Elon Musk and Twitter’s Business Are on a Collision Course
As Twitter’s revenue explodes due to its brand safety push, Musk wants to return it to the freewheeling times of old
Twitter’s toughest business challenge has long been convincing advertisers that it’s a safe place to spend money. The service is fast-moving, emotional, and wildly unpredictable. So your ad — depending on the moment — could appear next to a funny meme or a neo-Nazi flame war. For many marketers, that’s been a reason to stay away.
To solve this problem, Twitter’s recently turned to vigorous content moderation. A company that once deemed itself the “free speech wing of the free speech party” now aggressively polices speech — sometimes to a fault. As it’s become more “brand safe,” ad dollars have poured in. Last year, Twitter made $5.08 billion, up 37% from the year before, its best year on record.
With its business taking off, Twitter is now poised for a fascinating conflict with Elon Musk, its newest board member and largest independent investor. Musk, who bought 9.1% of the company, is not your standard activist investor. Typically, when people make such moves, they do so with the conviction that they can make money by driving change within the business. But Musk seems more interested in changing Twitter’s product and policy, even if it comes at the expense of its bottom line.
Musk has, for instance, criticized the content moderation that’s boosted Twitter’s business. As he was buying his shares last month, he said that “failing to adhere to free speech principles fundamentally undermines democracy” and then asked if a new Twitter competitor was needed. Apparently, he decided to pursue reform from the inside, and this week promised “significant” changes ahead.
Though Musk may have a hard time changing Twitter policy, he’ll inevitably be at odds with the company’s business operation if he pushes a content moderation rollback. Few Twitter employees cheered Musk’s involvement this week, and the uncertainty around the business likely factors heavily. This isn’t about politics, as some say, but revenue. Advertisers want comfort. Musk wants Twitter to return to its freewheeling roots. And that places him on a collision course with the…