best estimate I’ve seen for how many people are paying for X premium is somewhere around a million people. This is well less than half a percent of Twitter’s claimed user base. Now, converting people to premium offerings is always harder than people think, but less than half a percent is embarrassing. Those are the kinds of results that gets people fired. It also means that Elon gave up something in the range of $2.5 to $3 billion in ad revenue… to get back about $100 million in subscription numbers. That’s… bad.

So, no, it does not look like the ARPU numbers are going up to $5.39, and I doubt the plan to charge $1/year for everyone is going to help.

Of course, the banks who lent Elon all this money are now pissed off. They’ve been unable to unload the loans like they’d planned, and are recognizing just how much money they’ve lost on this deal. Apparently, the banks own investors are asking how the banks could have been so fucking stupid to loan Elon money for Twitter:

The X deal should have been a fee bonanza for the banks, who stood to earn tens of millions of dollars on the debt. Instead, their inability to resell it has been an albatross on their lending businesses and prompted questions from their own investors.  

Banks limit how much risk they take on at any given time, so holding X’s debt has taken up loan-book capacity that their deal makers would prefer to allocate elsewhere.

But really, the banks have no one to blame but themselves. Too many people fell for the myth of Elon having the Midas Touch, and insisted that he was some sort of ultra genius who could turn any company he touched to gold. But it was fucking obvious from the jump that no matter how much he might have (or might not have) contributed to his other companies, he never had the slightest fucking clue how social media works.

And the astounding thing is that one year in, it’s clear he’s still learned nothing.

Most social media startup CEOs end up going through the learning curve. Eventually, they figure things out. Sometimes it’s too late. But, by the end, they start to understand the basics. The incredible thing with Elon is that he doesn’t appear to have learned anything from his mistakes here.

Perhaps more tragic is that he’s basically destroyed what had been the best place to go for rapid breaking news coverage and analysis. While Twitter was always smaller than the other platforms, it made up for it in being the best “real time” source of news when something big was happening. But, as we’ve learned over the past few weeks, going to exTwitter to find out what’s happening with, say, Israel/Palestine or with the shooting in Maine is an utter disaster. Musk himself initially promoted two grifter accounts with a history of posting completely false nonsense to follow about the Israel/Palestine situation, and given that many more respected/trustworthy news purveyors have reasonably abandoned or limited their use of the platform, exTwitter’s greatest value is basically gone.

That said, he has inspired some unique experimentation in the social media space. At the six month anniversary of the takeover, I wrote about what appeared to be the three big “contenders” to take over the void that Twitter had left open for real time news. Six months later, and there are still tons of interesting things happening. I feel like Mastodon lost a ton of its early momentum by being effectively hostile to people who wanted a new Twitter-like space. I think it’s clear that the team behind Mastodon has realized it needed to adapt, but it feels a little like Mastodon is going to be saddled with being the “Linux” of short form social media: never quite going mainstream, no matter how often its many fans (and I remain one) insist that it’s not as hard to use as you’ve heard.

The new entrant since that post six months ago is Threads, from Meta/Instagram. That obviously hit the market with a huge splash and tons of hype, and then… lost a lot of its momentum, and has been trying to rebuild a space for itself in the market. There have been reports lately that suggest maybe it’s finding its footing, but it still seems a bit shakey. Some of the problem is that it still doesn’t seem to know what it wants to be. At times it acts like it wants to be the Twitter replacement, but then the people behind it keep saying that they’re downplaying the discussion of news on the platform, mainly because they know it gets impossible to moderate. But that also makes people who do want to discuss the news feels somewhat unwelcome.

The big unknown, of course, is if Meta ever actually lives up to its stated plan to federate Threads with ActivityPub, enabling Mastodon users (and users of other Mastodon-compatible ActivityPub implementations) to communicate with people on Threads. People at Meta insist it’s still a part of the plan, and that could be really interesting depending on how it’s implemented. But we just don’t know the details yet.

Six months ago, I had also mentioned nostr, which remains a fun project in its complete embrace of openness, but the project’s leaders seem so naive about what it takes to set up a social media protocol that it’s driving away basically anyone who doesn’t want to just talk crypto all day. I’m still hopeful for interesting projects to come out of nostr, because it has some advantages over the alternatives, but for now it’s just not getting usage outside of a niche.

And then, there’s Bluesky. This remains the one that I’m most hopeful about, and where I’m spending more and more of my time. Six months ago it only had around 100k users, and now it just surpassed 1.75 million, with over 1 million users having posted on the platform at least once. And that’s with it still being gated by an invitation system. I’m unaware of any invite-only app that has gotten that big.

It’s also the one that feels the most like early Twitter.

And also, it’s the one that is clearly thinking about how to actually function as a mainstream platform in the real world, while still setting itself up to be decentralized and not just beholden to whoever controls the company. A few months ago, someone from Bluesky explained that they saw their own future company as a potential threat, and were designing accordingly. Of course, it’s one thing to say that, and it’s another to do it. So far, they’ve been talking the talk, but at some point they need to start walking the walk too. I’m still confident they will, but I know some are quite skeptical. Once Bluesky finally goes federated, we’ll see if they can really find the right balance.

And so, one year in, it’s pretty safe to say that Elon Musk has been truly great at inspiring new and creative ides for better social media platforms. Just not his own.

Filed Under: ads, business models, elon musk, social media, speech, users
Companies: bluesky, meta, threads, twitter, x

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