Elon Musk is by no means stupid. No one who creates his own company and in the process becomes one of the world’s richest people can do so without having considerable acumen in some areas of life. But such people can be, and often are, jerks and narcissists who get carried away by their success in one area to think that they somehow have a general ability to succeed at whatever they do that they can apply anywhere. That is what seems to have happened with Musk. Musk was a highly successful user of the Twitter platform, having close to 100 million followers, and was able to use it to sway financial markets and bring attention to himself. This must have made it seem that he could easily run it even better and draw even more attention to himself and was why he rashly made an offer to pay $44 billion for it, a figure that analysts said was way too high. After he realized that, he tried to back out of the deal but was sued and had to go through with it. After being forced to buy Twitter, Musk said in a tweet that he did so not “to make more money. I did it to try to help humanity, whom I love”. And there was much laughter in the land.
He now he finds that not only will it be hard to make money, he is messing up even the basic running of the company. And nothing exemplifies his ineptitude than the blue check mess.
For those few people unfamiliar with Twitter and its blue checks, it began as a way to ensure that the people whom the Twitter handle represented were the actual ones and not some hoaxers. This required people to apply for the blue checks and, after some vetting by the company that they were who they said they were, they were given the check. For free. Of course only those who felt that they really needed this layer of verification applied and were awarded it. Many of them were journalists, big corporations, celebrities, and others who either felt that it was important that people trust what they said or felt the need to protect their image from random people who could pretend to be them and tweet things out that damaged their ‘brand’. So the blue check was not initially meant to be a status symbol but soon came to be seen as such.
Musk, who seems to want to project an image of himself as a populist, seemed to have rashly decided that the blue check was elitist. Fair enough. It had become seen as a sign that one was a significant person in some way. But he also seemed to feel that it could be a source of much needed revenue since advertisers were shying away from Twitter after his takeover, and thus that it could be given to anyone who wanted it provided they were willing to pay $7.99 per month.
In effect, he was expecting large numbers of people to pay for a status symbol that was no longer a status symbol. After all, if you remove the vetting process that was behind the blue check, then you take away the very thing that gave it value in the first place. And to no one’s surprise, the internet being the internet, that lack of vetting led to chaos with hoaxers gleefully taking their chance to have fun, causing the new system to be abruptly withdrawn.
Twitter’s relaunched premium service – which grants blue check verification labels to anyone willing to pay $8 a month – was unavailable on Friday after the social media platform was flooded by a wave of impostor accounts approved by Twitter.
The latest move caps a chaotic start for the new subscription service, one of the first major changes made by Elon Musk after taking over the company two weeks ago.
Before his $44bn purchase of the company, “blue check” was granted to celebrities and journalists verified by the platform – precisely to prevent impersonation. Now, anyone can get one as long as they have a phone, a credit card and $8 a month.
But the new service swiftly fell victim to impostors – with users parodying everyone from Pope Francis to George W Bush. The pharmaceutical giant Eli Lilly & Co was forced to apologize after an impostor account tweeted that insulin was free. Nintendo, Lockheed Martin, Musk’s own Tesla and SpaceX were also impersonated as well as the accounts of various professional sports figures.
There are now two categories of “blue checks” and they look identical. One includes the accounts verified before Musk took the helm, and notes that “This account is verified because it’s notable in government, news, entertainment, or another designated category” – a message that can be seen by clicking on the checkmark itself. The other notes that the account subscribes to Twitter Blue.
On Thursday, Musk tweeted that “too many corrupt legacy Blue ‘verification’ checkmarks exist, so no choice but to remove legacy Blue in coming months.”
Twitter Blue was not available on the platform’s online version, which said signup was only possible on the iPhone version. But the iPhone version did not offer Twitter Blue as an option.
Twitter also once again began adding gray “official” labels to some prominent accounts. It had rolled out the labels earlier this week, only to kill them a few hours later.
They returned on Thursday night, at least for some accounts – including Twitter’s own, as well as big companies like Amazon, Nike and Coca-Cola, before many vanished again.
Celebrities also did not appear to be getting the “official” label.
In an effort to cut costs Musk also laid off half the Twitter workforce. But again he acted rashly, having to call some of them back when he belatedly realized that they were performing essential services. Top officials have left or been fired, creating a further sense of uncertainty.
Yoel Roth, the head of safety and integrity who had been deputized to publicly address concerns advertisers and users had about the platform, is reportedly the latest to leave the company.
The departures began on the same day Elon Musk addressed employees for the first time, saying that “bankruptcy isn’t out of the question”, according to multiple reports.
