Today, Explained - Twitter’s new Musk

Episode Date: April 28, 2022

Elon Musk and Twitter have reached a deal. Recode’s Peter Kafka and Shirin Ghaffary explain what it means for the business of Twitter, and for free speech on the platform. This episode was produced by Miles Bryan and Hady Mawajdeh, engineered by Efim Shapiro, fact-checked by Laura Bullard, and hosted by Sean Rameswaram, who also edited. Transcript at vox.com/todayexplained Support Today, Explained by making a financial contribution to Vox! bit.ly/givepodcasts Learn more about your ad choices. Visit podcastchoices.com/adchoices

Previously on Today Explained. So I think that there's like a certain amount of chaos that has now been injected into an already chaotic system, courtesy of Elon Musk. And one of the things that I think is really interesting is that this could play out in a variety of ways, including, you know, some way that I haven't foreseen. Ahead on today's show We know Elon Musk wants to own Twitter And that'll happen in the next six months or so Barring unforeseen Musk-like circumstances We know he says he's buying it Because he wants to protect free speech

And he would like less content moderation on Twitter Having a public platform that is maximally trusted And broadly inclusive is extremely important to the future of civilization. Get groceries delivered across the GTA from Real Canadian Superstore with PC Express. Shop online for super prices and super savings. Try it today and get up to $75 in PC Optimum Points. Visit superstore.ca to get started. Today, today explain. Peter Kafka, host of the Recode Media podcast.

A lot of people are threatening to delete their Twitter accounts right now because the richest man in the world bought the site. Are you deleting your Twitter account, Peter? No, dude, I'm a Twitter addict. And I don't think any of the people who are complaining about Elon Musk are going to quit either. I think two of them will quit. Remember the Joe Rogan Spotify imbroglio? I remember it.

An old man named Neil Young got very mad at Joe Rogan, Spotify, Embrolio. I remember it. An old man named Neil Young got very mad at Joe Rogan and the company that distributes his podcast, Spotify, which subsequently lost something like a couple billion dollars of its market value. I just talked to Spotify because they put out their Q1 numbers. They said they saw no effect in subscriber numbers one way or the other from that fight. So sometimes people say things on the internet and or Twitter that don't turn out to be true. I guess the, you know, $45, $64 billion question here is, is Twitter going to be a

dramatically different place now? Do we have the answer? No, we don't have the answer. Elon Musk delights in us not knowing. I think he probably delights in himself not fully knowing what he's going to do. We know Elon Musk wants to own Twitter, and that'll happen in the next six months or so, barring unforeseen Musk-like circumstances. We know he says he's buying it because he wants to protect free speech, and he would like less content moderation on Twitter. Having a public platform that is maximally trusted and broadly inclusive is extremely important to the future of civilization. And then there's some other stuff like he'd like an edit button and he'd like less spam. These are the kind of things you say if you spend a

lot of time hanging out on Twitter and have specific product ideas as opposed to buying the company. But we don't really know, and I suspect he does not know either. I think he bought this thing more or less on a whim, if you can do that with a $44 billion purchase. How was Twitter run before Elon Musk? Oh, I'm going to butcher the Mark Zuckerberg quote, but I think it's a bunch of clowns drove their car into a gold mine. And that was early Twitter, but that's been pretty consistent. It has had a series of CEOs come in and out of the company, series of product executives and other folks come in and out of the company. The perennial thing about Twitter is that lots of people, people like you and me, are fascinated by it and glued to it. It has never been a very good business. That's maybe

the most consistent thing you can say about it. And in recent years, it has been staffed by a lot of people who take the premise of Twitter seriously. They want Twitter to be an important platform for the world, but also a safe platform. They take the idea of making Twitter less of a cesspool, less of a hell site, as Twitter users usually describe Twitter. This morning, Twitter promising new changes after a massive online boycott.

