Is Elon Musk's era the end of the social media billionaires?

The platform has been taken over by Twitter's biggest tryhard, but the social media industry could face multiple crises

Twitter has been bought out for $44 billion by its least interesting troll. When Elon Musk invested in the platform, he claimed it was for the "future of civilization" and the preservation of a "common digital town square." That roughly translates to the world's richest man purchasing his favorite megaphone.

Musk is a Twitter addict with 112.1 million followers, making him the biggest attention-seeker in the attention economy. From calling a British diver a "pedo" to his perplexing stunt at Twitter HQ—showing up with a kitchen sink and uttering the punchline, "Let that sink in"—he clearly believes comedy is his calling. He reminds me of Christopher Hitchens' remark about an adversary: he "thinks he's a wit and is only half right."

Buying Twitter, according to Musk, is "not a way to make money." That is undeniably correct. For years, the company struggled to turn a profit. It generates 90% of its current revenue from advertising to only 217 million "monetizable" users (and illegally using their private data to target ads at them). However, this represents only a fraction of the monthly active users on sites such as Facebook (2.8 billion), TikTok (1.2 billion), YouTube (2 billion), and Instagram (1.4 billion).

However, Twitter has provided excellent publicity not only for Musk's colossal ego but also for his businesses. Tesla spends almost nothing on advertising, but Musk's actions generate vast amounts of free publicity.

Musk, like Donald Trump, recognizes Twitter's potential. Its prominence has never been due to business success, let alone technology. Its success, as editor Nilay Patel points out in an article on The Verge, is political. Twitter attracts a disproportionate number of addicted opinion-formers, such as journalists, politicians, writers, and celebrities—exactly the type of people Musk wants to be thinking about him.

Musk, however, has purchased $13 billion in debt in addition to his platform. Twitter was previously repaying its creditors more than $50 million per year. According to some estimates, it will now have to find more than $1 billion per year just to pay back the interest. Even if Musk isn't looking to profit, he can't afford to ignore such losses. Stopping the bleeding will now be a top priority for him, either by charging users a subscription fee for verified accounts or, more likely, by cutting costs.

Before backtracking, the notoriously capricious CEO had already stated that he would fire 75% of the workforce to help balance Twitter's books. But, having already fired four of Twitter's top executives - allegedly for "cause" in order to avoid tens of millions of dollars in compensation - he is now looking for job cuts across the board.

Staff who enforce measures to limit disinformation, spam, and abuse would be among the easy cuts for Musk. Only illegal speech, he believes, should be restricted. This alleged "free speech absolutist" stance would imply that Twitter, already a frequent alibi for repressive regimes, would march in lockstep with those regimes. More freedom of expression for trolls and racists, less freedom of expression for dissidents However, it is a throwback to the days when Twitter claimed that the best response to "bad speech" was more speech (meaning, more content to monetize).

Despite talk of a "common digital town square," Twitter has always thrived on heated debate fueled by news and entertainment. This puts the company in a difficult position. On the one hand, the system's compulsiveness stems from its relentless nastiness: the gut-punch of an insulting, racist, or stupid tweet in your feed incites the cathartic banging out of quick, angry replies. Similarly, from the Islamic State to QAnon, it has thrived on the emotional contagions that drive the viral spread of far-right disinformation. Twitter would be far more boring without them. Advertisers would also have a less captive audience.

However, it has repeatedly lost high-profile users due to trolling and misinformation. It has been forced to increase its moderation efforts and ban high-profile users such as Trump, who was estimated to bring in $2 billion per year for Twitter in 2017. Even with these efforts, it has been losing its most active and profitable users, who are probably getting tired of Twitter feuds about politics and celebrities.

Musk may believe he can rekindle the old flames, but Twitter is not alone in its struggles. User growth on Facebook in Europe and North America slowed years ago. Instagram's expansion is slowing. After skyrocketing in 2020 due to COVID-19 lockdowns, average time spent on platforms is expected to fall. As advertisers cut budgets, all social media platforms and, indeed, most tech firms, are facing difficult times. For years, Facebook CEO Mark Zuckerberg has been looking for the next profit model—witness his failed cryptocurrency venture and his struggling "metaverse" project, which has caused the parent company, Meta, to plummet in stock markets.

The social industry may be on the verge of a crisis in which growth, revenue, and long-brewing issues of political legitimacy coalesce in favor of a split. On the right side of the industry, users on the far right who don't like how industry giants handle moderation have started their own social media ecosystems. Many others, however, have long wished for an alternative to the exploitative, manipulative, and addictive systems designed to enrich billionaires such as Zuckerberg, Musk, and TikTok CEO Zhang Yiming.

The problem has not been a lack of open-source alternatives, such as Mastodon. Indeed, some Twitter users attempted to force a migration to Mastodon in response to Musk's takeover. The issue is the "network effect." The old platforms benefit users precisely because of their large user bases. To make a dent in that, more than a few thousand people would have to migrate.

But we must keep our eyes peeled. It is possible that, Musk being Musk, he will do something stupid and offensive enough to spark the crisis that finally loosens the billionaire monopolists' grip.