The day began with the resignation of three top security officials – chief information security officer Lea Kissner, chief privacy officer Damien Kieran and chief compliance officer Marianne Fogarty – prompting warnings from the Federal Trade Commission (FTC). (Twitter reached a settlement over privacy issues with the FTC in May.) Following those departures, Roth and Twitter’s head of client solutions, Robin Wheeler, also left the company.
Roth and Wheeler had just conducted a livestream with major advertisers to try to assuage their concerns about instability at Twitter. Their departure almost immediately afterwards is hardly going to inspire confidence.
In an email to employees and a subsequent staff meeting, Musk did little to inspire confidence in the company’s future. In one email, Musk described the dire economic circumstances the company was in and how important he believed its subscription service, Twitter Blue, was to its future.
“Without significant subscription revenue, there is a good chance Twitter will not survive the upcoming economic downturn,” Musk said in the email. “We need roughly half of our revenue to be subscription.”
“I have never seen a billionaire begging for your $8 this much,” said Derrick Johnson, the president of the NAACP. “Clearly, our efforts – calling on companies to pause all advertising on Twitter – are working. Corporations need to be held accountable, and Twitter is no exception. Hate speech and disinformation have no place anywhere.”
In 2021, Twitter had revenues of $5 billion, of which $4.5 billion was from advertisers. If it loses half its advertising revenue, it would require over 23 million new subscribers to the now devalued check mark to make up for that loss. Formerly, there used to be just 423,000 blue check accounts. Of course, Musk could subsidize Twitter by selling his Tesla stock but how long would he be willing to bear that loss? As the late senator Everett Dirksen famously said, “A billion here, a billion there, and pretty soon you’re talking real money.”
Jon Schwarz accurately predicted that Musk would rue the day that he decided to buy Twitter because it would become a nightmare. Musk is now whining that it is taking up all his time. Schwarz now has a follow up article explaining why Musk is in such a bind.
Let’s start at the beginning. It costs money to operate a media corporation. Even ones that are privately held, like Twitter post-Musk takeover, require revenue to operate.
One potential source is advertising. In 2021, Twitter had revenues of $5 billion, 90 percent of which came from ads.
So in a business like Twitter’s, your customers are the advertisers, and your product is the attention of your users. Unfortunately, Musk felt that Twitter’s previous managers were left-wing fascists who hated free speech because they knew their statist blue-hair ideology couldn’t survive the light of day. Musk was sure things would be different if he were managing Twitter. Now he is. Let the freewheeling, raucous political debate begin! No sacred cows, no safe spaces.
Except Musk immediately discovered that advertisers hate freewheeling, raucous political debate.
This is why Twitter was the way it was before Musk bought it: not because of the politics of its staff, but because advertisers demanded it. Likewise, it’s why its advertising has now fallen off a cliff.
So even though Musk doesn’t understand precisely why advertisers dislike free speech, he is correct to believe that they do. He’s therefore moved onto the next possible source of revenue: subscriptions. According to various reports, he hopes to make subscriptions the source of at least 50 percent of Twitter revenue.
But why would anyone pay for Twitter? One answer would be to see fewer ads. Except people willing to pay for Twitter are going to be the audience that advertisers most want to reach: heavy users with money. This is why Twitter’s specialists crunched the numbers and informed Musk that Twitter would plausibly lose money on many $8/month subscribers.
Then there’s the basic question of fairness. If you want to create a vibrant digital town square, as Musk has said he does, how can you exclude those who can’t afford $8/month — which is many Americans, but even more of Twitter’s users outside the U.S.? You can of course lower the price for them, but then subscriptions are going to be even less lucrative.
This is why Musk is now thrashing around in incompetent fury. He enthusiastically impaled himself on the horns of this fundamental dilemma of political speech, one that no one has ever solved. He could have avoided his hilarious nightmare if he’d just read a few books with a radical perspective on the media. But people who do that tend not to become the richest person on earth.
Musk has also reportedly told employees that they must spend at least 40 hours per week in the office or be fired. He really knows how to improve employee morale at a time when they have great anxiety, doesn’t he?
There is now talk of Twitter going into bankruptcy. While the fall of a rich and obnoxious jerk like Musk, a right wing Twitter troll who is now being trolled by others, can provide a deep well of schadenfreude, we should not forget that the chaos at Twitter is resulting in a lot of people losing their jobs because of one person’s ego, which is no laughing matter.
Musk is a person of considerable energy and skill at making money. Who knows, maybe he will surprise us all by taking this albatross and making it into a swan.
It is hard to tell what the hell is going on with all these different check systems that come and go. Desi Lydic tries to explain.