CEO and co-founder Jack Dorsey saying, there'll be new rules around unwanted sexual advances, non-consensual nudity, hate symbols, violent groups and tweets that glorify violence. I think that is some of what Elon Musk wants to undo is this time and energy they've spent trying to moderate Twitter and make it less toxic and make it more thoughtful. I think he thinks that effort has gone too far. And organizational structure wise, there was a board of directors and a CEO before, and now there's just going to be what, Elon Musk at the top of this pyramid? Elon Musk will own it. It's his thing. He probably will have other investors come along with him. We don't know. Some banks are lending him money, but it's his. He's bought it. We don't know who he intends to

have run the thing day to day, if he will do that, like he runs Tesla and SpaceX to his other big companies, or whether he's going to bring in someone to sort of run the thing day to day. I would assume he'll do that because it would seem wild for him to try to run three companies day to day, but he's Elon Musk. So maybe that's the kind of thing he'll want to do. So he's paid $44 billion. You say there's banks involved. Does that mean there is some sort of urgency to make this company consistently profitable? You know, he has made a point. He did this public interview during the takeover process because that's something Elon Musk would do and no one else would do. I don't care about the economics at all. Which sounds like a great idea. If you're the world's richest man, you can buy Twitter and

not be concerned by money. But the truth is, even the world's richest man has to be concerned about a $44 billion investment. He needs Twitter to at least be as profitable as it is right now. It's not very profitable, but it does turn a profit. He can't afford for it to become less valuable than it is already, because at some point, he will want to either take it public again, find someone else to sell it to. At a bare minimum, he needs it to throw off profits just to help cover some of the interest on the debt he's taking on to buy this thing. So he cannot run the business into the ground. Even though it is now his private play thing, he still has to sort of make it operate like a business.

And I think that is one of the things that is fundamentally in the end going to restrain what he does with it. There's a lot of like, what is he going to do with Twitter? Is he going to blow it up? Is he going to fundamentally remake it? You know, I think even though he might intend to do that once he gets into it and says, I don't know that there's a better way to run it more or less than the way it's running now, which is it's a free service and it's supported by ads. Maybe there's some stuff you can throw on one way or the other, but it needs to run like a business that makes money.

What do you think he might do to make it more profitable? What are the what's on the table? I think the most obvious thing is he'll do right away is cut the staff. That's the standard mergers and acquisitions playbook. You take a company from somebody and you say, this would work better if there were less people here, and you fire a bunch of them. And there's sort of a new conventional wisdom that'll happen. If you look at the tweets from fellow travelers like Mark Andreessen, another Silicon Valley billionaire who's very interested in free speech and seems to have a lot of interest in Elon Musk

behind Twitter, he suggested that... The good big companies are overstaffed by 2x. The bad big companies are overstaffed by 4x or more. In terms of generating more revenue, I've got no idea. And I don't think he does either. Twitter for years has been trying to make itself a more advertising-friendly business. They have advertising revenue. They did about $5 billion of it last year. It's just compared to a Google or a Facebook. It's just a

non-entity. It's way too tiny to generate much more interest. Are there other products and services that Twitter could sell? Twitter recently has been experimenting with consumer subscription services. There's something called Twitter Blue. They're selling for like three or $5 a month. It's a service for Twitter super users. I'm a huge user of Twitter. It's my most used social media app. And the one thing we wanted to see was an edit tweet button.

That's what we're looking for in Twitter Blue. We didn't expect we have to be paying for such a service, but Twitter didn't even give us that. For $4, you can basically get a cup of coffee at Starbucks. Is it worth a cup of coffee for some premium features? Maybe. Maybe for you. Not for me. I talked to a former Twitter executive the other day who said, maybe they'll throw in like a pay to tweet plan,

where if you're a power user like Elon and you get tons of value out of Twitter, but don't pay anything for it, maybe you should have to pay. But this is all theory. We know that the most likely thing he'll do is try to cut costs, how he'll try to generate additional revenue. We're just guessing. There's been a lot of talk this week and last week about Twitter being the public square.

