At the beginning of 2023, Twitter was still called Twitter. It was facing multiple challenges in the wake of an acquisition. Elon Musk had reduced the staff by more than half. Advertisers were getting antsy. And then it all got much worse.
Welcome to tech Stuff, a production from iHeartRadio. Hey there, and welcome to tech Stuff. I'm your host Jonathan Strickland. I'm an executive producer with iHeart Podcasts and how the tech are You. We are talking about some of the biggest stories in tech over the last year, and today we're looking back at a huge train wreck of a story that of how the platform formerly known as Twitter currently known as a disgrace. I'm sorry as X has navigated the year. And before I get into it, I want to give a huge shout out to the folks over at the Verge. They have a collection of stories gathered under the banner the Year Twitter Died. So seriously, I'll be hitting some highlights of what has gone on over the course of actually the last two years, because we have to do some background on this, but to really get into the muck, I recommend checking out the articles that are part of the Year Twitter Died over at the Verge. They're really good and they go into a lot more analysis and even opinion, So check those out. All right, let's set the scene, all right. Last year in twenty twenty two, folks began to notice that Elon Musk was appearing to accumulate a significant amount of Twitter stock, like around nine percent of all outstanding shares by early spring, the rumor mill was a buzz that Musk might be making a move to purchase Twitter, which is a or at the time was a publicly traded company now. At one point, Musk actually received an offer for a seat on the board of directors, and he considered taking it. However, taking that position would mean that Musk would have to agree to not buy more than fourteen point nine percent of the company stock, he would not be allowed to own any more than that, and it would also mean he would actually have to agree to be more careful about what he said publicly about Twitter. Well, neither of those things really suited Musk, and he declined the offer. Instead, Musk made an unsolicited bid for the company itself. He offered up a deal that would see shareholders receive fifty four dollars twenty cents per share. Now, at the time, Twitter stock was trading at around forty five dollars per share, so this would be a significant bump in investments. If you're an investor and you own, you know, one thousand shares in Twitter and it's going from forty five dollars to fifty four. That's great. That's like a nine thousand dollars profit from what you had already held. That's great. So Musk's offer was kind of flirting at the edge of a hostel takeover attempt, and he also announced when he had secured fun from various partners who would contribute to his purchase of this. Because while Musk is, or at times has been, the most wealthy person in the world, that wealth is tied into other assets. It's not like he has a Scrooge make Duck vault full of gold coins that he goes swimming in. Most of his money is tied up in stocks in other companies, so it's not something that he can just like take forty four billion dollars out of the bank and slap it down on the table and buy Twitter. So the board of director said they would consider the offer. They also prepared a measure to protect Twitter should Musk actually pursue a hostile takeover, in a type of protection called a poison pill. To get into that would take a little too much time, but let's just say that they were kind of hedging their bets anyway. From that point things went bonkers. The board agreed to Musk's offer, whereupon Musk appeared to suddenly develop second thoughts. By mid May, so like a month after this had really gotten started, Musk was trying to get out of the deal he had proposed, and he cited all sorts of concerns, saying that things at Twitter weren't as peachy keen as he had been led to believe, that the platform was absolutely riddled with bots, and that this had driven up Twitter's value to a level that wasn't realistic. But the problem was Musk's agreement had ceded his rights to due diligence, like he had agreed to just skip due diligence, so he was kind of stuck. It's like agreeing site unseen that you're going to buy a house and you sign a contract. Then you show up and you find out the houses in shambles, but we've already signed the contract. You gave up your rights in the agreement. Well Over the following months, Musk repeatedly made statements saying things at Twitter were really not good, the company was garbage, that he didn't want to buy it, and meanwhile the board of directors were taking legal action to force Musk to follow through on the deal. And you know their point was, Hey, you said you're going to buy this. Even if you're not gonna buy it, you're gonna owe us a billion dollars because that's what the agreement says. If you back out, you've got to pay a billion for that privilege. And you are sabotaging the company, right, you are saying all these terrible things about the company in an effort to get out of this deal. We're going to make you follow through. Ultimately, Musk did follow through on the deal, but only after it was clear there was no way for him to get out of the hole he himself had dug. Once he realized, oh no, the consequences of my own actions are inevitable, he kind of accepted it and went ahead and purchased the company. So in October twenty twenty two, Elon Musk acquired Twitter, and it didn't take long at all before he started making huge moves. He cleared house, He fired essentially the board of directors in the executive team over at Twitter. He also fired about half of Twitter's workforce right out of the gate, and made demands that led to thousands of other employees resigning because they refused to work under the circumstances that he was demanding, and Musk reigned over a significantly damaged Twitter. This kind of sets the scene for twenty twenty three. Now, even before twenty twenty three got started, Twitter was already facing a challenge when it came to revenue. The company has always struggled with revenue and profitability. Even when Twitter was going gangbusters, it wasn't really a profitable company. But according