While everyone is busy talking about the Twitter Blue feature list and its price point, I would like to look further ahead and make some Twitter predictions.
At this point, we know that Elon Musk has freed the bird and taken the data treasure trove that is Twitter private. The Chief Twit is now running a technology company that struggled to post profits in recent years. We are talking about a default dead company. My predictions somewhat ambitiously seek to imagine what Musk will do to turn Twitter into a default alive company.
To add context, I am writing this post a few days after the hawkish Federal Reserve Chair, Jerome Powell, said, “it’s very premature to think about pausing” when referring to interest rate hikes—in summary, labelling inflation “transitory” roughly a year ago was a horrible call by the Fed because 2023 looks like a tough economic year. And we know that advertising budgets are usually the first to be cut during a recession.
The Here and Now
- In advertising parlance, brand safety refers to measures that protect a brand’s reputation when advertising. There is industry uncertainty around algorithm-driven programmatic advertising, leaving only higher-end direct deals until safety assurances from Twitter exist. Correspondingly, Musk has announced a “massive drop in revenue“.
- Reducing Twitter’s headcount by half is in keeping with a broader tech industry play. With Q3 earnings down across the technology sector, scrutiny is on costs. Therefore, Twitter’s redundancies broadly align with other US tech companies, even if culling staff via email is harsh. Even payment giant Stripe is downsizing! Musk is setting the tone for tech companies as they work toward economic efficiency. However, I suspect that a handful of irreplaceable staff will return.
- Twitter will certainly be in the spotlight during the US midterm elections later this week. It will be a test of the political ramifications of the acquisition as some seek more significant content moderation and others advocate for less. Musk may find himself in a no-win situation in the court of public opinion.
2023 and Beyond
- The big picture—Twitter is on its way to becoming a WeChat-style super app with payments. By going private, Twitter will have fewer regulatory requirements and management time and effort can concentrate on running and growing the business with fewer external distractions. It will be a welcome change for a company that has been in the spotlight since Musk announced his intentions to buy the company. Let’s remember that Musk is a part of the Paypal Mafia.
- A bot account is usually anonymous, often new, and posts frequently, not necessarily with new content but with retweets. Twitter Blue creates a hierarchy that relegates bots in the ecosystem precisely because of these criteria. While no single factor is a bot giveaway, Twitter will find creative ways to reduce the bot issue.
- A DOGE-related pay-to-play strategy will develop around commenting, serving as an economic disincentive for longtail bot activity. Alas, well-funded bot actors will continue to evolve.
- Binance CEO CZ Zhao invested $500 million in the acquisition of Twitter. The cryptocurrency exchange is the largest in the world in terms of daily trading volume; therefore, we should expect crypto integration on Twitter, initially in the form of wallets. The launch of the Binance Bluebird Index is a sign of what is to come.
- A micropayments-based news content approach creates a win-win with publishers while diversifying income streams.
- Rightwing microblogging platforms will likely lose traction as Twitter positions for free speech.
- The Twitter headquarters moves from San Francisco, California, to Austin, Texas. Being physically closer to the Tesla HQ mitigates investor concerns about split loyalties.
“As of the second quarter of 2022, Twitter had 237.8 million monetizable daily active users (mDAU)”, according to Statista. Whatever happens, it will be of importance.
That’s a wrap. I’ll check back on this list in a few weeks.
Thank you for giving me the gift of your time and attention.