What’s next for Twitter under Elon Musk?

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It’s been a wild ride the past two weeks with Twitter under Elon Musk’s ownership, including Musk showing up at Twitter headquarters with a sink and firing half of the company’s global staff. Almost every day there’s a new headline about what’s happening in the company and on the platform: changes in management, verification subscriptions deployed and withdrawn, threats of dismissal of employees if they work remotely.

Alex Heath, associate editor of The Verge, told Marketplace’s Kimberly Adams that Musk wanted to change just about everything on Twitter, even if it was messy. The following is an edited transcript of their conversation.

Alex Heat: Every day is a new drama. I would say the main thing that happened, Elon Musk actually ordered his second code freeze on Twitter, which basically means the engineers there aren’t able to make any changes. And that’s because it goes through all the infrastructure, all the code. The rumors I hear are that the engineers are ready to do a major rewrite of how the whole system works. He’s doing a sort of nut soup transformation of the business right now.

Kimberly Adams: Last weekend, thousands of Twitter contractors were furloughed without notice, among many layoffs happening there. Many of these posts have an impact on content moderation and site maintenance. How has this affected content on the platform, as far as you can tell so far?

Heather: You’re right, he laid off a significant portion of Twitter’s contingent workforce over the weekend. And it is obvious that this will prevent the company from catching what it normally would. And Musk’s argument, of course, is that Twitter has been massively bloated and doesn’t need all that, and has done too much for too long. So that’s his position.

Adam: What do all these discounts mean for privacy concerns?

Heather: The concern for confidentiality is real. I mean, so Yoel Roth, who is Twitter’s head of trust and safety, actually resigned last week. And Yoel Roth was kind of seen as the one holding Twitter together. Now everyone is trying to figure out who’s running this, who’s deciding? Does everything go through Elon? How is that possible for a company with over 250 million users? So I would say it’s too early to tell what the real ramifications will be. But Twitter is a radically different business than it was a few weeks ago, and we’re only just beginning to see the impacts.

Adam: Last week, The Verge obtained a recording of Musk’s very first meeting with all of Twitter’s employees. What did you remember when you heard this audio?

Heather: You know, I’ve covered Musk before and watched how he interacts with employees at his other companies, so I was expecting a bit of erraticism. But I guess I was still surprised at how everywhere it was. I mean, this is the first time he’s addressed a large chunk of the workforce since he took office, nearly two weeks later. And this is a meeting that was scheduled less than an hour before and put on people’s calendars. And it was a Q&A, and it really oscillated between its product quirks of, “We should try to compete with YouTube and pay creators like YouTube,” to a very, I would say, tense exchange with an employee about work at distance, basically saying, “No, if you don’t physically show up at the office, like from now on, the resignation is accepted.”

So I would say, oscillating between kind of a pie in the sky, this is what Twitter the product should be under Musk, which he talked about being a bank, and, like, literally sending people checks and having accounts Twitter verification and credit accounts and even make loans on the go. He was an early founder of PayPal, so I guess there’s a connection there. But I would say oscillate between stuff like that and the really forced cultural reset that he’s doing, which is “Do we really need to go to the office?” And he’s like, “Yeah, or you’re fired.”

Adam: What, if anything, are we hearing from regulators about this, in the United States and around the world?

Heather: I reported on this rather alarming Slack message that was sent by a senior Twitter lawyer on the privacy team, basically encouraging employees to seek whistleblower protection if they felt uncomfortable by this what Musk was asking them to do. Twitter is under a [Federal Trade Commission] consent decree where basically they have to tell the agency that “we use our user data in a responsible manner that complies with this decree, this order that we signed” otherwise the executives that certify this can literally go to jail. And in fact, the three senior compliance officers who have to certify this to the agency all resigned the day before they had to send this to the agency. Then you have a lawyer inside a company saying, ‘Musk puts us in a position where we potentially have to pay billions of dollars in fines, and we may be breaking the law if we keep doing the things as he says. should do them.

He really has no respect for government agencies. He was public about it. There was the infamous Tesla privatization tweet for $420 a share, and a lawsuit and telling him he’s not SEC compliant. He’s a tech billionaire CEO who routinely flouts regulations. And Twitter is a heavily regulated company. And so the [Federal Trade Commission] already said, “We’re looking at that. We are very worried. We are going to meet Twitter. And Musk’s personal attorney is currently Twitter’s chief legal officer, and he sent a follow-up note to employees saying, “Don’t worry, the company will be liable if we break anything.” You won’t necessarily be responsible and have to go to jail yourself,” which is never a super reassuring message from your new boss’s personal lawyer.

Adam: What about outside of Twitter? How are advertisers reacting to all of this?

Heather: Not great. Most major advertisers have suspended spending or told their clients they need to suspend spending. Several of the world’s largest agencies that manage spend for brands like Apple, Pepsi, McDonald’s have all told their clients, “We just recommend, for example, not spending on Twitter at all for the foreseeable future until so that we have a better idea of ​​what Elon wants to do. He said he didn’t want Twitter to become a “hellscape,” that he wanted it to be a very safe place for advertisers. I would say that the deployment of the paid verification checkmark last week showed that it was not there yet. As if we had spoofed brands, causing their stock to drop. So there is a huge concern that being a brand on Twitter is becoming more and more risky.

And Musk said he’s seen a “massive drop in revenue” since taking over even as user numbers grow, which is actually a problem for a company like Twitter because more users mean that it is more expensive to operate the service to pay. cloud bills, etc. This is happening as revenues fall rapidly. And Twitter is very dependent on advertising. That’s over 90% of his revenue before he went private under Musk, and he wants to bring in subscriptions to diversify that. But so far, the deployment of [Twitter] Blue, I think it’s safe to say, was a disaster. I mean, he had to shut it down after less than a week and now he’s revamping it again. He is therefore in a very difficult position. I mean, he said in that employee meeting that it’s not out of the question that Twitter might go bankrupt. And this is a company he just spent $44 billion on. He is therefore in a very difficult position.

Adam: So where do you see Twitter and its users going from here?

Heather: Well, Musk is sleeping at Twitter headquarters in San Francisco, which he did when Tesla was facing a massive production crisis several years ago. And he often refers to it in interviews, saying it was “one of the most stressful times of my life. we needed to get through this. And Tesla survived that. And in fact, you could look back and say that was a time when Musk rallied the troops and Tesla did better. And now, he’s trying to do the same thing inside Twitter, literally sleeping on the office floor.

And the question I’m asking myself, and I think the question a lot of other people are asking, is whether Twitter employees will rally like Tesla employees, because unlike Tesla, it’s about a company that Elon Musk just bought, bluntly fired by email half of Twitter employees. And now, other people are told, “You have to report to the office like now or you’re fired.” You will respond to Musk’s whims as quickly as possible and execute them. It’s a business now dictated by someone you’ve barely met. So I think it’s going to be very hard. And if he succeeds, and we’ll talk about that in a few years, and Twitter has a billion users, it’s going to be one of the biggest business pivots in history, or it’s going bankrupt. I think those are the two options.

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