By Tae Kim
There is plenty of skepticism over Elon Musk's Twitter deal, with some playing down the buyout as a vanity project. But there's another possibility here: Musk could spark a turnaround and remake social media to society's benefit.
Assuming the deal goes through, it would be the first time Twitter (ticker: TWTR) has a technically oriented power user running the company. Those experiences should give Musk an edge in helping Twitter solve many of the issues that have long plagued the company.
Despite spending nearly $4 billion on research and development over the past five years, Twitter has little to show for it. To the glee of its advancing competitors -- including TikTok and Telegram -- the company's core offerings have gone basically unchanged for a decade. Twitter has struggled even to keep up with the competition, shuttering its short-video app Vine and its Instagram Stories clone known as Fleets.
Twitter could easily save $2 billion annually by reducing ineffective investments in R&D, sales, and marketing. Musk could put those funds to better use. On hiring, he has a successful track record of attracting technical talent at his private companies. In terms of marketing, Musk generates more free publicity than anyone in the world, which would allow Twitter to slash its advertising budget.
Beyond the finances, going private is a big deal for Twitter. It would enable the company to make difficult decisions about the long-term success of the platform without myopic pressures from Wall Street. Musk has already mentioned some obvious areas of improvement, such as culling the spam accounts that make Twitter tedious to use. But there is more he can do to improve the product.
One of Musk's first efforts should be to improve Twitter's recommendation engine to encourage users to follow Twitter's best accounts, which include some of the smartest, funniest, and most fascinating people in the world.
Musk also should emphasize and improve Twitter Communities, a fairly new feature that allows users to follow conversations that match specific areas of interest.
Ultimately, Twitter needs to revamp how the platform elevates and prioritizes content. The crux of the problem is that social-media platforms have been hampered by their ad-based business models, which are incentivized to amplify content that generates viral engagement, leading to more revenue, along with partisan and toxic content.
"The nastiness is extraordinary," former Walt Disney CEO Bob Iger once said about his time on Twitter. "You turn and look at your notifications and you're immediately saying, 'Why am I doing this? Why do I endure this pain?' "
But, with Musk's backing and Twitter's advantages, there is no reason the social-media platform can't make users happier and smarter. One way to achieve that aim is for Twitter to copy some of the best features from Reddit, the privately held social-media site that uses crowdsourced tools like voting to surface the most substantive posts.
In a podcast interview in November, Instagram co-founder Kevin Systrom said social media was ripe for disruption from a start-up that can figure out how to make a discovery mechanism for higher-quality content, while avoiding the perils of ad-based engagement models that reward bad-faith actors who use emotionally divisive posts.
The future of social networks "is far less about people manipulating distribution and far more about, is this content good?" Systrom said. Twitter, under Musk, can be the company that finally emphasizes content over distribution.
Meanwhile, Twitter can and should supplement its revenue by creating a more comprehensive paid subscription service. Avid Twitter users would love to pay up for an ad-free product that offers better personalization and more-advanced messaging features.
At first blush, these ideas may contradict Musk's stated dislike of content moderation and his focus on free speech. But, in reality, Musk can satisfy his desires for a more unfettered platform while improving the quality of conversation.
By defeating spam bots, he's already making a value judgment on a tweet's content. Threads filled with insults and harassment would come to a quicker end if the platform focused on amplifying quality discourse from real people. This wouldn't be censorship, but a way to improve the experience for all users.
Making Twitter into a spam-free platform with a higher signal-to-noise ratio would eventually increase usage and accelerate growth, making the company more valuable for both Musk and users.
The world's richest man has the means and the capability to fix our social-media discourse. Musk may get richer still, while once again helping humanity in the process.
Write to Tae Kim at tae.kim@barrons.com
$(END)$ Dow Jones Newswires
April 29, 2022 19:03 ET (23:03 GMT)
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