THE MADNESS OF MUSK

Elon Musk (and his consortium of much smaller investors) now owns Twitter. We need to take seriously the possibility that this will end up being one of the funniest things that’s ever happened.

That’s because as of this moment, it looks like Musk dug a big hole in the forest, carefully filled it with punji sticks and crocodiles, and then jumped in.

This was made immediately clear by Musk’s “Dear Twitter Advertisers” tweet as the deal closed:

The statement starts off, promisingly, with a blatant lie: “The reason I acquired Twitter is because it is important for the future of civilization to have a common digital town square.” Musk apparently believes that no one will remember that until three weeks ago, he was desperately trying not to buy Twitter. The only reason he did is because he was about to lose Twitter’s lawsuit to force him to buy it. This may be the greatest “you can’t fire me because I quit” moment in history.

The significance of the rest of his statement is more subtle. To understand it, you have to start with the basics.

Twitter currently makes 90 percent of its revenue from advertising. (The rest is largely from data licensing.) This means that you, the Twitter user, are not Twitter’s customers. You are its product. Its customers are corporate advertisers and, as every businessperson knows, the customer is always right. Grocery stores care about the people shopping for Cheetos, not about the feelings of the Cheetos themselves.

Twitter’s content moderation has sometimes been heavy-handed — especially when it froze my account because David Duke got mad at me. But this is not because Twitter is run by a woke mob. It’s because Twitter needs to keep advertisers happy — and their top priority is a certain kind of environment for their ads.

This can take specific forms. Delta probably has it written into its contract that its ads won’t run near any tweets about plane crashes. But more generally, advertisers don’t want anything controversial that gets people out of the buying mood, or worse, mad at the brands themselves. Proctor & Gamble can’t allow its ads for Charmin, targeted at the Upscale Panera Mom micro-demographic, to appear below frothing diatribes about annihilating all Muslims.

Twitter is also, speaking just in financial terms, a crummy business. It’s only been profitable for two years of its existence, 2018 and 2019. In 2020 it lost over $1 billion, rebounding to lose a mere $222 million in 2021.

To make matters worse, Musk’s deal to buy Twitter involved taking out $12.5 billion in loans. This means that Twitter will have to come up with an additional $1 billion a year to service this debt.

Thus if Twitter simply continues on its current path, it will lose huge amounts of money indefinitely. But if advertisers get nervous about Musk’s management and flee the platform, it could see losses every year in the multiple billions of dollars.

It’s true that Musk has said, “I don’t care about the economics at all.” But even as the richest man on earth, he has to care about them. He has a current estimated net worth of $220 billion, but that’s not $220 billion in cash sitting in a bank vault — it’s mostly tied up in his stakes in Tesla and SpaceX.

Thus to cover big Twitter losses, he would have to sell off more of his stock every year. This would be painful in monetary terms but more so in terms of power: Eventually he would get into a situation in which he could lose control of the companies, Tesla in particular. Moreover, Tesla is publicly traded, and while it’s fallen 45 percent since its high a year ago, it remains way overvalued by normal metrics. Right now its price-earnings ratio is 70. The historical average for the S&P 500 is about 15. The price-earnings ratio for both Ford and GM right now is 6.

This is why Musk hit the ground running with a groveling attempt to propitiate advertisers. He absolutely must keep them happy. As he put it, “Twitter aspires to be the most respected advertising platform in the world that strengthens your brand and grows your enterprise.”

And that’s where the hilarity begins. Musk has engaged in endless paeans to the glory of free speech and the need to end Twitter’s invidious censorship. This clearly isn’t a subject he’s thought deeply about, since he said back in May that Twitter should delete “tweets that are wrong and bad.” Still, his vague pronouncements have given him a legion of right-wing acolytes who feel they’ve been ill-treated by Twitter.

But they are not Musk’s constituency now. Advertisers are. Even if Musk had some genuine commitment to free speech (which he absolutely does not), it would be essentially impossible for him not to continue significant content moderation.

That’s why, after a brief nod to his wish for Twitter to be a place “where a wide range of beliefs can be debated in a healthy manner,” he quickly pivoted to telling advertisers that “Twitter obviously cannot be a free-for-all hellscape, where anything can be said with no consequences! In addition to adhering to the laws of the land, our platform must be warm and welcoming to all.”

This could have been the mission statement of pre-Musk Twitter. But now there’s one big difference: When the content moderation of Twitter remains largely the same, the sense of betrayal among Musk’s super-fans will explode with the force of a supernova. And they will scream at Musk about it nonstop — on Twitter.

Another mogul might have the fortitude to ignore this. But Musk does not, judging by past performance. You can also judge this by current performance: On his first full day on the job, Musk is personally “digging in” to the complaints of Catturd ™.

And while Musk has announced a new “content moderation council with widely diverse viewpoints,” he will feel constantly compelled to either explain why he’s standing by his underlings’ moderation decisions, or reverse them. Then he will inevitably be drawn into personally making more and more content calls, perhaps giving the thumbs up or thumbs down to individual tweets.

It will be hell on earth for him. No matter what decisions he makes, he will infuriate large swaths of Twitter. The left will see its suspicions about him confirmed. The right will see him as a horrendous sellout, just another lying Big Tech swine. Joe Rogan will shake his head sadly about what happened to Elon. Eventually what used to give Musk the greatest pleasure, opening up Twitter on his phone, will be a source of excruciating pain.

And that’s just the beginning. Musk has important business interests around the world, and the potential riptides are endless. What happens when Kim Kardashian starts tweeting about how Taiwan is an independent country? Will the government of China quietly suggest to Musk that he do something about this, or will they make things hard for Tesla’s Shanghai plant and block the import of Teslas? What do other Tesla shareholders do if he defies China, and they find out his little bird app adventure is losing them money? What happens when a SpaceX rocket explodes, but Musk has been too busy adjudicating which Nazi furries are going to be suspended for a month?