Elon Musk himself has said it. Former Twitter CEO Jack Dorsey said Twitter, quote, wants to be a public good this week when he sort of endorsed Elon Musk's purchase of Twitter. And a lot of people seem to be upset that the richest man in the world can buy this so-called public square. Doesn't seem so public, does it? Is there any question as to the legality of this transaction? No. Some of the flags that you would normally get to throw with a deal like this, oh, there'll be an antitrust issue. There's no antitrust issue here. He's not consolidating social networks. He's just a guy who wants to buy Twitter. It's a publicly created company.

He made an offer. The owners of Twitter hemmed and hawed for a little bit, tried to find another buyer who would offer them more. And he's the only one out there. And if he's the only one out there, you kind of got to take the offer. Is this just a reminder for people that Twitter isn't a public square? It's a public company. Yes, it's a public company, which means it's actually fundamentally in the end, it has to answer to its shareholders.

I've heard people floating in the past the idea of, you know, making Twitter an actual sort of public entity, you know, making it, putting it in a private trust or something where you'd say, look, we're no longer trying to operate this as a business. We think this should effectively be, you know, run as a nonprofit. There's a bunch of reasons why that hasn't happened, but it's not like people haven't floated that idea. But it is a for-profit public company, and this is one of the things that can happen. Especially, by the way, Twitter basically made this more feasible when it went public. That is one of the reasons why Elon Musk could come in and buy this thing. Which is to say it's not a public company anymore. It won't be in about six months.

So in about six months, we may see more ads, we may see less, we may see another subscription model. He might get rid of that. But one thing we can be positive of is there will be less content moderation on this platform. Yeah, he's been as clear as we can be positive of is there will be less content moderation on this platform. Yeah, he's been as clear as he can be about that one, that he thinks there should be more speech, not less. And basically that these layers of moderation, these policies, these teams that Twitter has last however many years, he wants to strip a lot of that out. That's Peter Kafka from Recode. We've got to take a break.

When we're back, we're going to talk to one of Peter's colleagues about free speech on Twitter.com. I'm Sean Ramos for him. It's Today Explained. Support for Today Explained comes from Aura. Thank you. unlimited photos and videos directly from your phone to the frame. When you give an AuraFrame as a gift, you can personalize it, you can preload it with a thoughtful message, maybe your favorite photos. Our colleague Andrew tried an AuraFrame for himself. So setup was super simple. In my case, we were celebrating my grandmother's birthday and she's very fortunate. She's got 10 grandkids. And so we wanted to surprise her with the Aura Frame. And because she's a little bit older, it was just easier for us to source all the images together and have them uploaded to the frame itself. And because we're all connected over text message, it was just so easy to send a link to everybody.

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a sportsbook worth a slam dunk and authorized gaming partner of the NBA. BetMGM.com for terms and conditions. Must be 19 years of age or older to wager. Ontario only. Please play responsibly. If you have any questions or concerns about your gambling or someone close to you, please contact Connex Ontario at 1-866-531-2600 to speak to an advisor free of charge. BetMGM operates pursuant to an operating agreement with iGaming Ontario. I don't care about the economics at all. Shereen Ghaffari, you're a senior correspondent here at Recode at Vox. What exactly does Elon Musk want to do with content moderation on Twitter?

Well, he doesn't want to do much of it. He says he's a free speech absolutist. It's damn annoying when someone you don't like says something you don't like. That is a sign of a healthy, functioning, free speech situation. And how does that compare to Twitter's current content moderation? It's a pretty drastic departure, at least ideologically. Twitter over the years has increased the amount of rules that it places against things like hate speech, harassment, medical misinformation. Twitter says it wants to delete Internet hatred, but admits it can't eliminate hate speech altogether.

The company is now training staff to ferret out abusers, and it's giving users a mute button to simply turn off tweets from abusive users. So if you are out there saying hateful things to someone, using racial slurs against someone, that might not be against the law, right? But it could be considered hate speech by Twitter standards. And they would have the right to give you a warning or to even potentially ban you if you keep taking those kinds of actions. And Elon Musk, while he isn't saying he's pro hateful speech, is kind of saying those kinds of things should be allowed. Well, I think it's very important for there to be an inclusive arena for free speech. I mean, he hasn't given the details on exactly how he's going to execute yet, but under what he said so far, yeah. How has that content moderation on Twitter been received by people on the left, by people in the middle, by people on the right?