to Musk himself, Twitter was losing around four million dollars per day back in November of twenty twenty two, and advertisers were starting to show signs of caution upon Musk's acquisition of the company, And this, as it would turn out, would be a tiny preview of what was to come in twenty twenty three. So in January twenty twenty three, Twitter had around two thousand, three hundred employees. Before Musk took the company over, it had seven four hundred folks working there. So now they were down to less than half of their workforce from just a few months earlier. Meanwhile, Elon Musk had these huge dreams he wanted implemented. He wanted to transform Twitter into something that had been on his mind for years, a sort of everything app, similar to China's we Chat app, where you could communicate, you could conduct commerce, you could do all sorts of things. His version of the app had its roots way back in his early days as one of the co founders of the company that would eventually become PayPal. His version back then was to be called x, But Musk wouldn't see it come to fruition because some of the other folks at the company that would become PayPal decided that Dusk was a bit much and they muscled him out of the company. Apparently Musk had been determined to prove them wrong ever since. Anyway, Musk wanted to transform Twitter into something beyond what it already was. But that is really hard to do, even if you haven't just gone ahead and reduced your workforce by more than half. Just keeping Twitter running was a challenge, let alone building the elements that would turn it into an everything app. Perhaps this drive took too much attention and led to situations that if Musk had been a little more attentive, could have been avoided. But seeing as how Musk typically reacts poorly to pretty much every situation he's ever put in, I'm not convinced. In March twenty twenty three, Musk stated that he figured Twitter at that point was worth around twenty billion dollars. That had to be a blow, because, again, at fifty four dollars twenty cents per share, the price that Musk paid when he bought company, it brought the company up to around forty four billion, So, just like the workforce, Twitter's value was reduced by more than half since Musk's takeover. Worse yet, Fidelity gave an even more drastic estimate, valuing the company down to fourteen point four one billion, so like a third of what Musk had paid for it. Beyond the monetary value, some users were questioning the practical value of Twitter. Once upon a time, owners of Note could have their accounts verified by Twitter and they would receive a little blue check mark, and this mark alerted other users on Twitter that that account legitimately represented who or what it claimed to, whether that was a celebrity or a news organization or a politician, a government agency, what have you. But Musk changed that and in twenty twenty two he introduced a paid for check system and for eight a month, initially twenty bucks a month, but he walked that back because people freaked out about it. Anyone could get a check mark. Suddenly the verification element of check marks was out the window, and in fact, several mischief makers took the opportunity to create new accounts that impersonated famous people or brands or government agencies. They paid for the check mark so it looked like they were the verified account representing that entity, and then they started posting all sorts of stuff, including really awful stuff. This damaged Twinter's reputation, particularly among brands which weren't keen on some Yahoo on the site pretending to represent them. It was one of many questionable decisions that would lead us to where we are today. We'll talk more about some of those questionable decisions, but right now we have a decision that's not questionable, and that is to thank our sponsors. We're back. So one thing that Musk has also done repeatedly is kind of position himself as a champion of free speech. You might find that his parameters of what constitutes free speech are somewhat subjective. Hate speech seemed to increase and flourish on the platform a matter that led more than one organization to accuse Twitter of failing to prevent or mitigate the problem. Musk's response typically is to threaten lawsuits against organizations complaining about hate speech on the platform. Meanwhile, more advertisers were rethinking their relationship with Twitter, with several pausing spending on any advertising money for Twitter campaigns. The situation got bad enough that Musk was convinced he needed to find a new CEO, mostly to help bring advertisers back to the platform. Now, Musk had said his plan was only to act as interim CEO from the very beginning. He said that Susie found a suitable replacement, that person would be put in charge and he would step away. This was something that was necessary because shareholders and other companies like Tesla were becoming frustrated that Musk's attention was on this social platform instead of say, his car company, and that their investments in the car company were suffering as a result because the company wasn't really going in any good direction. So there was this pressure on Elon Musk to name a successor over at Twitter, and he did sort of. He named Linda Yakarino, a former executive with NBC Universal, who was known for having strong relationships with advertisers, which makes sense. She worked with advertisers and brands in a high profile media company, so she seemed like an ideal choice at least as far as repairing Twitter's relationship with brands and ad companies would go. But Yakarino has found herself somewhat hampered by the fact that Elon has stick on with Twitter, and by some accounts at least essentially is still running the show over there. So in other words, the common perception is that Yakarino is over there to try and smooth things out with advertisers and brands, but not to actually run the company. That would be Musk's purview. Now. I don't know if that's true. I don't know if that's a reflection of what is actually happening over at X, but it is the common perception anyway, whether she's calling the shots or not. She hasn't really been able to stop the migration of advertisers from the