Elon Musk Gets Started: Top Level Twitter Management

announcement

Tech billionaire Elon Musk is the new head of Twitter. Assuming that maximum media attention for the platform and its new owner were the primary objectives of the acquisition, the objective can be considered achieved.

It’s been two weeks since Twitter was sold and the toll is devastating: angry users, a slump in sales, mass layoffs and executive departures. Musk did not rule out the insolvency of the service when he appeared before employees.

Previously, the problem of verification ticks for subscription customers without prior verification wreaked havoc with fake accounts that looked deceptively real. The consumer protection authority FTC then sent an unusually clear warning to Twitter.

Sales collapse and interest expense

Musk has been preparing employees for the fact that Twitter could face a billion-dollar gap in its balance sheet in the next year. If, under these circumstances, it is not possible to bring in more money than is spent, “insolvency cannot be ruled out,” Musk said, citing the financial service. Bloomberg. His recent $4 billion stock sale of electric car maker Tesla was needed to save Twitter.

Twitter has an approximately $13 billion loan that Musk took out to purchase. Servicing this debt will reportedly cost the company about $1 billion annually. Therefore, advertising revenue, which previously accounted for 90 percent of sales, should be complemented by a subscription business.

The Tesla boss bought Twitter for $44 billion after several U-turns. The decision was made shortly before the Delaware Court of Chancery could clarify whether Musk – as he previously announced – can withdraw from the acquisition deal. Judge Kathleen McCormick had given the litigants until Oct. 28 to reach an out-of-court settlement.

Verification symbols cause confusion

On Wednesday, Twitter implemented the verification tick reorganization announced by Musk. So far they have been granted by Twitter to celebrities, politicians and companies, among others, after an identification check. Under the new system, anyone who pays $8 a month for a membership gets the tick. There is no identity check. The checkmark looks the same in both cases. Only after clicking on the symbol, you can find out from the text whether you are dealing with a previous, actually verified account or with a newly purchased tick.

Some users have created deceptively real-looking fake accounts with the new feature, for example for basketball star LeBron James, video game developer Nintendo or former US president Donald Trump. Pharmaceutical company Eli Lilly has apologized to Twitter users who were led to believe by a fake account that insulin would be given away for free in the future. “We are following recent developments on Twitter with great concern,” an FTC spokesperson said Thursday. No company or its boss is above the law.

Following previous violations at the FTC, Twitter pledged, among other things, to subject the new features to a data protection and security test before they were introduced. According to media reports, Musk assured employees in an email after the FTC’s warning that Twitter would do everything possible to fulfill its agreement with the agency. The FTC can impose hefty penalties. According to their investigations, Facebook paid out five billion dollars in 2019.

Employees must return to the offices

Musk also warned employees of the tough times in an email. The economic situation is “bad”, especially for a company that depends on advertising revenue. In the note, Musk also announced new guidelines for working from home: in the future, working from home will only be allowed with his explicit personal permission. Employees must be in the office at least 40 hours a week, according to the memo. Prior to the acquisition, Twitter employees could work from anywhere. Musk is considered an outspoken opponent of the home office trend, which he had already made clear to Tesla.

Last week, Musk cut about every second of Twitter’s roughly 7,500 jobs. According to reports, he now said that in some cases the company still had too many employees. On Thursday, other key executives left the company: Yoel Roth, head of objectionable content filtering, and Lea Kissner, head of information security. Robin Wheeler, recently head of advertiser relations, tendered her resignation, but was persuaded by Musk to stay on, media reports reported. She tweeted that she was still working on it.

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