Why is Tesla’s CEO set to buy Twitter for $61 billion?
T he world’s richest man, Elon Musk, is best known for running electric car company Tesla and rocket company SpaceX but he also has a long and combative history with Twitter. He has accused it of limiting the visibility of unpopular opinions, has been sued for fraud and defamation over messages he has posted, and has been a vocal critic of the company’s moderation policies designed to limit hate speech.
And now, since he has a spare $61 billion, he’s using it to buy the social media company for himself.
In Musk’s latest statement, he says he wants to make Twitter better. But how does he plan to do it? And what could the impact be for the service’s millions of non-billionaire users?
Why did Musk want to buy Twitter?
Twitter was founded in 2006 by tech entrepreneur Jack Dorsey (who left in 2021 and currently runs financial payments company Block). Twitter has hundreds of millions of users worldwide. About 18 per cent of Australians use the social media platform, half of them to consume news, according to the University of Canberra’s Digital News Report from 2021.
The service’s influential role in political discourse and the dissemination of news has made it a target of criticism. Some think the platform doesn’t do enough to encourage diverse views, or that it purposefully stifles certain views, or that it allows too much misinformation.
Elon Musk is one of the service’s most prominent users, and has also been one of its chief critics. Earlier in April he became one of the company’s largest shareholders with a 9.2 per cent stake, and Twitter announced he would become a member of its board. Musk immediately began promising changes at Twitter, including championing “free speech” and adding the ability to edit tweets. However, he ended up rejecting the board position, and returned a week later with an offer to buy the company outright.
On April 26, Twitter announced the sale had been approved by the board.
What does Musk want to change about Twitter?
Musk has said that Twitter should be all about free speech, which he thinks the company has failed to uphold. The platform plays an influential role in political discourse and the dissemination of news, but it is run by a relatively small company that has struggled with allowing complex and diverse discussion while managing issues of hate speech and misinformation.
Campaigns of targeted abuse have allowed communities of people to single out and punish individuals. Racial and misogynist hate speech is rampant, often powered by how easy it is to create many anonymous accounts. And networks of inauthentic accounts pump misinformation and disinformation throughout the service, often using bots, or software posing as people.
Twitter’s attempts to rectify this have included enforcing anti-hate-speech policies with bans and suspensions, both with human and automated moderation.
For Musk, a self-described meme lord and free speech absolutist, Twitter is doing too much. He’s previously stated that only illegal content should be removed. But he has another idea too: his latest statements refer to “authenticating all humans”, which would imply that every user on Twitter would need to prove they are who they say they are. In theory, this could eliminate bots and let personal responsibility take care of the hate problem, as people would be far less likely to post abuse next to their real name and photo.
But it raises a host of questions. Would people need to upload a passport or driver’s licence to prove their identity? Would Twitter want to deal with the implications of holding that data? How would that work for every country? Would each person be limited to one Twitter account? What about company or brand accounts? Would Twitter give up on the idea of anonymity entirely?
A second major change that Musk has foreshadowed involves the algorithm that Twitter uses to decide who sees what and when. Some complain the algorithm is too easily gamed by peddlers of misinformation or that it prioritises salacious content over the factually accurate. Others, including Musk, believe the algorithm allows Twitter to “shadow ban”, or secretly reduce the visibility of unpopular opinions and jokes.
Musk says he wants to make the algorithm “open source”, which in software terms generally means it’s posted in its entirety on the internet for experts to verify or inspect. In theory that sounds good but in reality there are big technical challenges problems with open sourcing an algorithm. They work by processing huge amounts of data, and it seems impractical for Twitter provide the public with access to its vast collection of user information.
Much has also been made of a potential Twitter edit button, which would allow users to tweak posted messages without needing to delete them. For Musk, who has been in legal or regulatory trouble more than once for the phrasing of his tweets, the value of an edit function is clear. And regular users prone to the odd typo would appreciate it too. But it could have serious consequences when it comes to the public holding people to account.
And, finally, Musk has vowed to “unlock the potential” of the platform to become the digital town square of the future. Twitter has struggled to make money from the service, which has a financial model mostly built on ads. Musk has previously suggested allowing users to pay not to see ads instead.
While Twitter’s board has accepted Musk’s proposal, and the deal is expected to close this year, it’s not a sure thing just yet. Shareholders still need to vote to accept the proposal, and it will be subject to regulators in the United States and around the world. Meanwhile, Twitter users have a lot to talk about in terms of what the future of the service may hold under Musk.
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