Many kind of prominent Democrats have been pushing for more content moderation, right? Because they think that sort of these bullying or harmful voices can drown out more vulnerable populations. But you're also seeing a lot of people on the right, and I would say in the middle and even parts of the left, arguing that this is too heavy-handed, that these companies should not be saying what is hate speech, what is not to the extent that they are, and accusing a company like Twitter of political bias in executing this. Mr. Dorsey, who the hell elected you and put you in charge of what the media are allowed to report and what the American people are allowed to hear? And why do you persist in behaving as a Democratic super PAC, silencing views to the contrary of your political beliefs? Which there's not really systematic proof of, but, you know, every side always thinks that

the leaders in charge are biased against them. Of course, Twitter's most famous instance of content moderation was kicking the former president off of the platform. Do we know if Elon Musk plans to bring him back? He hasn't said one way or another, but it seems like a definite possibility. I would say it's in line with what his stated values are. And he's been sort of egging on the right. And, you know, yesterday he tweeted something about how Truth Social, which is Trump's new social media app, is higher on the app charts than Twitter. These are kind of comments that are embraced by the right. And you're seeing people like Tucker Carlson and other prominent conservative figures really seeing Elon as like

their new hero or champion who they're hoping will bring back Trump and will make Twitter a freer place for conservatives. Well, obviously, this is a victory for free speech. So I would hope that this is going to reverberate and maybe some of the other high tech companies who've been engaging in censorship and shadow banning and other things are going to follow suit and say, hey, maybe people are serious about this free speech thing. That's interesting. Have we seen people on the right returning to Twitter or maybe signing up for the first time and conversely, people on the left potentially leaving Twitter, canceling their accounts, deactivating?

Yeah, there's some interesting data coming out. I saw some from a social media tracker called Social Blade, and it showed that many prominent left-leaning users, people like Michelle Obama, Bernie Sanders, and AOC, that they have lost tens of thousands of followers since Monday when it was official that Elon is likely going to be the new owner of Twitter. And that a number of conservatives like Senator Ted Cruz and Rep. Marjorie Taylor Greene, that they've seen their follower accounts actually tick upward. So they're seeing a gain by tens of thousands of followers. So what that could indicate

is that, you know, people, some people on the left, some of these people supporting Obama and AOC, that they're checking out and people on the right are either returning or making new accounts. 72% of Republican accounts

gained followers between Monday and Tuesday morning. Now get this, because almost all Democratic lawmakers lost followers during that same time period. How is this all playing out within Twitter? It seemed like, you know, it was just a few weeks ago where Twitter's CEO said there will be distractions ahead. And here we are. And Elon Musk now owns the company for all intents and purposes. I have to say this has been one of the most kind of unexpected and wild business stories that I think I've ever covered. I don't think most Twitter employees

saw this coming at all. My name is Jackson Mulholland. I'm one of the many people here working at Twitter in charge of developing terms and conditions for users. We're not stripping away free speech. We're protecting users from bullies, bigots, and spam. I refuse to work for or with Elon Musk. I'm resigning. I'm hearing that many are kind of in a state of shock. Even a few weeks ago, I would say,

many were thinking that this is just Elon being Elon who knows if the deal will actually happen. And here we are, and this is real. And keep in mind, the CEO is pretty new. He started just, you know, several months ago. So he sort of didn't even have a chance to really start his tenure. And, you know, I would say the reactions

in terms of our Twitter employees pro or anti-Elon being the new owner are mixed. Most people I've talked to are worried. But, you know, especially those people who are working on those teams like content moderation or policy who have come up with these really thoughtful ways to categorize if something is hate speech or not. They feel worried that, you know, sort of all that work is going to come undone to make Twitter like a safer, healthier place. That being said, I think there are also some employees we know from reports or also other employees who are excited for Musk. They think that Twitter has not been making as much money as it could.

