Now what?

Elon Musk paid $44 billion for Twitter. Next up: Making Twitter worth (at least) $44 billion.

Congratulations, Elon Musk?

Eleven days ago you told the world you wanted to buy Twitter for $43 billion dollars, which generated some… skepticism. Now it looks like you’re really going to do it.* For $44 billion, it turns out.

Now what? More specifically: Now, how are you going to run Twitter, which is a for-profit business that isn’t very good at making a profit?

The world’s richest human being has made a point of saying that he’s buying Twitter because he cares about free speech, not money. For now, let’s take him at his word.** But even in that case, Musk will want Twitter to, you know, make money.

And more than that, he will want Twitter to be worth at least as much as he paid for it — which was 38 percent more than Wall Street thought it was worth the day he announced his plan to buy it. And he, and the people who are helping him finance the deal, would presumably like it to be worth even more.

So how are they going to do that?

To recap: Twitter’s biggest problem as a business — one that it has always struggled with — is that it’s a free, ad-supported business that doesn’t have enough users to make it attractive to advertisers.

As I wrote 11 days ago, when ElonTwitter did not seem inevitable, at all:

Twitter has the same business model — free and supported by advertisers — as Google and Facebook. But it has much, much less reach than those companies, so advertisers aren’t going to give it as much support.

That’s why Google brought in $257 billion last year, and Facebook brought in $117 billion — and Twitter did $5 billion. And it’s why Google is worth $1.7 trillion, Facebook $583 billion, and Twitter $36 billion.

So. What can Elon do to make Twitter more valuable? He hasn’t said out loud, though he reportedly made some kind of gesture to this when he was courting investors last week.

But Twitter is Twitter, so people have suggestions. Let’s take a quick survey:

Cut Costs. The standard mergers & acquisitions playbook always includes this one: The company you bought would work better with fewer people running it. Here’s investor and Twitter power user/troll Marc Andreessen:

Presumably Musk already has plans to fire some of Twitter’s employees — and perhaps he anticipates other workers leaving in a huff simply because he owns it. And I would assume he plans to shrink its content moderation team, since he says he wants less content moderation. On the other hand: While Twitter’s workforce grew by 36 percent last year, it still only has 7,500 employees — just 10 percent of Facebook’s total. And those employees do generate revenue — about $1 million per year, per CSIMarket. Elon Musk’s Tesla, by the way, generates about $760,000 per employee.

Bring in more Tweeters. This is a tough one. Twitter’s audience growth hasn’t totally flatlined — it’s actually ticked up in recent years — but Twitter has spent years trying to get more people to sign up, with little to show for it. (Which is one of the reasons the company stopped reporting its monthly user numbers back in 2019.) The conclusion, from just about every Twitter person I’ve ever talked to: Everyone knows what Twitter is, and the ones who want to use it, do. Could you make the product more appealing to more people? I guess? But no one knows how. (And don’t bother arguing that there is a horde of conservative/free thinker users who will flood back to Twitter if Elon makes it more inviting for them: If there was, Donald Trump’s Truth Social would be booming, not a ghost town.)

Sell more/more expensive ads. Also a tough one. A line that most Twitter fans agree with goes something like “Look at how influential this platform is! After all, we’re on it! So advertisers should be clamoring to reach us, the influential people.” But advertisers are not buying it: They prefer to go where they can reach a LOT of people at once. And while advertisers are newly interested in spending money on “influencers” on social media, who can promote their stuff to their followers, those influencers don’t hang out on Twitter — they’re on YouTube, Instagram, and TikTok.

Sell access to Twitter. This is a popular one, and syncs with the “look at how influential Twitter is” argument: Twitter is seemingly very important to Elon Musk. Wouldn’t he pay to use it? And the answer there turns out to be: Yes. But what about everyone else? “I think there’s one move left,” a former Twitter executive mused to me today. “Some form of pay-to-tweet.” You don’t charge anyone to read Twitter — just to make Twitter. Maybe it’s a single price, maybe it scales up based on reach. This is an idea Twitter has been flirting with since the very start — but not really doing, beyond its “promoted tweet” ads. And if you’d like to put a positive spin on it, you might note that pay-to-tweet should persuade most people from tweeting out the dumbest stuff. On the other hand, you can imagine scenarios where people who have a lot of money tweet a lot of dumb stuff, because. And where people who have less don’t tweet as much — or at all. That’s no fun, or much use to anybody.

Sell something else? Like, Twitter, says tech commentator Ben Thompson, who argues that Twitter should just focus on running Twitter — the service that displays your tweets around the world in real time — and then license access to that to anyone who wants to build a business around it, however they’d like. Think of it as a white label Twitter that Twitter sells to people who want to make their own Twitter: Maybe you want to run a Twitter service that only focuses on long-haired Persian cats and their owners, and your friend wants to run one dedicated to ivermectin fans: You buy the data from Twitter and present it any way you like. Ads? Pay to read? Whatever you decide: Twitter’s just selling you the gas.

But again, Musk really does need… something. Even if he really is buying Twitter on behalf of humanity, he’s bought a business. And simply running Twitter as a non-profit for what he describes as the greater good isn’t an option. His Twitter deal is partially financed with debt from banks, who will eventually want their money back; some of the debt is also linked to his Tesla shares, and Tesla stock is both volatile and very, very highly valued. If it were to crash (see: Netflix) Musk’s finances would get quite rickety, quickly.

There’s also the possibility that Musk doesn’t really touch Twitter that much at all: He’ll pull back on moderation, allow the likes of Donald Trump back on (no thanks, says Trump), and maybe decide it’s a lot more fun to be a Twitter user — for free! — than a Twitter owner. And then look for someone to take it off his hands. That may turn out to be much harder than buying Twitter.

* Standard caveat about the fact that the deal hasn’t formally closed, along with a Standard Elon Musk caveat that notes that he is… erratic.

** Taking Elon Musk at his word can be an expensive and risky proposition, but you’re just reading some words on the internet for free, so we’re probably okay here.

Got a better idea about what Musk should do with Twitter? Let me know (Twitter works, and so does this email: kafkaonmedia@recode.net).