This future is obviously not foreordained. Possibly Musk will do what no human has ever been able to do before and invent 1) content moderation that everyone likes at an enormous scale, and 2) a way to make huge amounts of money off Twitter. Maybe Tesla will become so profitable that he can use it to subsidize Twitter until 2090. But the most likely outcome is that he’s just asked the monkey’s paw to grant him his greatest wish. Now look as the paw crooks its gnarled finger, and Musk’s love for Twitter ends up obliterating the Twitter experience for one specific user: Elon Musk.

Welcome to hell, Elon

You break it, you buy it.

Twitter is a disaster clown car company that is successful despite itself, and there is no possible way to grow users and revenue without making a series of enormous compromises that will ultimately destroy your reputation and possibly cause grievous damage to your other companies.

I say this with utter confidence because the problems with Twitter are not engineering problems. They are political problems. Twitter, the company, makes very little interesting technology; the tech stack is not the valuable asset. The asset is the user base: hopelessly addicted politicians, reporters, celebrities, and other people who should know better but keep posting anyway. You! You, Elon Musk, are addicted to Twitter. You’re the asset. You just bought yourself for $44 billion dollars.

The problem when the asset is people is that people are intensely complicated, and trying to regulate how people behave is historically a miserable experience, especially when that authority is vested in a single powerful individual.

What I mean is that you are now the King of Twitter, and people think that you, personally, are responsible for everything that happens on Twitter now. It also turns out that absolute monarchs usually get murdered when shit goes sideways.

Here are some examples: you can write as many polite letters to advertisers as you want, but you cannot reasonably expect to collect any meaningful advertising revenue if you do not promise those advertisers “brand safety.” That means you have to ban racism, sexism, transphobia, and all kinds of other speech that is totally legal in the United States but reveals people to be total assholes. So you can make all the promises about “free speech” you want, but the dull reality is that you still have to ban a bunch of legal speech if you want to make money. And when you start doing that, your creepy new right-wing fanboys are going to viciously turn on you, just like they turn on every other social network that realizes the same essential truth.

Actually, there’s a step before trying to get the ad money: it turns out that most people do not want to participate in horrible unmoderated internet spaces full of shitty racists and not-all-men fedora bullies. (This is why Twitter is so small compared to its peers!) What most people want from social media is to have nice experiences and to feel validated all the time. They want to live at Disney World. So if you want more people to join Twitter and actually post tweets, you have to make the experience much, much more pleasant. Which means: moderating more aggressively! Again, every “alternative” social network has learned this lesson the hard way. Like, over and over and over again.

Also, everyone crying about “free speech” conveniently ignores that the biggest threat to free speech in America is the fucking government, which seems completely bored of the First Amendment. They’re out here banning books, Elon! President Joe Biden and former President Donald Trump have identical policy positions on Section 230: they both want to repeal it. Do you know why? Because the First Amendment prohibits them from making explicit speech regulations, so they keep threatening to repeal the law that allows social networks to even exist in order to exert indirect pressure on content policy. It’s not subtle!

State governments are even less subtle: both Texas and Florida have passed speech regulations that overtly tell social media companies how to moderate, in open hostility to the First Amendment. Figuring out how to comply with these laws is not an engineering problem (not least because compliance might be impossible). It is a legal problem because these laws are blatantly unconstitutional, and the only appropriate response to them is to tell the government to shut up and go away. (A big problem here is that the courts are pretty stupid about the internet!) A challenge to these laws, partially funded by Twitter, is headed to the Supreme Court, which is the polar opposite of a predictable system: it is a group of uncool weirdos with lifetime appointments that can radically reshape American life however it wants.

You can’t deploy AI at this problem: you have to go out and defend the actual First Amendment against the bad laws in Texas and Florida, whose taxes you like and whose governors you seem pretty fond of. Are you ready for what that looks like? Are you ready to sit before Congress and politely decline to engage in their content capture sessions for hours on end? Are you ready to do any of this without the incredibly respected policy experts whose leader you first harassed and then fired? This is what you signed up for. It’s way more boring than rockets, cars, and rockets with cars on them.

Elon Musk bought Twitter. Here’s how it happened.

And it gets worse the second you leave the United States! Germany is a huge market for Tesla. Are you going to flout Germany’s speech laws? I would bet not. The Indian government basically demands social media companies provide potential hostages in order to operate in that country; you can’t engineer your way out of that shit. Are you ready to experience the pressure Twitter faces in the Middle East to block and restrict accounts? Are you ready for the fact that the Iranian government will fucking murder people over their social media posts? (Are you ready for how Twitter is being used by Iranians protesting that government right now?) Are you excited for the Chinese government to find ways to threaten Tesla’s huge business in that country over content that appears on Twitter? Because it’s going to happen.

The essential truth of every social network is that the product is content moderation, and everyone hates the people who decide how content moderation works. Content moderation is what Twitter makes — it is the thing that defines the user experience. It’s what YouTube makes, it’s what Instagram makes, it’s what TikTok makes. They all try to incentivize good stuff, disincentivize bad stuff, and delete the really bad stuff. Do you know why YouTube videos are all eight to 10 minutes long? Because that’s how long a video has to be to qualify for a second ad slot in the middle. That’s content moderation, baby — YouTube wants a certain kind of video, and it created incentives to get it. That’s the business you’re in now. The longer you fight it or pretend that you can sell something else, the more Twitter will drag you into the deepest possible muck of defending indefensible speech. And if you turn on a dime and accept that growth requires aggressive content moderation and pushing back against government speech regulations around the country and world, well, we’ll see how your fans react to that.

Anyhow, welcome to hell. This was your idea.