Elon Musk’s takeover of Twitter: 5 latest developments

But now, the fun and games are over and it is time for Elon Musk to prove that he can turn around the fortunes of the company amidst rising pressure from creditors and advertisers alike. As part of these efforts, Musk has announced a set of sweeping changes to the platform, including charging $8 for the coveted blue checkmark.

Here is everything you need to know about what has happened since Elon Musk took over at Twitter and what he said he plans to do with the platform.

Massive layoffs and resulting lawsuit

Arguably, the most consequential change that Musk has already made to Twitter is the change he made to its personnel. It began with Musk firing Twitter CEO Parag Agrawal, CFO Ned Segal and legal affairs and policy chief Vijaya Gadde immediately after he became Twitter’s new owner.

Later, on Friday, November 4, the Musk-led social media company fired roughly half of its 7,500-strong staff. The company’s employees were first informed about the layoffs via email on the previous day. Not only did the massive layoffs generate apprehension about the platform’s ability to deal with misinformation ahead of the important US midterm elections, but it has also prompted a class action lawsuit from employees who claim the company violated various labour laws by not providing advance notice to the employees who were dismissed.

Dorsey’s response

Twitter founder Jack Dorsey responded to the layoffs. “Folks at Twitter past and present are strong and resilient. They will always find a way no matter how difficult the moment. I realize many are angry with me. I own the responsibility for why everyone is in this situation: I grew the company size too quickly. I apologize for that,” said Dorsey in a tweet on Saturday.

Charging $8 for a checkmark

In an update for Apple iOS devices, Twitter announced that users can get the blue checkmark if they sign up for the $7.99 a month Twitter Blue service, “just like the celebrities, companies and politicians” on the platform.

Before Musk’s acquisition, a blue check mark next to an account’s name meant that Twitter verified that it belonged to the person or the organisation claiming it. The social media company has not yet made it clear how it plans to verify the identity of users after charging them a fee and before giving them a blue check mark.

Apart from the blue checkmark, subscribing to the service will also give users “half the ads and much better ones,” according to Twitter. “Since you’re supporting Twitter in the battle against bots, we’re going to reward you with half the ads and make them twice as relevant,” said the company in the update notification.

According to the update, Twitter Blue with verification has been rolled out to users in the United States, Canada, Australia, New Zealand, and the United Kingdom. When a user asked Musk when the service will be rolled out to India, he said it should be available in less than a month

Long-form text and content monetisation

As a growing number of advertisers are seemingly disillusioned with Musk’s takeover of the platform, the Tesla billionaire seems to have plans to allow users to write long-form content on the platform, and to also help them monetise their content.

As a growing number of advertisers are seemingly disillusioned with Musk’s takeover of the platform, the Tesla billionaire seems to have plans to allow users to write long-form content on the platform, and to also help them monetise their content.

But in June this year, before Musk’s takeover, Twitter had already announced “Twitter Notes,” a feature that will allow users to write long-form text on the platform. The feature has been tested in certain regions and allowed users to create long-form blogs or articles and publish them within a tweet. When a Twitter user asked Musk whether what he planned was something similar, he replied, “something like that.”

Twitter has also experimented with content monetisation in the past. In September 2021, the social media platform announced a new feature called Super Follows, which allowed content creators to charge followers in exchange for giving them access to subscriber-only content.

Musk, on the other hand, seemed to be interested in a monetisation model similar to Google-owned video streaming giant YouTube. “We can do 42 min chunks at 1080 resolution now for new Blue, so you could break up a longer video. The 42 min limit should be fixed next month. How does YouTube monetization work & what could Twitter do better,” asked Musk to a user who suggested YouTube-like monetisation.

But there are many ways in which content creators on YouTube can earn money, including getting a share of the advertising revenue, channel memberships, “super thanks” etc. While Musk hasn’t clarified how exactly he plans to go forward with monetisation of the platform, he has hinted at sharing ad revenues.

A user pointed out that YouTube gives content creators 55 per cent of the advertising revenue generated by their content. Musk claimed that Twitter can “beat that” in a reply. Musk has also hinted that Twitter Notes, or whatever the platform plans to call it, could be built out as a rival for substack, the paid newsletter service.

Musk has also hinted that Twitter Notes, or whatever the platform plans to call it, could be built out as a rival for substack, the paid newsletter service. Interestingly, Twitter acquired Revue, a newsletter startup, in 2021, as part of its bid to “make Twitter a better home for writers,” according to the company.

The New York Times reports that Musk is also considering allowing paywalled videos, where users will have to pay some amount to watch a video. He has also discussed reviving Vine, a TikTok predecessor that Twitter had acquired in the past before the company shut it down.

Cost-cutting and financial pressure

According to Bloomberg, the layoffs are part of a much broader effort to cut costs at a company that Musk has admitted he overpaid for. NYT reports that he saddled the company with over $13 billion in debt to acquire it, meaning it has to pay $1 billion annually in interest alone. Meanwhile, the company had less than $1 billion in cash flow. Basically, it generated less money last year than what it now owes lenders annually.

The frenzy to monetise content and get more paying users can also be attributed to this financial pressure. Musk is also reportedly working on minimising the company’s infrastructure costs. People familiar with the matter told NYT that Musk’s advisers have proposed saving between $1 million and $3 million in infrastructure costs a day.

While Twitter had already set its eyes on many of the changes that Musk announced, it will be interesting to see how the PayPal billionaire plans to give the social media platform a new direction. Only time can tell whether it will be as successful as his acquisition of Tesla, or will it fail like many other ambitious acquisitions in the past.

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