27 April 2022
Ben Bilsland, partner and Media and Technology senior analyst at RSM UK, gives his initial prognosis on the opportunities and challenges facing Elon Musk and his takeover of social media platform giant Twitter: ‘Elon Musk has promised to unlock the 'enormous potential' of Twitter, which has a reported 217m daily active users - 38m in the US and 179m globally. Despite these impressive figures, as a social platform it is dwarfed by its competitors, including Meta/Facebook (1.93bn) and Snapchat (299.5m).
‘The revenue per employee at Twitter is $0.677m, compared to $0.727m at Snapchat and $0.799m at Pinterest. Meta is the market leader at $1.639m per employee, but is arguably significantly more multi-faceted than its rivals.
‘The removal of Twitter’s 280 character limit may provide greater scope for advertising and access to new markets. Removing Twitter's USP could be the route to unlocking further potential for growth. Currently, Twitter does not incorporate the augmented reality functionality of its rival Snapchat, but this may be another area to expand and develop.
‘Twitter has undoubtedly become an important platform for communication, news and debate. It has significant reach and influence across its 217m daily active users. The platform far outperforms traditional news operators such as the Mail Online which has 4.1m daily active users, The Sun (3.7m) and The Guardian (3.5m)*.
‘Musk has been clear that Twitter's role as a forum for free speech is a key driver for the takeover and that he sees the platform functioning as a 'digital town square'. With over 83m followers on the platform, Musk’s social media influence is vast, therefore the power of Musk’s voice is balanced against his position as owner in the interests of free speech. He operates as a de facto marketing operation for his corporate interests such as Tesla and SpaceX with an estimated multi-billion dollar brand value.
‘Twitter will need to grapple with the EU’s Digital Services Act legislation announced on 23 April. Twitter and other social networks will need to navigate legislation which is designed to protect the safety of users from disinformation and demands greater ownership and transparency of how content is recommended. Similar legislation from the US, Canada and Singapore is expected to follow and this area will be at the top of Musk’s agenda.’