Elon has officially acquired Twitter.
1) He now owns what is arguably the most influential media company in the world
2) It benefits all his other businesses
3) He'll use it to take on ByteDance
4) This would be impossible as a public company
He wins no matter what. Here's why:
1) He now owns what is arguably the most influential media company in the world
2) It benefits all his other businesses
3) He'll use it to take on ByteDance
4) This would be impossible as a public company
He wins no matter what. Here's why:
Before jumping in, here’s the full post on @TheSplit_ if you’d rather read the longer version
thespl.it
thespl.it
A billionaire buying a media company isn’t new. Salesforce founder Marc Beinoff bought Time in 2018 and Jeff Bezos bought the Washington Post in 2013.
Twitter is Elon’s newspaper. But instead of a newspaper, it’s a social media network.
Twitter is Elon’s newspaper. But instead of a newspaper, it’s a social media network.
Elon has historically used Twitter to market his businesses. Owning it outright ensures he controls the distribution to his 112m+ followers.
In other words: Twitter is off-balance sheet marketing for Tesla, SpaceX, etc.
Automakers spend 2-3% of revenue on marketing. For Tesla, that would be $1-2 billion in 2021 (the estimated interest owed on the debt financing the Twitter buyout), and much more looking out 10+ years
Automakers spend 2-3% of revenue on marketing. For Tesla, that would be $1-2 billion in 2021 (the estimated interest owed on the debt financing the Twitter buyout), and much more looking out 10+ years
It’s naive to think Elon won't leverage this. Good luck to Ford and GM buying their own social networks!
Making editorial decisions isn’t new; every media company and social network does it.
In this case, some "editorial decisions" mean drastic changes to Twitter's core product
Making editorial decisions isn’t new; every media company and social network does it.
In this case, some "editorial decisions" mean drastic changes to Twitter's core product
Twitter has changed much in the past decade. This is its biggest opportunity.
The one thing that has changed: Twitter started showing recommended content in the timeline.
And this changed worked. “Monetizable” DAUs doubled in the next five years.
The one thing that has changed: Twitter started showing recommended content in the timeline.
And this changed worked. “Monetizable” DAUs doubled in the next five years.
Twitter's energy and culture is probably the closest to TikTok of any existing product. They’re both interest-based, not friend or follower based.
Twitter is probably the best positioned to challenge TikTok of any of the large established social networks
Twitter is probably the best positioned to challenge TikTok of any of the large established social networks
Solving ByteDance’s TikTok ownership is a strategic priority for the US. Elon’s in an interesting spot to not only challenge it, but even absorb a potential spin-out.
He's already teased bringing back Vine, which was basically TikTok before TikTok existed
He's already teased bringing back Vine, which was basically TikTok before TikTok existed
There’s a lot of reasons Vine didn’t work, but it came down to:
- Poor video creation tools
- Content discovery was difficult
- Hard to make money
Usage stagnated years before Twitter shutting it down. And TikTok picked up where Vine left off.
- Poor video creation tools
- Content discovery was difficult
- Hard to make money
Usage stagnated years before Twitter shutting it down. And TikTok picked up where Vine left off.
Elon is no stranger to new social products. He sent Clubhouse to the top of the app store when he went live in February of 2021.
And he now has the top creators in the world following what he's doing.
Getting more of them interested in what he's doing and actively using the product is probably the best path for Twitter to reach billions of users.
Getting more of them interested in what he's doing and actively using the product is probably the best path for Twitter to reach billions of users.
We can dunk on Tesla self-driving engineers reviewing Twitter’s code. But AI will play a huge role in Twitter's transformation.
First in challenging ByteDance (the only reason you'd underwrite a $44 billion buyout), second in improving its ad targeting.
First in challenging ByteDance (the only reason you'd underwrite a $44 billion buyout), second in improving its ad targeting.
Elon charging for verification is just an iteration of Twitter Blue, its premium subscription feature.
Tying back to the newspaper analogy, it’s one of the best business models of all time because it combines both a subscription and advertising.
Tying back to the newspaper analogy, it’s one of the best business models of all time because it combines both a subscription and advertising.
I'm expecting Twitter as a product to look VERY different in a decade. It will likely serve as a top of funnel for many other downstream consumer products.
With China as an example, this may include payments, meal delivery, travel, billions of $ in ecommerce transactions, etc
With China as an example, this may include payments, meal delivery, travel, billions of $ in ecommerce transactions, etc
One final thing is true: this is a massive undertaking and would be impossible as a public company. It shield’s the product from wall street’s quarterly expectations (which are daily if you actually know how it works). It lets Twitter stay under the radar (when choosing to do so)
At the end of the day, Elon win's whether or not he can actually improve Twitter’s underlying business.
Owning Twitter benefits all of Elon's other companies. And Twitter's core product will act a top of funnel to build many other consumer products on over time.
Owning Twitter benefits all of Elon's other companies. And Twitter's core product will act a top of funnel to build many other consumer products on over time.
If you liked this thread, I write @TheSplit_ 🍌 2x per week for over 12,000 founders, CEOs, and investors
Check out this full post on Twitter here, and consider subscribing if you're worried Elon bans me and want the next one in your inbox on Thursday 🫡
thespl.it
Check out this full post on Twitter here, and consider subscribing if you're worried Elon bans me and want the next one in your inbox on Thursday 🫡
thespl.it
@TheSplit_ You can keep calling me crazy for suggesting Twitter will acquire TikTok...
But Sequoia, which is one of (if not the largest?) outside shareholders of ByteDance is now also (I think?) the largest outside shareholder of Twitter.
👀👀👀
cnbctv18.com
But Sequoia, which is one of (if not the largest?) outside shareholders of ByteDance is now also (I think?) the largest outside shareholder of Twitter.
👀👀👀
cnbctv18.com
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