Disclaimer: Opinions expressed under belong solely to the writer.
Ever since billionaire Elon Musk’s takeover of Twitter in October, an impending sense of doom has been hovering over the social media platform and its customers.
From issuing an ultimatum to his (remaining) workers to launching a paid verification function which majorly backfired on him, Musk is sending an already dying social media platform to its grave.
Earlier than Musk’s acquisition of Twitter, the social media platform incurred a web debt of US$596.50 million final 12 months, based on the Wall Avenue Journal, and was struggling to draw new customers in addition to improve its income.
The corporate had not turned a revenue for eight out of the previous 10 years.
Submit acquisition, though it’s more durable to find out the monetary well being of Twitter as Musk has privatised the social media firm, analysts have pieced collectively an evaluation from the corporate’s final regulatory filings and Musks’ public statements to seek out that the online debt Twitter has accrued snowballed to a whopping sum of US$13 billion.
As well as, the corporate, which generates over 90 per cent of its income from promoting, is seeing large advertisers comparable to WPP’s Group M and Omnicom fleeing, and pausing their spending on the social media platform as there’s a rising concern in the direction of the long run enterprise mannequin of Twitter.
There isn’t any denying that the social media platform was on its option to its grave — its monetary efficiency itself is proof of this — and Musk simply accelerated its loss of life by his reckless strikes and hasty choices.
Customers are fleeing the social media platform
Massive advertisers apart, Twitter’s customers are additionally fleeing the platform.
In accordance with MIT Know-how Assessment, the platform Bot Sentinel — which tracks inauthentic behaviour on Twitter — believes that round 877,000 accounts have been deactivated and an extra 497,000 have been suspended between Musk’s takeover of Twitter in finish October and November 1, which is greater than double the common variety of accounts.
Celebrities comparable to Gigi Hadid and Shonda Rhimes have additionally bowed out of Twitter, citing that Musk’s takeover has solely created a “cesspool of hate and bigotry”, which is true contemplating that Twitter noticed an almost 500 per cent improve in use of the racial slurs inside 12 hours of Musk’s takeover.
However what’s fascinating is that the customers who’ve stop Twitter didn’t simply lay off social media — they’ve turned to different platforms, which reported large will increase of their person bases since Musk’s takeover.
Different Twitter platforms are seeing a surge in customers
In accordance with Fox Enterprise, many of the smaller platforms which noticed a surge in customers share frequent parts, specifically the absence of advertisements and algorithms.
One such platform is Hive Social, which has garnered over two million customers since Musk’s Twitter takeover. The skyrocket of recent customers even led to the platform crashing a few occasions.
Hive Social combines ideas from Instagram, Twitter, and MySpace, together with picture and video posts, standing updates, an choice to repost content material, and even allows customers to have a personalised music part on their profiles.
Whereas the app continues to be removed from excellent and has its fair proportion of bugs, Hive Social has managed to develop its funding as properly, with greater than 800 folks investing over US$300,000 into the app by crowdfunding website WeFunder.
The extra funding that Hive Social has obtained shall be put in the direction of amping up accessibility and pushing out weekly growth updates to the app to accommodate customers’ suggestions, based on the app’s 24-year-old CEO Raluca Pop.
Apart from Hive Social, decentralised social media platform Mastodon can also be trending amongst ex-Twitter customers and companies alike.
In accordance with SensorTower, the platform noticed its downloads develop by 657 per cent within the 12 days following Musk’s possession of Twitter.
Mastodon has been round since 2016, and is powered by a community of impartial servers worldwide. The platform is just like Twitter within the sense that they’re each microblogging platforms — a person can publish posts which go right into a central feed, which may be “starred” (preferred), “boosted” (retweeted), and shared.
Alongside common customers, companies and tech giants comparable to Volkswagen AG and Google have arrange their official accounts on Mastodon as properly.
Along with the explosion in downloads of those new platforms, current social media platform comparable to Tumblr additionally noticed its adoption surge by 96 per cent within the US, and by 77 per cent worldwide.
With all these new platforms gaining traction, how precisely can Musk’s Twitter survive?
Musk’s MySpace second
I can draw parallels between the loss of life of one of many largest social media websites, MySpace and Twitter.
MySpace fell from its grace because of the platform falling into dangerous fingers within the face good rivals comparable to Fb — does this sound acquainted?
Twitter is already lagging behind different social media giants, sitting in fifteenth place by variety of customers, and has been overtaken by new entrants comparable to TikTok. Musk’s hostile administration fashion solely dug a deeper gap for the platform.
Operating Twitter like an authoritarian regime, Musk slashed the social media platform’s workforce of seven,500 by half in a determined try to scale back Twitter’s prices.
Though Twitter’s layoff will help the corporate save over US$860 million a 12 months, an approximate 15 per cent of Twitter’s US$5.57 billion in prices and bills final 12 months, this transfer may also show to be lethal to the social media platform — the corporate’s most crucial engineers, builders and entrepreneurs have left Twitter.
The mixture of those elements in addition to the rise of social media platforms rivalling Twitter can solely imply one factor: the platform is heading for its downfall.
Is chapter the one means out?
On November 10, Musk warned a couple of potential chapter in an all-hands assembly with Twitter’s workers, based on folks acquainted with the matter. This comes scorching on the heels of an inner memo to workers wherein Musk cautioned them of “dire financial challenges dealing with the corporate”.
Whereas it’s plain that Twitter is dealing with a barrage of challenges and almost certainly heading in the direction of a downfall, analysts nonetheless imagine that Musk can hunt down different choices earlier than resorting to file a chapter, based on Wall Avenue Journal.
If Musk does find yourself submitting for chapter, his US$27 billion funding will almost certainly be worn out as fairness holders would be the final to be paid out throughout an organization restructure.
As a substitute of dropping of his funding, Musk can purchase again Twitter’s debt from lenders at a steep low cost to scale back the corporate’s debt load and curiosity prices, in addition to its valuation, former credit score analyst and founding father of knowledge supplier Enersection LLC, Jeffrey Davies, informed Wall Avenue Journal.
This can find yourself being useful for the corporate in the long term.
Apart from that, based on finance professor David Kass, Twitter may additionally exchange a few of its debt with fairness and if profitable, Twitter can generate constructive free money movement in two or three years.
All of it lies on Musk’s plan of action. If the appropriate steps are taken on the proper time, possibly Twitter may be saved.
Featured Picture Credit score: Getty Photographs
