Chatting about Twitter with WTIC’s Brian Shactman

Every couple of weeks I appear on WTIC-AM’s morning drive show “Brian and Company” here in Connecticut. This week host Brian Shactman & I talk about Elon Musk’s recent acquisition of Twitter and what it might mean for users whether they have a blue check mark or not! Listen here:

Elon’s erratic behavior aside I do think there are opportunities for independent creators if the playing field is leveled and a revenue sharing model is developed.

The commoditization of the “blue check mark” that created two tiers of users allowed the prior ownership to pick winners and losers. Contrast that to YouTube where every piece of content has the chance to be successful based on how well it holds a viewer’s interest.

Years ago one of my laptop reviews on YouTube got placed higher in search than the same product reviewed by the Wall Street Journal. That was empowering and indicative of YouTube’s desire to be focused on users and develop a culture of partnership with those who submit content to the platform.

Twitter doesn’t give the smaller voices that same opportunity. The verification process was never fair to anyone and often it was about who you knew at Twitter as opposed to a true measure of the credibility and quality.

Twitter will have a bumpy ride ahead. I think there’s some opportunity for independent voices but time will tell depending on how competently these changes are implemented and rolled out to users.

Twitter Deal “On Hold” Pending Due Diligence on User Numbers

I speculated about this in my May 2nd Weekly Wrapup video and now it appears as though it’s coming to pass:

Elon Musk today announced that the Twitter deal was “on hold” until he could verify the company’s claims that fake users account for only 5% of their overall user figures.

Any acquisition has a period of due diligence to ensure that the company being acquired is worth what the owners say it is – and in the case of Twitter the number of users is the foundation of Twitter’s value proposition.

As a mostly free service Twitter relies on advertising and advertisers want large audience numbers with some assurances that the audiences Twitter serves are actually real people.

Twitter has long struggled with calculating the exact number of unique users on their service. In fact they disclosed that they had been overstating user numbers from March 2019 through the end of 2021 according to their most recent quarterly results:

In March of 2019, we launched a feature that allowed people to link multiple separate accounts together in order to conveniently switch between accounts. An error was made at that time, such that actions taken via the primary account resulted in all linked accounts being counted as mDAU. This resulted in an overstatement of mDAU from Q1’19 through Q4’21.

This overstatement alone accounted for 1.9 million duplicated users. If Twitter is overstating users that they know are humans behind the keyboards how can anyone be confident in Twitter’s claims that fake users are only 5% of their user base? Given the company is incentivized to demonstrate user growth they likely did not invest the resources to detect fake accounts and remove them.

Musk is in the driver’s seat now. If he walks away from the deal the stock tanks as it will erode confidence in the validity of Twitter’s user numbers. Twitter’s Board of Directors will likely feel some pressure to reduce the $44 billion price tag to get the deal done.