Barely a week into owning Twitter, Elon Musk already looks like an emperor with no clothes.
Fortunately for him, there’s still plenty of time to assemble a new wardrobe.
With each passing day, Twitter’s new chief executive appears even more erratic and underprepared, leaving his core constituencies—users, advertisers, and employees—more confused than before. He continues to deliver mixed messages about Twitter’s values and publicly share half-baked, poorly reasoned plans via his personal Twitter account.
Consider that in the past 24 hours alone…
—Musk argued that eliminating the platform’s current identity verification “check mark” system, known as Twitter Blue, and replacing it with an $8-per-month subscription package would help Twitter “pay the bills” and “reward content creators.” But even if every one of the 424,000 currently verified users signed up, the new system would generate roughly no more than $40 million annually, or just shy of 1% of Twitter’s revenue in 2021.
—The Washington Post, citing an internal email it obtained, reported that Twitter is rushing to debut a feature that would let content creators charge users for viewing a video, with the company taking a cut of revenue. However, the tool carries numerous risks related to copyright infringement, the peddling of pornography, and profiting from graphic or obscene material, among other issues that could scare away advertisers.
—Musk continued to leave employees in the dark about their job prospects and the status of top Twitter leaders, even as six more executives headed out the door Tuesday, according to Platformer. Twitter staffers have received no official companywide communications from Musk or his team since the chaotic takeover.
The latest developments add to the growing list of perplexing behavior by Musk over the past week, ranging from haggling with author Stephen King over the price of Twitter Blue to tweeting out (and subsequently deleting) blatant misinformation about the attack on Nancy Pelosi’s husband.
And yet, even amid the Musk-led three-ring circus, the broad outlines of a Twitter revival are in place.
While the executive departures will cause some short-term instability, Musk’s willingness to shake up Twitter’s leadership signals a new era at the stagnant company. In a similar vein, his emphasis on quickly pushing out new features illustrates an ambition and willingness to fail that had been sorely lacking at Twitter, which earned a reputation for aimlessness and timidity.
“You can see the speed of change in Twitter is much faster now,” Binance CEO and Twitter equity investor Changpeng “CZ” Zhao, said Tuesday at Web Summit. “Not all [new features] will stick. I would actually say probably the majority of them will not stick. But that’s how you figure out the rest of the 10% of the features that will stick: by defining a lot of new features.”
Musk also appears to acknowledge the importance of embracing video and empowering creators—two areas in which Twitter fell far behind rivals like TikTok, Instagram, and YouTube.
As Axios first reported Monday, Musk has directed Twitter engineers to reboot Vine, its long-defunct video-looping feature. Then, on Tuesday, Musk tweeted that creator payments are “absolutely essential” to incentivizing content creation. (Whether Musk can turn these ideas into profit and user generators is very much uncertain.)
If Musk ultimately can revitalize the platform, he also has an opportunity to build on Twitter’s weak ad-tech infrastructure. As Adweek reported Wednesday, advertisers have been underwhelmed by Twitter’s tools for buying spots and measuring engagement, particularly when compared with Facebook and TikTok. That deficiency, combined with the larger and more diverse user bases on rival platforms, has held back Twitter’s ad revenue.
“Personally, I’m actually really excited by the Elon Musk takeover,” Kevin Renwick, media director of ad agency Mekanism, told Adweek. “Twitter is long overdue for an advertiser evolution.”
Musk and his team still need to execute on any grand plans—and they’ve shown little evidence of competency so far. If they can, don’t be surprised when Musk gets the chance to dress down his critics.
Want to send thoughts or suggestions to Data Sheet ? Drop me a line here.
Jacob Carpenter
NEWSWORTHY
Still working out some kinks. Netflix is preparing to launch its ad-supported streaming tier on Thursday, even as it continues to negotiate with major studios over placing commercials within their shows and movies, the Wall Street Journal reported. The streamer plans to debut its ad-supported service in 12 countries, including the U.S. And Canada, after a seven-month rush to launch ahead of Disney’s similar offering. However, Netflix hasn’t struck deals for ad placement with Disney, NBCUniversal parent Comcast, Warner Bros. Discovery, Sony Pictures Television, or Lions Gate Entertainment.
