On 9 April, Elon Musk texted his brother, Kimbal, to share his vision for a new social network. The platform, like Twitter, would provide space for hosting “short text messages/links”. But, unlike Twitter, it would also allow users to send payments to one another, and it would run on a blockchain – the same shared digital ledger that underpins cryptocurrencies such as Bitcoin.
The network’s users, Musk told his brother, would have to pay “a tiny amount” to register their messages on the chain. This would “cut out the vast majority of spam and bots. There is no throat to choke, so free speech is guaranteed.” Musk believed that he had landed on a solution to what he sees as Twitter’s most significant problems: censorship, fake accounts and slow user growth.
Early the same morning, Musk, 51, had posted a tweet asking: “Is Twitter dying?” He had taken a 9 per cent stake in the company five days before and, following discussions with Twitter’s co-founder Jack Dorsey and its CEO Parag Agrawal, was considering whether to join the the company’s board. A text later in the day from Agrawal appeared to seal his fate.
“You are free to tweet “is Twitter dying?” or anything else about Twitter – but it’s my responsibility to tell you that it’s not helping me make Twitter better in the current context,” Agrawal wrote. “Next time we speak, I’d like to… provide you perspective on the level of internal distraction right now and how it’s hurting our ability to do work.” Agrawal said he hoped that an upcoming meeting with Twitter employees would “help people to get to know you, to understand why you believe in Twitter, and to trust you”. But Musk had already made up his mind. “What did you get done this week?” he shot back. “I’m not joining the board. This is a waste of time. Will make an offer to take Twitter private.”
The texts, published in legal documents last week, marked the beginning of one of the most high-profile and acrimonious takeovers in recent corporate history. After Twitter’s share price spiked and then fell over the following months, Musk revealed in July that he wanted to withdraw from the deal, alleging that the social network had sought to downplay the number of fake accounts on its platform.
But on Tuesday night (4 October), as hundreds of those private texts were released and amid the backlash to his tweets over Ukraine’s sovereignty, Bloomberg reported that Musk wanted to revive his $44bn (£39bn) offer. The prospect of a humiliating court battle, which is due to start later this month, appeared too big a risk for Musk to take. He had been expected to lose the case, which would have harmed his reputation among the retail investors who have helped make Tesla the most valuable car manufacturer in the world by market capitalisation.
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Musk has written to Twitter confirming that he will follow through on the original offer if the company drops its lawsuit. Twitter has yet to respond publicly, but Musk has already sought to secure support for his plans. He tweeted on Tuesday that, “Buying Twitter is an accelerant to creating X, the everything app.”
The messages Musk shared with his brother on 9 April may provide some insight into his plans. A platform that supports both messaging and payments sounds remarkably like China’s WeChat. As one of the world’s largest standalone apps, WeChat provides a window through which more than a billion people access the internet, connect with friends, interact with businesses and make payments.
WeChat hasn’t just proved popular with consumers. The Chinese government has supported its rise because it serves as a powerful surveillance tool. But there are several reasons why a similar service hasn’t yet taken off in the West. In the US, social networks seeking to move into heavily regulated fields such as finance have faced huge resistance. Facebook’s cryptocurrency project, Libra, unravelled amid pressure from regulators. Meanwhile its efforts to transform WhatsApp into a portal to connect consumers with businesses have slowed amid concerns about data sharing.
Musk may feel that if he can replace the infrastructure underpinning Twitter with a decentralised blockchain, he could convince regulators that the system was robust. But any effort to use the Twitter app as a shopfront for financial payments would face regulatory scrutiny that would be difficult to overcome, especially if those payments included the cryptocurrencies in which Musk himself has taken a significant stake.
Perhaps the greatest challenge he would face, however, would be from other US tech giants. Apple and Google have been locked in a battle to mediate their users’ interactions with the internet for years. While Musk has been spectacularly successful in other fields, he has little experience of this world. There is every chance he would be outmatched by the Silicon Valley firms, whose leaders are more experienced in attracting new users, lobbying for favourable laws and turning regulation to their advantage.
Of course, as with any of Musk’s pronouncements concerning Twitter, we do not yet know how serious he is about pursuing his latest venture. But as the legal battles and posturing continue, for now, the question of how to resolve abuse, the polarisation of discourse and the other challenges affecting the social network will remain unanswered, to the detriment of all who use it.
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