July 1, 2022

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What Elon Musk may imply for Twitter

As we speak, let’s speak about what Elon Musk means for the way forward for Twitter.

To say that the connection between the Tesla CEO and the social community is altering quickly is an understatement. So far as the world goes on Sunday, Musk was fairly merely one in every of Twitter’s most well-known customers. On Monday, it was revealed that over the previous month he had grow to be its largest particular person shareholder. On Tuesday, Twitter CEO Parag Agrawal announcement that Musk now has a seat on the board.

Meet Kate Conger and Mike Isaac at New York Instances:

Mr. Musk had concepts for reshaping social networks that joined these of Mr. Agrawal and Jack Dorsey, co-founder of Twitter, in keeping with their public exchanges. All three pioneered the thought of ​​radically shifting the ability of social media to customers and away from large firms, utilizing an method to expertise that will put folks in charge of what they see of their social media feeds.

Within the weeks that adopted, Mr. Agrawal mentioned the opportunity of Mr. Musk turning into a extra lively participant in the way forward for Twitter, in keeping with two folks with information of the conversations who weren’t approved to talk publicly. Mr Agrawal additionally welcomed that Mr Musk – who has greater than 80 million Twitter followers and generally tweets a dozen or extra occasions a day – is becoming a member of the corporate’s board, the corporate mentioned. one of many folks.

Musk’s shock Twitter stake was the most important tech story this week. It’s partly an artifact of the general public’s close to whole fascination with all issues Musk. It additionally illustrates how Twitter’s standing as the center of the worldwide information cycle implies that all Twitter-related tales can dominate the information: it doesn’t matter what’s occurring on Twitter, you possibly can relaxation assured that each person of Twitter has an opinion on this.

As a result of Musk presents himself on-line as some form of mischievous trickster god, his Twitter inventory buy has up to now been lined principally by the prism of shenanigans: the world’s richest man having enjoyable with this which Ranjan Roxy referred to as “the shitpost to finish all shitposts”. (I, for one, in contrast it yesterday to Loki shopping for an anthill.) And definitely, Musk’s conduct on-line over the previous two days has accomplished little to recommend that his mise represents one thing aside from the antics of a prankster; his first official touch upon the $2.64 billion buy was “oh hi lol.”

However the hubbub served to obscure what has been a tumultuous time on Twitter generally. It’s been simply 4 months since Dorsey unexpectedly give up Twitter after a marketing campaign by activist investor group Elliott Administration Corp. Elliott had taken a 4% stake within the firm in 2020 and determined to interchange Dorsey because of the stagnation within the firm’s share value. and low person progress.

Elliott left the board a bit of over a 12 months later, apparently pleased with Twitter’s progress. However as a beginning situation, he set formidable targets for the corporate that Dorsey was nowhere near reaching: develop its person base by 100 million, speed up income progress and acquire market share. as a digital advertiser. When Dorsey left Twitter, it appeared clear that the strain to realize these targets was a part of the rationale.

These targets are actually the duty of Agrawal, and within the first months of his tenure there was little signal of how he intends to realize them. Sure, the corporate is working to diversify its income past promoting by including subscription tasks and instruments for creators. Nevertheless it misplaced cash within the final quarter and added simply six million new customers.

All this to say that Twitter stays susceptible to a problem from Elliott or different activist traders down the highway, who could possibly be working to power Agrawal or but once more strain the corporate to promote.

This, to me, is probably essentially the most attention-grabbing dimension to contemplate Musk becoming a member of the board. Because the Instances story particulars, Musk has been pleasant with Dorsey and Agrawal. (Though Musk as soon as posted a meme evaluating Agrawal to Stalin?) They’re all enthusiastic about turning Twitter right into a decentralized protocol. All of them love cryptocurrencies.

And, publicly no less than, they’re all very excited that Musk has joined the board. (Right here is Agrawal, Dorseyand Musk on this topic.)

When you take all of this at face worth, it’s attainable that Musk’s presence on the board serves as a bulwark towards Elliott and different traders. If he’ll solely have one vote out of 12, his standing as each the platform’s largest shareholder and essentially the most influential member of the board of administrators will most likely give him a smooth energy that goes past his technical authority.

Furthermore, Musk’s Twitter membership successfully turned him right into a meme inventory, with traders driving the worth up 27% the day his stake was introduced. Assuming that’s true – it’s up one other 2% as we speak – activist traders could discover it even more durable to problem Agrawal’s management. (It’s additionally good for attracting and retaining expertise, whose compensation is usually tied partially to the inventory value.)

So the remaining query is whether or not Musk himself intends to be an activist investor. Or moderately, given his tweets up to now, this sort activist investor he needs to be.

We all know Musk considered creating an alternate social community that has fewer restrictions on what folks can put up. This has led to hypothesis that he could search to loosen up Twitter’s content material moderation insurance policies, and even defend Donald Trump’s return to Twitter.

We additionally know that Musk’s first official act as a Twitter board member was to ask his 80 million followers whether Twitter should have an edit button. (Actually, I myself had asked Musk to intervene on this subject.)

When you thought Twitter Inc. would ignore this type of rogue product improvement from its board members, the best way you politely nod to an uncle who “simply asks” at dinner Thanksgiving, Agrawal put this concept to relaxation moderately shortly:

Perhaps Agrawal is winking at us right here. There’s nothing unsuitable with having a bit of enjoyable on-line, nor ought to we blame it for wanting to ascertain a bit of goodwill with its most influential board member. (As well as, Twitter confirmed as we speak that it East construct an edit button, and had began constructing it final 12 months.)

Nevertheless it’s additionally true that this kind of factor generally is a actual distraction for a CEO who has completely larger issues to fry. As Dorsey’s hand-picked successor, Agrawal was already going to face criticism that he was merely extra of the identical from an organization that struggled to reside as much as its potential. The truth that Dorsey left the board, nevertheless, had given Agrawal the chance to start out constructing Twitter in keeping with his personal plans.

Now that Musk is right here, nevertheless, together with his viral polls and stream-of-consciousness product solutions, Agrawal could battle to stability his personal view towards that of an unpredictable board member with a megaphone loads. stronger.

Probably the most well-known tweets on Twitter got here from Dick Costolo, who, after becoming a member of the corporate as COO in 2009, posted an notorious joke:

The joke is notorious as a result of it lastly got here true: simply over a 12 months after he tweeted it, Costolo was chosen by Twitter’s board of administrators to interchange then-CEO Ev Williams.

Musk is so chaotic that predicting what sort of duties he’ll tackle as a Twitter board member looks like a wild journey. However I can’t be the one particular person questioning whether or not he deliberately or unintentionally undermines the CEO.

If I used to be Parag Agrawal, I’d watch my again.