Back in the three-comma club. Amazon’s market value dipped Tuesday below $1 trillion for the first time since April 2020, a reflection of investors’ concerns about the tech conglomerate’s near-term fortunes. A slowdown in e-commerce sales and cloud computing growth have weighed this year on Amazon’s stock, which is down 44% year to date. Amazon shares slipped another 2% in midday trading Wednesday.
It could’ve been worse. AMD’s third-quarter earnings and revenue fell fractionally short of analysts’ estimates, but the chipmaker’s shares still rose 2% in midday trading Wednesday after its current-quarter outlook calmed fears of a dramatic slowdown in sales, Barron’s reported. Company executives forecasted fourth-quarter revenues of $5.5 billion, well off Wall Street’s expected guidance of nearly $6 billion. Still, the slight bounce in share price suggests investors were bracing for an even bigger miss amid a global pullback in PC spending.
Just asking a few questions. U.S. Treasury Department officials are reviewing whether they have the legal authority to investigate ties between Twitter and foreign investors with stakes in Elon Musk’s $44 billion takeover of the social media company, the Washington Post reported. Such inquiries are considered routine and often end without additional scrutiny on an acquisition. However, the deal’s critics have argued that Musk’s business ties to China, as well as investments in Twitter by members of Saudi Arabia’s royal family and the kingdom of Qatar, raise concerns about user privacy and potential conflicts of interest.
FOOD FOR THOUGHT
Who will wear it best? Fast-fashion and e-commerce giant Shein is getting some competition, but aspiring rivals will need plenty of financial runway to succeed. The Financial Times reported Wednesday that Chinese e-commerce company Pinduoduo and TikTok parent ByteDance are investing heavily in the business of cheap clothing for Gen Z, a market currently dominated by Shein and Zara parent Inditex. Both companies have a built-in advantage, with Pinduoduo benefiting from an extensive supply chain and ByteDance capturing the attention of hundreds of millions of TikTok users. To succeed, though, the two companies will need to overcome Shein’s head start, particularly on the tech side.
From the article:
Analysts warn that the imitators will not find it easy to replicate Shein’s success.
Founded in 2008, Shein spent a decade building its supply chain and perfecting its prediction algorithms before experiencing explosive growth in the West. The company also uses artificial intelligence to predict future fashion trends.
“Shein has the first-mover advantage, which puts them in a good position” as newcomers flood into the market, Greeven said.
IN CASE YOU MISSED IT
Binance chief CZ says crypto is the ‘only stable thing’ in this this tumultuous financial environment, by Chloe Taylor
Tesla’s Elon Musk faces trial, again—this time over his $56 billion paycheck that’s the ‘largest in human history,’ by Christiaan Hetzner
Layoffs return to the crypto sector. That’s not entirely a bad thing, by Jeff John Roberts
How A.I. Is helping protect ecosystems in the Galápagos Islands, by Danielle Bernabe
‘Taking kickbacks, inflating invoices, stealing parts’: Former Apple employee pleads guilty to scamming tech giant out of $17 million, by the Associated Press
An unverified post about a China reopening plan has driven a $450 billion stock market rally for 2 days running, by Bloomberg
BEFORE YOU GO
No need to turn that car around. Way back in the late 1990s, backseat entertainment meant a tiny TV-VCR player plugged into the minivan’s cigarette lighter. Things have changed a little since then. As Axios reported Wednesday, Audi spinoff Holoride is launching a virtual reality headset that tracks with the movement of a car. The $700 hardware-and-software product connects via Bluetooth to a vehicle, then integrates the movement within a game or stabilizes video shown on the device. It’s a bit of a niche product, though Holoride hopes that parents will pony up to keep their kids entertained while shuttling them around. The headset goes on sale later this month in Germany and is expected to arrive in the U.S. In early 2023.
This is the web version of Data Sheet, a daily newsletter on the business of tech. Sign up to get it delivered free to your inbox.
