Elon Musk’s takeover of Twitter: 5 latest developments

But now the fun and games are over, and it’s time for Elon Musk to prove he can turn the tide of the company amid mounting pressure from creditors and advertisers alike. As part of that effort, Musk has announced a series of sweeping changes to the platform, including charging $8 for the coveted blue tick.

Here’s everything you need to know about what’s happened since Elon Musk took over Twitter and what he plans to do with the platform.

Massive layoffs and resulting lawsuits

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

Later on Friday, November 4, the Musk-led social media company laid off about half of its 7,500 employees. The company’s employees were first notified of the layoffs by email the day before. The massive layoffs have not only sparked fears about the platform’s ability to deal with misinformation ahead of the crucial US midterm elections, but also sparked a class action lawsuit by employees claiming the company violated various labor laws by firing the employees it hired became.

Dorsey’s answer

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

Charge $8 for a tick

In an update for Apple iOS devices, Twitter announced that users can get the blue tick by signing up for the $7.99-per-month Twitter Blue service, “just like the celebrities, businesses, and politicians” on the Platform.

Before the Musk acquisition, a blue tick next to an account’s name meant that Twitter had verified it belonged to the person or organization claiming it. The social media company has yet to clarify how it plans to verify users’ identities after they’ve been charged a fee and before giving them a blue tick.

Aside from the blue tick, users also get “half the ads and a lot better” by subscribing to the service, according to Twitter. “Because you’re helping Twitter fight bots, we’ll reward you with half the ads and make them twice as relevant,” the company said in the update notification.

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

Monetization of text and long-form content

With a growing number of advertisers 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 also help them monetize their content.

With a growing number of advertisers 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 also help them monetize their content.

But back in June of this year, prior to Musk’s acquisition, Twitter had announced “Twitter Notes,” a feature that allows users to write long text on the platform. Tested in specific regions, the feature allowed users to create long-form blogs or articles and post them in a tweet. When a Twitter user asked Musk if he was planning something similar, he replied, “Something like that.”

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

Musk, on the other hand, seemed interested in a monetization model similar to that of Google-owned video streaming giant YouTube. “We can now do 42 minute blocks at 1080 resolution for New Blue so you could split a longer video. The 42-minute limit is due to be set next month. How does YouTube monetization work and what could Twitter do better?” Musk asked a user who suggested YouTube-like monetization.

But there are many ways content creators can make money on YouTube, including ad revenue sharing, channel memberships, “super thank yous,” etc. While Musk hasn’t made it clear exactly how he intends to proceed with monetizing the platform, he has indicated to share advertising revenue.

One user pointed out that YouTube gives content creators 55 percent of the advertising revenue generated by their content. Musk claimed that Twitter could “beat that” in a reply. Musk has also hinted that Twitter Notes, or whatever the platform wants to call it, could be expanded as a rival for Substack, the paid newsletter service.

Musk has also hinted that Twitter Notes, or whatever the platform wants to call it, could be expanded as a rival for Substack, the paid newsletter service. Interesting, 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.

That New York Times reports that Musk is also considering allowing paywall videos, where users have to pay a certain amount to watch a video. He’s also spoken about the revival of Vine, a TikTok predecessor that Twitter acquired in the past before the company shut it down.

Cost reduction and financial pressure

Corresponding Bloombergthe layoffs are part of a much broader effort to cut costs at a company Musk has admitted he overpaid for. NYT reports that he owed the company over $13 billion to acquire it, which means it has to pay $1 billion annually in interest alone. Meanwhile, the company had less than $1 billion in cash flow. Basically, it made less money over the past year than it now owes lenders annually.

The eagerness to monetize content and attract more paying users can also be attributed to these financial pressures. Musk is also reportedly working to minimize the company’s infrastructure costs. People familiar with the matter told NYT that Musk’s advisors have suggested saving between $1 million and $3 million per day in infrastructure costs.

While Twitter was already eyeing many of the changes Musk announced, it will be interesting to see how the PayPal billionaire plans to take the social media platform in a new direction. Only time will tell if it will be as successful as its acquisition of Tesla or like many other ambitious acquisitions in the past have failed.



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