No Mercy No Malice

Fixing Twitter’s Broken Business Model

The social media giant’s toxicity and subpar financial results are one and the same problem

Every day, 187 million people open Twitter for news, entertainment, and a social connection. It is the real-time global communications network that sci-fi novelists envisioned. It is also a catalyst for conspiracy theories, a forum for hate speech, and a surprisingly lousy business.

In last week’s issue of New York magazine (February 1, 2021), I make the case that Twitter’s toxicity and subpar financial results are one and the same problem, amenable to one and the same solution. Fixing Twitter starts at the top — replacing an absentee CEO — and from there, changing the company’s business model. The potential rewards are worth it, both economically and socially.

The capitalist case

Since its IPO in 2013, Twitter has underperformed the market, growing its share price at just 2% per year. For years, I’ve advocated for a change in Twitter’s business model for both the good of the commonwealth and benefit to shareholders (Disclosure: shareholder). The need for this change is greater than ever.

Donald Trump’s election — and his prolific use of the platform — smeared Vaseline over the lens of this chronic underperformance. The traffic and engagement that Trump brought to the platform (26,000 tweets and 1,000 tags per minute) helped to reverse the 63% downward slide in Twitter’s stock price since its public offering. Tellingly, when Twitter banned Trump’s account, the stock immediately fell, shaving $5 billion off the company’s market cap, before slowly regaining ground.

This one-term “fix” came at great cost: The platform has become what political philosopher Hannah Arendt described as a “temporary alliance between the elite and the mob.” Arendt was talking about the rise of totalitarianism, but she could have been talking about the attack on the Capitol on January 6. All of this — Twitter’s weak financial performance and its toxic content — is the…