It's not growing as quickly as it could compared to the other bigger social media giants. And they think that Musk may provide a fresh change. Is any of this playing out in the public eye or is it all behind the scenes? Oh, this is definitely spilled over. So it's been quite dramatic in that Twitter's top lawyer, someone named Majaya Gade, she has been instrumental in sort of leading

all these teams at Twitter that work on content moderation. And she is the person who sort of oversaw the decision to ban Trump. Obviously, she's been in the public eye for a while because of this, but she's leadership and has questioned her decision-making about a time when Twitter blocked an article by the New York Post with hacked materials from Hunter Biden. And basically, Musk is publicly kind of dragging the very person who he negotiated with to buy this company and who is a respected leader within Twitter, although a controversial one

on the right. But what that's essentially done is sort of made what would otherwise kind of be behind the scenes, corporate tension, very, very public and true Elon fashion, putting it all out there and, you know, directing a lot of anger on both sides, I think. What do we know about how Elon has run his other companies, SpaceX, Tesla, and how might that suggest he runs Twitter? Elon says he's all for free speech, but in his actual track record as a leader at Tesla and SpaceX, he hasn't always been the biggest advocate for free speech. The world's richest freeloader evidently has a very thin skin. He actually made employees at Tesla sign non-disparagement clauses so they couldn't say anything negative about the company when they left. He has even interrupted an earnings call

before, which are usually quite professional. You don't usually see CEOs come and interrupt the financial analysts when they ask questions, but that's exactly what he did one time. And so where specifically will you be in terms of capital requirements? Next. Boring bonehead questions are not cool. Next. So Elon Musk is someone who some people find it hypocritical that he's talking so much about free speech when he himself has been quite defensive and tried to shut down people who are critical of him or his companies. And what does this mean for how he might manage the public square? It's concerning to some folks. And, you know, he has said, he publicly tweeted that I want my critics to be

on Twitter because I do believe in free speech. But I think, you know, we do have a reason to doubt his commitment to that when his actions sort of seem to say otherwise. That being said, I think if Elon Musk went around and just like shut down every single person who he had a beef with, Twitter would not be a successful company, right? You sort of need people disagreeing

for Twitter to even work. So I don't think that we're going to see like drastic change overnight. And maybe we should take comfort in the fact that if Elon Musk totally blows this, we've been through many social media platforms already, and we can take comfort in the fact that there will likely always probably be another one, a next one, a cooler one, a better one. Yeah, absolutely. I mean, just think about how quickly people left MySpace to go to Facebook or how people

are now, young people are leaving Facebook and going to TikTok, right? Social media companies can and will fall. And if Twitter ultimately is not a place that a wide group of people want to participate in, then it's going to be vulnerable to competition coming and eating its cake. Shirin Ghaffari is a senior correspondent covering social media at Recode. Before that, you heard from her colleague, Peter Kafka. He writes a weekly column about media and tech, and you can find it most Wednesdays at Vox.com. He has a podcast about media and tech called Recode Media. You can find it once or

twice a week, wherever you listen. You can get in touch with us anytime via email, todayexplained at Vox.com. We're also on Twitter. Thank you, great Elon. We're also also on the radio thanks to our partnership with WNYC. Our episode today was produced by Miles Bryan and Hadi Mawagdi. I edited it. I'm Sean Ramos for him. He mixed it and mastered it. He's Afim Shapiro. She fact-checked it. She's Laura Bullard.

Happy birthday, Laura. Today Explained supervising producer is Amina Alsadi. Our editor is Matthew Collette. Our veep of audio at Vox is Liz Kelly Nelson. We use music from Breakmaster Cylinder and Noam Hassenfeld. Noelle King hosts the show with me, and the rest of the team includes Halima Shah, Victoria Chamberlain, and one last time, Will Reed.

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