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Why Elon Musk Is Perfect for Twitter

26/5/2022

by Jon Rowe

Although the deal for Twitter has hit a stumbling block, with Elon Musk insisting that he receive documentation that outlines the proportion of spam accounts that exist on the platform, it is likely that it will be concluded in the coming weeks or months. Many have questioned the appropriateness of Elon Musk to lead one of the most influential social media platforms in the world.  Some claim that he will use the platform to increasingly spread misinformation at an accelerated pace, while others suggest that he will vastly improve the platform and champion free speech – something that many internet users feel has been unfairly curbed during the last couple of years.

 

Regardless of whether you think Elon Musk will use the platform for good or evil, one thing is for sure… he will bring innovation and change. This is arguably something that is needed, especially when the social media space has largely been dominated by Meta across the past decade.

From an investor’s perspective, Twitter has always been a company that has potential, yet its lack of innovation has really limited the level of growth that the company has achieved. Twitter have largely struggled to effectively monetise the platform as a whole, let alone provide new services that compete across multiple categories.

 

On the other hand, this is something that Meta has done exceptionally well at and the numbers tell you everything that you need to know. Last year, in 2021, Twitter recorded revenues of $5.08bn, while Facebook recorded $117.93bn. Despite both platforms being popular on a global scale, the business development of Twitter has been staggeringly slow.

 

Should Elon Musk become the owner of Twitter, it is obvious that this is something that will change. Elon has a track record of going into a business and shaking things up for the better. This is exactly what he did with Tesla, which actually wasn’t so well-known before he got involved.

 

How exactly he will do that with Twitter is unclear, though it is likely that he will come into the company and implement major changes that improve the attractiveness, competitiveness and profitability of the firm.

A key advantage that Musk will have as the new owner of Twitter is that the company will be private. This will take away the pressures involved with keeping shareholders happy and maximising shareholder wealth. This is likely to have been something that contributed to the stagnation of business development at the company previously, with senior management being unable to navigate the direction of the company.

 

Although the world will be watching anyway, a private Twitter will be a Twitter that is focused on itself and not the interests of outsiders. This will potentially benefit the company hugely, as Elon Musk will be free to take risks to improve the company, without fearing the backlash of outside investors.

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