Elon Musk’s $44 billion Twitter purchase will not only mean big changes in the way the social media giant conducts business, but it will also affect users of the platform.
Musk’s stated intention for buying the company is to realign its mission. The Tesla and SpaceX CEO sees free speech as the immutable foundation upon which democracy rests and has been critical of how the social media giant has handled speech on its platform in the past.
“Free speech is the bedrock of a functioning democracy, and Twitter is the digital town square where matters vital to the future of humanity are debated,” said Musk after the news broke that Twitter’s board had agreed to his offer to buy the company at $54.20 per share — a major premium over where the stock was just a month ago.
Many of the changes will invariably focus on topics surrounding free speech and transparency, but the business model and the company itself will also experience an upheaval, given that Musk intends to take the company private. The process on the business side will entail a bevy of lawyers and mountains of paperwork. Twitter CEO Parag Agrawal has said it would likely take between three and six months for the deal to come to a close.
Darrick Mix, partner and head of the capital markets practice at Duane Morris, told the Washington Examiner that the agreement between Musk and the board appears to be a pretty standard and straightforward merger agreement.
The next step in the process is a shareholder meeting in which Twitter’s shareholders will get the opportunity to vote on whether to approve the sale. Federal regulators will also examine the proposed purchase, although they aren’t expected to try to block the transaction.
Mix said that for Twitter and Musk, it might be smooth sailing in terms of completing the deal, although there are a few potential obstacles that could be encountered. “As is standard in this type of merger agreement, there are possible ways for the Twitter board to terminate the deal with Elon Musk if they get a superior proposal from another potential buyer,” he said.
Musk will also be slapped with a $1 billion termination fee if he isn’t able to secure financing for the multibillion-dollar deal or if the plan to take Twitter private ends up falling through.
The fact that Musk wants to take the company private is telling about the coming course shift that is in store for Twitter.
By taking Twitter private, the primary advantage for Musk is that he will essentially have unilateral control over the business and how it operates. He has very precise views about the social media platform and its value to society and will use the power of controlling the company to make policy changes to reflect those beliefs.
Additionally, everything in Twitter’s filings will no longer be public, and Musk won’t have to file the same documents with the Securities and Exchange Commission or discuss things such as executive compensation and corporate strategy.
Mark Weinstein is the founder of social media service MeWe and an expert in privacy and free speech. Weinstein said he foresees Musk as retooling Twitter to have a “mission orientation,” meaning that instead of just operating the platform to make as much money as possible, Musk envisions a platform that operates under certain new standards.
One of the big changes will be with content moderation. Musk believes that Twitter currently has too heavy a hand in moderating who is tweeting and what people are tweeting about. While details about what the new platform’s speech policies will look like are likely months away, Musk has hinted at his vision for how users on the platform will be able to interact.
A big part of the updated user experience will likely come in the form of increased transparency, including about who is behind certain accounts. “I also want to make Twitter better than ever by enhancing the product with new features, making the algorithms open source to increase trust, defeating the spambots, and authenticating all humans,” Musk said.
Identity verification can be done in a number of ways, although given the millions of Twitter accounts that are out there, it will likely result in a massive user purge from the platform, according to Weinstein.
“Whatever your opinion is, it’s going to connect to you,” Weinstein told the Washington Examiner. “And this is very interesting because, in a certain way, it’s an invasion of privacy. On the other hand, it’s a way to guarantee that what people say is connected to who they really are so they can’t just propagate any kind of falsehood and be anonymous so nobody can really do a fact check even on the person.”
And while Twitter will likely hemorrhage millions of users as a result of Musk’s identity verification push, Weinstein said he also expects other users who have had their accounts suspended by the platform to be reinstated.
Twitter could also see a splash of users who might have sworn off the social media platform in favor of competitors such as GETTR, Parler, and Truth Social to rejoin Twitter because Musk has vowed to prioritize free speech. Those platforms rose in popularity as a backlash to Twitter’s current policies.
Additionally, there may be a big shake-up of Twitter’s executive board following the purchase. Weinstein expects there will be a shift away from technocratic executives in favor of a more mission-focused team.
In terms of a revenue model, Weinstein said there would likely be a retreat from so-called “surveillance capitalism,” which seeks to make a profit off customer data through means like targeted advertising.
There will probably be revenue loss from that shift, which could be made up through levers such as a subscription model, although Musk has pointed out that he doesn’t necessarily need Twitter to be a profitable enterprise because he is more focused on its mission rather than money.
“Twitter has experimented with a subscription model and failed at it, and that’s because there is no inspiration. Twitter can’t inspire its members to want to support,” Weinstein said.
With Musk at the helm and Twitter being reoriented to promote free speech, cut down on bots, and dampen propaganda, users might feel more inclined to support the company financially through some form of subscription that complements its free product.
All the coming changes are very much speculative. The changes will end up coming down to what Musk and his team think will best promote his vision of free speech and social discourse after the company is acquired.
“We just don’t have a good visibility into exactly how it will be governed after the transaction, but it appears he’ll control it and be able to shape it in accordance with his vision,” Mix said of Musk’s plans.
