Musk’s sporadic decisions have caused significant changes in the bird app – but are they for better or worse?
- Since Elon Musk took over Twitter, the app has experienced multiple makeovers and outages.
- The value of the app was slashed by more than half since October, with most of the app’s top-paying advertisers opting out, leading Musk to resort to different cost-cutting measures and monetization efforts to generate revenue.
- Twitter’s future remains vague as the company reportedly merges with X Corp, while its CEO sets up new AI projects.
If you’ve been using Twitter for the past couple of months, you're no stranger to its frequent makeovers.
At some point, Twitter's original logo was swapped with a Shiba Inu emblem synonymous with the Musk-backed Dogecoin cryptocurrency.
Several times, users couldn’t even load pictures and videos, or access external links, let alone see tweets due to recurring outages, with the CEO himself often reacting to the mishaps in memes.
But despite the app’s usability issues, one could only ask: How is Twitter really doing?
Twitter Drops in Value
Late last month, the billionaire CEO declared the value of Twitter to be at an estimated $20 billion – less than half of its $44 billion value at the time Musk bought it last October.
In the email he sent to his employees last month, Musk explained that the “inverse startup” remained to be in a precarious financial position, as it was once just four months away from being bankrupt. Additionally, he said the several rounds of layoffs among other cost-cutting measures were necessary to save the company from bankruptcy.
There are many factors that may have led to this point.
According to a study by the COVID States Project, Twitter experienced a nearly 9% drop in US users since Musk’s reign. From October 2022 to December and January, the number of Americans using Twitter decreased from 32.4% to 29.5%.
The survey was conducted on an estimated 25,000 Americans, with the drop in users coming mostly from Democrats. This could be due to Elon Musk and his questionable view on politics. Despite identifying as an independent, he actively participated in the re-platforming of far-right figures such as Andrew Anglin and Laura Loomer.
Other possible factors include the company losing its top-paying advertisers.
A report by analysis firm Pathmatics revealed that the monthly revenue generated by the app’s top 1000 advertisers suffered greatly from October to the end of January, dropping from $127 million to $48 million.
While Musk said in a recent BBC interview that Twitter’s advertisers were returning and the company could finally be “cashflow positive this quarter if things keep going well,” some analysts remain skeptical of his word.
Insider Intelligence analyst Jasmine Enberg believes that many big agencies still haven’t advised their clients to end their pause on Twitter advertising. “We expect Twitter’s worldwide ad revenues to plummet by 27.9 percent this year as advertisers continue to pull back spending,” she added.
Reparations or Further Damage
To make the bird app more profitable, Musk has put most of his efforts into beefing up Twitter Blue, the $8-a-month paid service that allows users to special privileges.
Aside from the obvious blue check mark that indicates one’s account is verified, Twitter Blue has recently given subscribed users the ability to write 10,000-character-long posts and play around with bold or italic formatting in their tweets.
We’re making improvements to the writing and reading experience on Twitter! Starting today, Twitter now supports Tweets up to 10,000 characters in length, with bold and italic text formatting.— Twitter Write (@TwitterWrite) April 14, 2023
Sign up for Twitter Blue to access these new features, and apply to enable…
Musk also announced that Blue users can now offer their followers a subscription to their content, whether it be long-form posts or hours-long videos, with whatever they earn solely being theirs for the first 12 months.
For the next 12 months, Twitter will keep none of the money.— Elon Musk (@elonmusk) April 13, 2023
You will receive whatever money we receive, so that’s 70% for subscriptions on iOS & Android (they charge 30%) and ~92% on web (could be better, depending on payment processor).
After first year, iOS & Android fees…
However, in the process of making the paid service more appealing, users opting not to pay for Twitter Blue have been stripped from some vital in-app features.
Last month, Twitter announced that it was winding down its legacy verified program and removing the blue check mark from legacy accounts. This means only those subscribed to Twitter Blue will get the check mark, blurring the lines between real or fan-made celebrity accounts, personalities, news sources and the like.
Around the same time, the CEO announced through a tweet that only verified and followed users will pop up in one’s “For You” feed – meaning less visibility and engagement for those who don’t want Twitter Blue.
Musk also made a follow-up statement last week, moving his plans to remove the blue checks from non-paying users and businesses from April 1, and moving the final date to “4/20.”
But is the Blue effort enough to save the app?
With the latest metrics revealing that only 0.2% of Twitter’s total user base subscribes to the paid service, it may not be enough to make up for its overall loss in advertiser revenue.
According to Sensor Tower, spending by Twitter’s top advertisers like Amazon, IBM, and Coca-Cola had fallen 89% compared to September to October 2022, and Enberg believes Blue won’t suffice.
However, the analyst also believes that Musk is not all to blame, as Twitter’s decreasing appeal even before his takeover had contributed to the hesitation advertisers have already felt since the rise of Donald Trump.
Twitter Merges With X Corp, Musk Purchases GPUs for Potential AI Project
Despite the growing prediction of Twitter’s downfall, Musk's recent activity indicates the CEO might have other plans for the bird app.
Last April 4, Twitter Inc revealed through a court filing that it “no longer exists” and is merged with X Corp. While the merger has yet to be announced to the public, some speculate that “X” is part of Musk’s efforts in accelerating the creation of an “everything app” similar to China’s WeChat.
Buying Twitter is an accelerant to creating X, the everything app— Elon Musk (@elonmusk) October 4, 2022
The news has also left several netizens confused, as the company deemed "Twitter Inc” continues to face several lawsuits related to censorship concerns, vendor complaints, violation of labor laws following the layoffs, among others.
In an even more unpredictable turn of events, Musk also teased the possibility of developing a new generative AI project trained by Twitter’s own cloud of data – despite signing an open letter calling for the pause of AI developments. A Business Insider report last week details the CEO is “committed” to the effort as he purchases 10,000 GPUs to be used at one of the company’s data hubs.
He also recently hired former Alphabet AI researchers Igor Babuschkin and Manuel Kroiss, supporting claims that Twitter will utilize a new AI tool.
In the Spotlight: The Fate of Twitter
So, is Twitter really dying? If this trending snippet of Musk's interview with a BBC reporter is any indication, only time can tell.
In his letter to employees last month, Musk remained optimistic that the company has a “clear but difficult path” of reaching a $250 billion valuation. After all, the billionaire did mention that he plans to “stabilize” the company first before handing the big task of CEO to someone else by the end of the year.
Given his reputation of being spontaneous and unpredictable, it’s hard to see a solid trajectory of where Twitter is heading, and the question of whether he can save the app remains to be a puzzle — maybe even a miracle at this point.