After Acquiring Twitter for $44 Billion, Elon Musk Seemingly Burning it All to the Ground

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Elon Musk completed the $44 billion Twitter takeover and is already making moves that has shaken user confidence in the platform.

Back in April, Elon Musk moved forward with an effort to buy Twitter for $44 billion. The official push subsequently caused a spike in traffic for platforms like Mastodon and Countersocial at the time. Indeed, the moment caused us to start looking into alternatives and Mastodon wound up being high on our list thanks to its decentralized nature.

However, as with all things CEO’s shouldn’t do that Musk seems all to happy to do, subsequent drama unfolded. In May, Musk started doing everything he could to get out of the deal. He decided to claim, with no real evidence, that Twitter was under-representing bots and spam accounts on the platform. The deal, regardless of Musk having buyers remorse, cleared the FTC hurdles, suggesting that the deal was moving ahead anyway.

By July, lawsuits were flying left and right, making it difficult for some reporters to keep up with it all. In fact, some mistakenly thought that Musk countersued at one point, but that turned out to be incorrect as Musk was simply making a response filing to a current case.

With all the back and forth, we’ve gone from a dumb musing by Musk to the deal all but a formality away from completion to the deal being doomed to fail to, well, the deal is complete. Late October, it became official that Twitter was bought by Musk for $44 billion. From Bloomberg at the time:

Elon Musk completed his $44 billion acquisition of Twitter Inc., according to people familiar with the matter, putting the world’s richest man in charge of the struggling social network after six months of public and legal wrangling over the deal.

Among Musk’s first moves: changing the leadership. Departures include Twitter Chief Executive Officer Parag Agrawal; Vijaya Gadde, the head of legal, policy and trust; Chief Financial Officer Ned Segal, who joined Twitter in 2017; and Sean Edgett, who has been general counsel at Twitter since 2012, according to people familiar with the matter. Edgett was escorted out of the building, said two of the people, who asked not to be identified because the information isn’t public.

Shareholders will be paid $54.20 per share, and Twitter will now operate as a private company. The completion caps a convoluted saga that began in January with the billionaire’s quiet accumulation of a major stake in the company, his growing exasperation with how it’s run and an eventual merger accord that he later spent months trying to unravel.

A video did emerge at some point of Musk carrying a bathroom sink into Twitter headquarters which was just plain weird. Still, it seemed as though it was all but certain that big changes were coming to the platform whether employees or users wanted it or not. Of course, few were expecting the changes to happen so quickly.

Barely a day later, Musk fired multiple executives – at least one who was considered highly responsible for Twitters strong free speech stance. From TehcDirt:

Last night, Elon Musk closed his on-again, off-again, on-again deal to buy Twitter, and his very first order of business was to fire a bunch of top executives. This was not necessarily unexpected. When new owners come in, they will often clean house, and the text messages revealed as part of the lawsuit while Musk was trying to get out of the deal made it clear that Musk could not stand CEO Parag Agrawal. So it seemed obvious that Agrawal would be gone immediately, but Musk also fired (at least) the other top executives who know how the company works: CFO Ned Segal, head of legal and policy Vijaya Gadde, and General Counsel Sean Edgett. That’s not a great sign for an orderly transition, as those are the executives who understood Twitter’s business the best.

First, it should be noted that of all the mainstream social media platforms out there, Twitter was by far the most permissive and the most resistant to rules that would shut down accounts. It had a significantly lighter touch on moderation than Facebook, Instagram, YouTube, Snapchat and TikTok. Some of this predated her role at the company, but once she took over legal, she continued to make sure the company was far more open to user speech than nearly every other platform (and that even includes the various MAGA platforms that pretend to be about free speech but are quick to ban critics).

On top of that, she made sure that when content moderation did happen, it was based on a set of principles and policies. You can disagree with where she came down on those policies (and I often did!) but she and others at the company worked hard to make sure that they weren’t making decisions in an arbitrary fashion, but based on a policy. Indeed, this is where the whole Hunter Biden laptop story went wrong. As we’ve written a bunch of times, links to the NY Post story were blocked because of a belief that the story violated Twitter’s “hacked materials” policy. That policy had been in place for a while before the laptop story came out, and in fact we had criticized that policy specifically because it seemed clear that it could interfere with journalism in the public interest (and that had happened when Twitter banned an account for linking to leaked law enforcement documents — i.e., info that was embarrassing to cops, who tend to be more right wing than left wing, countering the narrative that Twitter only blocks pro-right wing info). Twitter eventually changed that policy, which was the right call. But, again, it shows that the company had a policy and enforced it against content that favored different political viewpoints. Indeed, not enforcing the same policy against the NY Post would have been an example of Twitter giving more leeway to conservatives than liberals.

Gadde also spent a lot of time trying to think through ways to make the site welcoming for more users without banning or shutting down accounts. She recognized that every decision had serious tradeoffs. If you allow too much abuse, harassment, and rule breaking, then that can actually work against speech by driving it away, and causing people to stay silent (you know, what the “cancel culture” crowd claims is “self-censorship”); but there’s also value in diverse viewpoints and a wide variety of opinions. She tended to default more towards allowing more speech than less, but knew that a free-for-all on a single site did not actually lead to more overall speech (which is why the few “free-for-all” sites are not very large).

While this was seemingly a bad start, things gradually went downhill from there. Reports have surfaced over a number of different users criticizing Musk have been subjected to having their accounts disabled or being outright banned from the platform.

