It'll Be Fun to Watch Musk Dismantle Twitter's Dysfunction

For Elon Musk, conquering Twitter must feel a little like being the bulldog that finally caught up with the school bus: now what is he gonna do with it? Elon, not the pup.

Musk started out on Thursday by publicly firing Twitter’s four top executives, figuratively executing them in front of all the inmates lined up in the prison yard. That move could cost Twitter more than $140 million in severance, Forbes reports, raising the question of why this quartet, so easily expendable, commanded such a big parachute.

Next up, Musk should lift the lifetime ban that Twitter slapped on President Trump, as I said on Newsmax TV with anchors Carl Higbie and Amanda Brilhante, here. And tame an overly woke staff by moving Twitter out of San Francisco, and create a truth commission to reveal all censorship activities and related government requests, as I wrote here.

The financial stuff will be tougher. Twitter has run up bottom-line losses in 10 of the past 12 years, for a total of almost $4 billion, and it ran an operating loss of $336 million for the three months ended June 30.

At $44 billion, Musk is paying the price he set in April, and the tech-heavy Nasdaq stock index is down 17% since then; the market plunge may be the real reason why he tried to back out of the deal in July, citing fake bot accounts that inflate Twitter’s audience.

Musk must search out new sources of growth beyond advertising, the 200-year-old business model that still provides 90% of the revenue at this 21st century company. He says he wants to make Twitter the “everything app” for all kinds of electronic commerce, detailed in my Wall Street Journal column, which nonsubscribers can read here.

Elon also should look at charging rent for the world’s largest companies, institutions, government offices, foreign governments, politicians and celebrities to get access to Twitter. The Fortune 500 companies have total revenue of $16 trillion; charge them one-tenth of 1% of revenue and Twitter could add an extra $1.6 billion a year to its $5B in annual gross income.

Media companies need Twitter to reach its 240 million average monthly users worldwide. Fox News revenues top $12 billion per year, and CNN, MSNBC and The New York Times all take in $2 billion or so apiece; tax them at, say, 0.5% of their annual sales.

Another asset: Twitter as a faster, cheaper customer service platform for large U.S. companies. On a recent Sunday, a friend in Oregon had trouble trying to rent a car from Hertz, unable to open a new account because of a dead account at an old employer.

He spent 45 minutes on the phone with Hertz customer service, to no avail; a rep told him killing the old account would require IT pros to intervene, and they work only Monday to Friday. Then my pal gets on Twitter, clicks on the @Hertz account, and seconds later chats online live with a Hertz representative.

“They fixed it in 10 minutes,” he tells me. Thus, Twitter could offer a cheaper, more instant rival to Salesforce.com, which has a total market value of $160 billion as the king of CRM, customer relationship management software.

Even after the market plunge that chopped 40% off the value of his Tesla stock, Musk is worth more than $220 billion. Yet he has lined up seven banks to provide $13 billion in loans, including Bank of America and Morgan Stanley; and 19 equity investors for $5.2 billion, including $1 billion from the foundation of Oracle founder Larry Ellison, Musk’s good friend, and $1.89B from Saudi Prince Alwaleed Bin Talal.

Thus, even the richest person in the world, who has just acquired control of the most important media platform of our age, must answer to his investors, and uphold fiduciary duties, and bow to government laws and regulations.

The media will be blind to this, too busy serving up paroxysms of fake fear, castigation, and contrived outrage as Elon Musk messes with their platform: the horror, the horror. It will be fun to watch.