One year on, Elon Musk consolidates Twitter's ruin

Dictatorial leadership for freedom of speech

Under Musk's ownership, Twitter has been subjected to many experiments, seemingly related to his mood swings and unconventional management style and approach.

The platform's plight in his hands has eroded Musk's wider reputation as a great businessman with a record of leading companies to billion-dollar levels.  Musk seems to have misjudged what Twitter is, the problematic responsibility of moderating content, and what it takes to run social media platforms so that they are respectful and respectable, particularly in the context of democracies.

Lawrence Lessig, a law professor at Harvard University, described Musk's self-styled absolutist position on free speech as a "very naïve view".

His lack of moderation on the platform has had significant consequences — not least financially. The most severe reaction came when its top ten advertisers cut their spending by 89%, from $71mn to $7.6mn last year after Musk acquired the platform, according to estimates from Sensor Tower, a research group. It said there were many reasons to worry about the safety and stability of the platform's brand.

There was an uproar among users, employees, and even general observers at the run of Musk's changes. His new approach was seen as unfair and illogical, silencing the voices of many or reducing their influence, including a ban on many journalists, including some who were critical of him personally.

He dismissed content managers who dealt with hate speech on the platform, as well as moderators, and dropped the site's well-known "blue tick" system that the company applied to verify some influential accounts. Instead, users could simply pay for this status, undermining levels of trust in the platform.  

His revolution began quickly.

As soon as Musk took the helm, he stripped the company of its most prominent executives and laid off about 5,000 employees – about two-thirds of the company's team, in the following weeks – running the app with a semi-skeleton crew tasked with realising his vision.

Musk himself stoked controversy with his own tweets to the point of being accused of racism, or at least sympathy towards racists.

Hate speech accusations

After a lull, such allegations worsened in late 2023. Musk publicly liked an X post supporting a conspiracy theory that Jewish communities push for "hatred against whites." 

This provoked an angry reaction led by the White House, the European Commission, and several investors. It prompted companies — most notably Apple, Disney, Comcast, IBM, Warner Bros., and Paramount Global, the parent company of CBS News — to pause their advertising on the platform.

He was accused of promoting "hate speech", drawing the attention of his 160 million followers to a post that would otherwise have gone unnoticed, along with the words "You have said the actual truth."

Soon, Musk rushed to Israel apologising. He met with its president, Isaac Herzog, and Prime Minister Benjamin Netanyahu. He agreed to allow access to the Starlink telecommunications service in Gaza, provided that it would operate only with the approval of the Israeli Ministry of Communications.

He stressed that he stood against anti-Semitism and anything that "promotes hatred and conflict."

The affair highlighted Musk's tendency toward outspokenness and his commitment to free speech. How much of a price X will continue to pay for it will become clear.

Even before this latest episode in a tumultuous year, Twitter's founder and former CEO, Jack Dorsey, criticised Musk for the negative change in the platform's reputation and its moral and financial decline.

These are the four main stages in Musk's year at the helm:

Stage 1: Goodbye Twitter

The first turning point was Musk's announcement last April that he had merged the social media giant with his X Corp, in a move to transform Twitter into a large-scale fintech app, or what is known as an "everything" app. He pointed to aspirations to become the most powerful fintech company ever via its 250 million daily active users.

But any such transformation has yet to arrive, other than in the controversial name change.

China already has an everything app – WeChat, which has 1.3 billion users in its home country alone. Musk saw the purchase of Twitter as a means of catching up in terms of users for his vision of an X along these lines.

The deal has effectively removed the Twitter brand and left the platform in its first existential battle.

Stage 2: Linda Yaccarino

The barrage of criticism faced by Musk when he was in personal, day-to-day control of Twitter led to a realisation that he had become the main reason for instability at the company and on the platform.

Many of the changes he made to X were based on his personal impressions of the app as one of the platform's most popular and active users, even before he acquired it. He polled users on whether he should step down, and they said yes.

He subsequently resigned from his position as Twitter CEO, retaining the roles of chairman of the board and chief technology officer.