One of the first forms of moderation right wing “free speech” social media adopt is to try to suppress criticism of the people who own the site.

In another move, the account verification was completely reworked. Originally, verified accounts were a feature that authenticated high profile individuals. This was to prevent fake or troll accounts from cropping up and pretending to be speaking as a high profile individual when, in fact, such an account was fabricated. Sol, a necessary feature that was legitimately in response to a problem. Now, Musk has opted to start selling those blue check marks for $8 per month. From the BBC:

In an update for Apple devices, the company said the feature would be open to users in certain countries who sign up to its Twitter Blue service for $7.99 (£7) per month.

The policy change is controversial, amid concerns that the platform could be swamped with fake accounts.

The rollout of this big change has been anything but smooth. A QAnon user who is part of the core support for right wing politicians, bought a check mark, but didn’t see it crop up in his profile. He proceeded to ask Musk what the holdup was:

In response, the user was subsequently banned:

It’s definitely one of the more ironic developments in this story.

Another big change, and what ultimately tipped the scales for us to join Mastodon was the layoff of roughly half of the entire Twitter workforce. The mass layoffs was described as chaotic. From NBCNews:

Twitter was plunged into turmoil Friday after Elon Musk’s team started laying off wide swaths of the company’s workforce, infuriating employees and rattling a technology industry already grappling with an economic downturn.

The mass layoffs were documented in part on the social media platform itself, where many employees appeared to rally together in solidarity under the #OneTeam hashtag, and the blue heart and the salute emojis.

Employees commiserated in Slack channels, and some found themselves abruptly locked out of their email accounts, according to six workers who spoke to NBC News and CNBC. All requested that their names be withheld, citing fears of professional retribution or losing their severance pay.

“Elon will own a company without employees,” a source inside Twitter told CNBC.

In a post Friday evening, Musk, said there was “no choice” but to lay off employees, who he said were offered three months of severance.

There have also been questions over whether the layoffs were legal or not, raising the possibility that the company could be sued for violations of labour codes.

While the internal staff were in the process of being hollowed out, one of the big money making machines within the company was also disintegrating as well. With a spike in hate speech registering on Twitter after word that half of the staff were laid off, advertisers began to pause their advertising. From Reuters:

General Mills Inc (GIS.N) and Luxury automaker Audi of America said on Thursday they have paused advertising on Twitter, days after the social media platform was acquired by billionaire Elon Musk for $44 billion.

“We will continue to monitor this new direction and evaluate our marketing spend,” a General Mills spokesperson said.

Audi of America, the Herndon, Virginia-based U.S. unit of Audi – a Volkswagen Group (VOWG_p.DE) brand – said it would “continue to evaluate the situation.”

The moves by other corporations infuriated Musk who threatened to name and shame companies pausing advertising or leaving altogether. He claimed that it was all part of a movement of “activists”. From the BBC:

Elon Musk, the new owner of Twitter, has blamed “activist groups pressuring advertisers” for a “massive drop in revenue” as the company makes sweeping job cuts in an effort to save money.

The billionaire owner of Tesla tweeted that “activists” raising concerns about how Twitter is moderated are “trying to destroy free speech in America”.

Addressing the topic of content moderation, he said Twitter’s “strong commitment” remained “absolutely unchanged”.

Twitter alternative, Mastodon, has apparently been seeing a surge in traffic lately in response to the chaos:

For anyone wondering, Mastodon got over 70K sign-ups yesterday alone. Let’s keep the momentum going! The “public square” of the web must not belong to any one person or corporation!

Subsequently, it seems that some servers were struggling to handle the huge age additional load:

Some Mastodon servers are under very heavy load during the past few days due to the extreme spike in user numbers. Remember, no matter which server you sign-up on, you get access to the same decentralized network. You don’t have to choose the popular ones!

The momentum of additional traffic carried on for days now:

https://twitter.com/joinmastodon/status/1588168057893318657

The number of people who switched over to #Mastodon in the last week alone has surpassed 230 thousand, along with many returning to old accounts bumping the network to over 655 thousand active users, highest it’s ever been!

One such user part of this large surge was non other than University Law Professor, Michael Geist who joined Mastodon on the same day as us:

So saddened by what’s happened at Twitter over the past week. Like many, I’ve established a Mastodon account, where I’ll mirror tweets. I’m at @mgeist@mas.to

As it turns out, Freezenet joining Mastodon was a moment that was far from unique over the last few days:

https://twitter.com/mmasnick/status/1588697729865519104

The number of journalists showing up on Mastodon the past few days is astounding. I know it’s tough to start from scratch, but the learning curve really isn’t that bad once you start following a few active accounts…

https://twitter.com/mmasnick/status/1588739623148466176

Seems like it’s catching on. It’s just one datapoint, but I’ve gone from roughly 200 followers to 2.2k in just the last week, and there’s a pretty good level of discourse happening there.

No idea if it will last, but it’s more momentum than i expected.

And it’s been… friendly

#Mastodon
5,900,290 accounts
+1,938 in the last hour
+39,268 in the last day
+206,830 in the last week

So, we’ll have to see if this momentum translates into a more permanent force online or not. So far, alternatives to Twitter have been seeing a lot of activity. What is striking is seeing how so much about this was triggered by Musk completely reshaping the company over the span of about a week. Still, alternative networks are no doubt licking their chops with what they are seeing at Twitter for the time being.

Drew Wilson on Twitter: @icecube85 and Facebook.

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