Musk announces more political advertising and other measures. How far will he go?
Ever since Elon Musk acquired the social media platform Twitter in October 2022, there have been frequent headlines about his perceived mismanagement and lack of vision for the company’s future. His documented missteps have included firing roughly half of the company’s 7500 employees and then failing to pay them severance, which has led to four lawsuits, as of January 6.
This may be a part of Musk’s goal to cut costs as much as possible at Twitter. Since its launch in 2006, Twitter has rarely been a profitable company. From 2012 to 2021, the company only made an annual profit twice. In 2021, it reported a $221 million net loss. For Musk, who bought the company for $44 billion dollars, the journey to making his large investment profitable is proving difficult.
Musk’s gamble on Twitter has had serious financial consequences for him. Public distrust in his ability to run Twitter has led the stock of another one of his companies, Tesla, to decrease by more than half of its previous value. The vast majority of his wealth was tied up in such stocks, causing him to lose his spot as the world’s wealthiest person.
There have been many arguable missteps in Musk’s journey to make the company more profitable. In early January, it was reported that Twitter had failed to pay over $130,000 in rent in one of their San Francisco offices. Twitter was unable to publicly respond to other journalists’ questions due to the company no longer having a media relations department, as of January 6.
In a Twitter Spaces call on December 21, Musk defended his cost-cutting measures, saying: “This company is like, basically, you’re in a plane that is headed towards the ground at high speed with the engines on fire and the controls don’t work.”
Recently, Musk has come up with a new strategy to increase Twitter’s profitability of his investment. The company tweeted on January 3 that they were “relaxing their ads policy for cause-based ads in the U.S.” They added that they intend to expand what political advertising they allowed on the platform as well.
Twitter banned political advertising in 2019 after a growing push to combat political misinformation spreading on social media. The CEO at the time, Jack Dorsey, worried about bringing the effectiveness of internet ads into the political world due to its power “to influence votes to affect the lives of millions.”
Musk has disregarded some moderation policies implemented by his predecessor. Despite Musk originally promising to only reinstate Twitter accounts banned due to their controversy and misinformation based on the rulings of a “content moderation council,” he neglected that promise when he reinstated divisive figures like Donald Trump and Andrew Tate.
Elon Musk’s goal to make Twitter profitable is, as he made clear himself, a difficult task. But in his desire to reclaim his lost fortune, he has made it clear he will suspend norms and fundamentally change the way the widely-used platform operates. It remains to be seen just how far Musk is willing to go.