Musk appointed Linda Yaccarino, an advertising pioneer and former top executive at NBC Universal,  as CEO in May 2023. She has a full in-tray. As well as dealing with the slump in advertising revenue, there are a series of lawsuits from former employees over their dismissals from the company.

Then there is the Securities and Exchange Commission, which is suing Musk to force him to testify about the deal to buy Twitter, amid scrutiny over possible securities fraud when buying company shares and alleged violation of federal laws.

Yaccarino is well-connected among major advertisers, as well as in politics and business. But big brands have continued to walk away, alongside an exodus of celebrity users, to newly resurgent rival platforms, most notably BlueSky, Mastodon, and Post.

The continued decline means the company's value is no longer worth more than $19bn in Musk's own view – this is the value of shares held by employees; the company estimates each price at $45. This is a decrease of 55% from the company's value when Musk acquired it in the $44bn deal, including debt.

Twitter's market value at the sale's closing on 27 October 2022 was estimated at about $41bn before trading in its shares was suspended. Musk has hinted that he wants to make X public again, but the tumble in the company's value will inevitably make that difficult.

Musk has devised a plan to cut ads and switch to paid subscriptions. Still, so far, the company hasn't been able to convince more than 1% of users to subscribe to its premium monthly service, generating revenue of under $120mn a year, according to Bloomberg estimates.

Yaccarino claimed there was "a return of 90% of the top 100 advertisers," but that doesn't mean they are spending at the same level even in a wider recovering market, which boosted Meta and Alphabet's recent quarterly earnings.

Stage 3: Threads attracts users

In the first week of July, the world woke up to a new chat app, Threads.

It was a clone of Twitter — launched by Meta's owner and Musk's rival, Mark Zuckerberg — and offered as a new feature on the Instagram app and described as a "Twitter killer".

Tens of millions of users signed up for Threads in record time. But take up also quickly cooled, stabilising at under 150mn. That is not small compared with the 225 million using X, down 11.6% under Musk, an audience established over 17 years, including the platform's time as Twitter. It is also enough to give advertisers an alternative.

And US ad revenue is down under Musk's tenure by about 59% year-on-year, according to The New York Times. Twitter brought in about $5bn in 2022, with 90% of its revenue from advertising.

For users, Threads offered nothing new other than an available alternative for "refugee" Twitter fans fleeing X.

Stage 4: Farewell to the bird

The removal of Twitter's world-famous and much-loved blue bird logo – alongside its name – was a landmark moment, and it grabbed the headlines.

It was time for the well-known songbird to make way for the more austere capital X logo, symbolising Musk's ambiguous future and unclear direction. The change overshadowed the promotion of the platform's new look and rebrand with AI-powered capabilities, heralded as "centred in audio, video, messaging, payments/banking".

Alongside the retreat from account verification and content moderation, it felt like a bleak new dawn for millions of users. It shook Twitter's status as a central, global news platform, with the demise of the centrally verified blue tick system doing particular damage.

Once powerful enough to fuel social and political change around the world, including in Arab countries, the Black Lives Matter movement in the US and a range of other vital issues, Twitter became known more for what was previously its darker underside:  disinformation, violence, and even terrorism.

Some influential figures have singled it out in connection with some of the biggest flashpoints in global affairs. Ian Bremer, a leading foreign policy expert, said the level of disinformation about the war between Israel and Hamas, "which is algorithmically promoted" on the platform, "is unlike anything I've come across in my career as an expert in political science."

Senior businessmen have spoken of the destruction of what was a globally successful brand. And in the wider media, references to X are still often followed by a term of explanation – "formerly Twitter". The name is proving as stubborn as its owner, at least in terms of its refusal to disappear.

X marks the future

There's no doubt that of the great legacy left by Twitter since its launch in 2006. And X retains some of that precious value, even if errors accumulate and the app remains at the mercy of Musk's volatile behaviour.

It still has loyal users, which may help prevent it from significantly declining further. Even Zuckerberg says his war pitting Threads against the old Twitter will be prolonged.

Whatever else, no alternative platform has evolved as yet to capture the central role Twitter once played in global political, economic, and media discourse.