company. Occasionally you'll hear about one tentatively coming back, but more frequently you hear about them leaving now. Back in the spring, Musk also rebranded Twitter as X Corp. The platform was still called Twitter at this point. That would change over the summer when Twitter shed its old name and adopted X as it's new name, and it also got rid of all the Twitter branding and the logos and everything that had defined Twitter for more than a decade. This move confused a lot of people. It's generally believed that it's a bad idea to toss aside a widely recognizable brand and to start from scratch. It certainly led to everyone using the phrase X formerly known as Twitter. I still hear that, and it's been six months since the change. Anyway, There's a lot of value that's built up in a brand. I think part of the reason people say X formerly known as Twitter is that they missed the old Twitter, and it's kind of them indicating like, the thing I'm talking about now is not the same as the thing that I enjoyed using, you know, two years ago. Anyway, they decided, for whatever reason to throw all that value out, possibly because Elon Musk has some level of obsession over the brand X. The changes kept coming. In August, tweet Deck, which had started off as a third party Twitter client, and then later Twitter acquired tweet deck went from being freely available to anyone to being locked behind a paywall so only X subscribers can access the tweet deck tool. This was a huge hassle to folks who managed multiple accounts on X, myself included. I had my own account, I had tech Stuff's account, I had a few others, and it was really easy to manage from a single view in tweet deck, but putting it behind a Twitter subscription was a drag. Part of the reason it was a drag is that by this point, the Twitter or rather X check mark was no longer looked at as verification or even a social badge of honor. It was quite the opposite. Actually, people started to look at that check mark as a sign that you were kind of a stooge. At least that was the general perception among a subset of Twitter's population or X's population. In fact, some accounts that retained the check mark because they just had so many followers that musk allowed them to continue having the check mark. They would proclaim, Hey, this isn't my choice. I didn't subscribe to X. They just gave me the check mark, and I have nothing to do with it. So it became the opposite social status than what it had used to be this past summer, Musk also announced that non subscribers would have limits to the number of posts they would be able to see in a day. Now. The official story for this is that they would cut down on data scriping across the platform, though skeptics figured it was an effort to drive more subscriptions. Musk also introduced a revenue sharing plan for certain Twitter users. You again would need to be subscribed to Twitter to qualify for this. Musk also generously indicated that he would put any money his own account earned back into the pool, because obviously, Musk has the most followed account on the platform. Now, keep in mind that investigations indicated that a ton of musks followers appear to either be inactive or potentially bots. Most have fewer than a dozen posts credited to them. Many of them have no followers of their own. They appear to be passive accounts and arguably serve no value other than to inflate Musk's own follower numbers. Let's see what else. X also changed its API, its application programmer interface. It got rid of all the free options replaced it with tiers of paid service. The top tier for enterprises costs a blistering forty two thousand dollars a month. This led to several developers saying they would have to call it quits on their Twitter related apps or they would just go bankrupt trying to run them. Musk also welcomed back folks who had previously been banned on the platform, giving them a space for that free speech he values so much. Again, your mileage may vary with Musk's dedication to free speech. If you criticize Musk, you might find it's not that free anyway. These questionable decisions would include reinstating the account of Alex Jones, which was a decision that was so shocking I'm sure it convinced advertisers that had been on the fence about leaving to just pick up their bags and go. At that point. The company's financial situation, i think it's safe to say, is in shambles. Throughout the year, there were stories of the company failing or refusing to pay bills for stuff like office space, which led to evictions and lawsuits. X employees have brought legal action against the company too, saying they've been denied their guaranteed severance The National Music Publishers Association has sued X for two hundred and fifty million dollars, alleging multiple incidents of copyright infringement. The EU has launched an investigation into the company to determine if X is failing to follow EU law with regard to policing hate speech. The companies on track to post much lower recaps new numbers this year than from last year, which in turn was already a drop from the year before. Pretty Much every story coming out of X right now is negative, and I'm sure Vegas is going to start taking bets on if, or maybe even when the company will collapse. So can X make it through twenty twenty four and out the other side? I personally believe it would be much easier to achieve that if someone convinced Musk to just step back from the company entirely, But I'd be surprised if he actually does it. I don't know. The company does have a lot of staying power. I mean, it stuck around for years without making any sort of profit, but it just I don't know. The perception seems to be that X now is just a toxic environment and that it's destroying itself from within, so we'll see. I think it's pretty sad, especially for all the people who lost their jobs in the wake of Musk taking over. But who knows, maybe it will transform itself again. We'll have to see what happens in twenty twenty four. In the meantime, I hope all of you are well, and I'll talk to you again really soon. Tech Stuff is an iHeartRadio production. For more podcasts from iHeartRadio, visit the iHeartRadio app, Apple Podcasts, or wherever you listen to your favorite shows.