It was apparent from the very day Elon Musk agreed to buy Twitter, last April, that he had neglected to think a few things through. The whole thing seemed like an impulse buy, the way a regular person might order an expensive pair of shorts because they liked an Instagram ad, except in this case the shorts cost $44 billion. Two things appeared to be in Musk’s head. One was that it would be cool to own one of his favorite places, a posting machine that went brrrr whenever he typed some words into it and pressed a blue button. The other was that he could be a hero for “free speech,” at least in the portion of the conservative internet whose approval Musk, for whatever reason, seemed to crave. Some things that were either not in Musk’s head or not deemed important enough to stop him: What would happen if the stock market went down and the premium Musk already agreed to pay became an even more serious overpayment? (It did.) What if it became clear that his dealings with Twitter would cause big headaches for shareholders in Tesla, the company whose shares make up most of his net worth? (They did.) What would happen if these things conspired to force Musk to find a way to turn profits at Twitter, a company he insisted he wasn’t buying for economic reasons and that has historically not made a lot of money, when it made any at all? (Yep, this too.)
These were all foreseeable issues. Musk did not notice them or did not mind them for a while. Then he changed his thinking, and he spent some time trying to nuke his own acquisition. That did not work, and now this steaming pile of posts is his personal and financial responsibility. Not good! Musk made a lot of mistakes in this process, but a fundamental one was thinking he could both have cake (his status as a beloved protector of free speech for very online conservatives and heterodox types) and eat cake (maintaining Twitter’s critical advertising revenue stream while catering to his new internet friends). Advertising has recently accounted for about 90 percent of Twitter’s revenue, fluctuating a bit depending on the quarter. Advertisers demand content moderation, which Musk had spent months signaling he wanted to roll back in the name of free expression. In his week and a half of owning Twitter, Musk has laid off about half the company, including a comparatively light but still big 15 percent of people who worked on content moderation. Some content moderation is fine—for example, in response to Twitter accounts that impersonate Musk. He hasn’t yet announced sweeping changes to Twitter’s policies, but it doesn’t feel like a good moment to trust in Twitter’s ability to facilitate healthy conversations. As a result, some advertisers have stopped buying space on Twitter. Musk calls this “extremely messed up” and says it’s part of an effort to “destroy free speech in America” by left-wing activists who are pressuring his would-be ad buyers.
It’s a tough scene. By the time Musk closed on the deal in late October, he had been signaling for a while that he’d do the job as more of a businessman than a free-speech ideologue. Musk probably feels as if he’s doing that, because he has only posted a Nazi meme, told people to vote Republican, and tweeted and deleted just one conspiracy theory about Paul Pelosi. He has not let Donald Trump back on to the platform. He has not ended content moderation altogether. Musk earnestly believes, I think, that he’s acted in good faith to keep Twitter’s advertisers comfortable. Of course, he has not done a great job. Musk’s main misjudgment on this front was the impression that he, Elon Musk, is more powerful than the American advertising industry. A guy who is used to being told that he’s right has heard from many people who think he’s wrong, and the trouble for Musk is that some of those people give Twitter a lot of money.
The tale goes something like this: Some notable Twitter advertisers have paused their expenditures with the site. General Motors, General Mills, and Audi are some of them. But contrary to Musk’s version of events, the problem is less that leftists are bullying the company that makes Cheerios and more that Musk is not as good at business as he thinks he is. Advertisers don’t like to run their ads in places where they might appear alongside abuse, harassment, spam, racism, misogyny, slurs, and the like. The typical way to make advertisers comfortable—to ensure what they call “brand safety”—is to limit speech on a platform. This poses an obvious problem for a self-described “free speech absolutist” who has telegraphed that he wants to make the platform friendlier to the kind of people who bristled at Twitter’s making it more difficult to post uninhibited hate speech, election denialism, and the like.
It’s a problem, but maybe a manageable one. Twitter has, or had, a bunch of sales staffers who have fashioned careers out of making ad buyers comfortable enough to buy inventory on Twitter. I don’t know how many it has now, but the answer is less. Here’s a useful bit of reporting, in tweet thread form, from technology journalist Kara Swisher. In short: One trusted Twitter salesperson, the company’s chief revenue officer, left her job after he took over. Another sales executive whom ad buyers trust got fired after taking Musk into a meeting with some of those buyers. Otherwise, everything’s great. Shot:
And another shot:
It isn’t clear whether the executive Musk fired was one of the people Twitter asked back to their jobs almost immediately after laying them off. Anyway, Musk believes this is the left’s fault. He apparently blocked one of the marketers who questioned him in the course of these meetings.
Musk is behaving unseriously. He has threatened a “thermonuclear name & shame” of companies that stop advertising on Twitter, which would be a great way to build lasting and productive relationships with those megacorporations. There are very few insincere boycott gestures that Twitter conservatives will not at least superficially entertain, but this may be the one. “We are going to stop eating Cocoa Puffs because General Mills paused an ad campaign on Twitter” is almost certainly too much even for the most internet-addicted, Musk-loving activist to sustain for more than five minutes. To this point: Feverish devotees of MyPillow have yet to bring Walmart to its knees. Musk seems to lack a fundamental knowledge of how advertising works, and maybe that makes sense; Tesla has not historically done it.
Whether Twitter loses ad business or not, Musk has plans to try to make money in other ways. As he said during his real-time negotiation (or whatever) of Twitter subscription pricing with Stephen King, Twitter can’t rely exclusively on advertisers as it has more or less for its entire existence. Unfortunately, the thing Musk picked to start making money in other ways is a bad idea that will probably cut into his advertising business rather than operate independently of it. He has said he plans to charge $8 a month in exchange for verified accounts with blue checkmarks and “priority” in how users’ tweets travel about the platform. That plan would strip Twitter verification of its traditional value as a marker of authenticity and legitimacy, which could make Twitter a less trusty place to get news or hear from public figures. Musk is maybe starting to realize this; the new new plan, according to the Verge, is to leave current verified accounts alone. But that doesn’t account for the possibility of people launching misinformation campaigns and paying for verification to help them succeed. Advertisers do not like being associated with chaos and having no idea whose “verified” tweets might wind up alongside their ads. Musk’s conservative base is going to have to slowly come to grips with the reality that he cannot be the champion they want him to be while still rolling in ad dollars. (Here’s an example!) But this hell is the one Musk willingly bought into. Advertisers, not the cheerleaders in the replies to his tweets, are now his real patrons.
Musk cannot have had that much fun since assuming control of Twitter. He had come to his senses, months in advance of the deal’s closing, that it wouldn’t actually be good to own this company, which he loaded up with debt in the course of acquiring. There has to be a natural feeling of invincibility that comes with being the richest person in the world, and being forced at lawsuitpoint to buy a company you don’t want has to pierce that armor at least a little. If you have what Musk has, you are by definition not used to being put in your place. The Securities and Exchange Commission can’t really do it, much less most of the people Musk encounters every day. However, Twitter’s old board of directors pulled it off when they beat him over the head with lawsuit discovery documents and backed him into closing their deal. That required months of patience and painstaking lawyering, and a lot of people thought, right up until the end, that Musk would win anyway. The latest group to put Musk in his place has been a small group of advertising buyers representing big companies. And unlike the legal team that completed its humbling of the billionaire a few weeks ago, all these people had to do was stop spending their money for a couple of days.