Just days before the first court hearing in Twitter’s lawsuit to force the Tesla boss to close the US$44 billion deal, the firm remains in limbo. — AFP photo
Saturday, July 16, 2022 11:21 AM MYT
SAN FRANCISCO, July 16 — Concerned employees, wary advertisers and hamstrung management: Twitter is waiting to know how the fight over Elon Musk’s buyout bid will end.
Just days before the first court hearing in Twitter’s lawsuit to force the Tesla boss to close a US$44 billion (RM195.7 billion) deal, the firm is in limbo.
“The best conclusion for me would be that he leaves us alone, so that we can go on our way,” an engineer at the leading social media network told AFP on condition of anonymity.
The engineer spoke of the staff’s departure and “an atmosphere of uncertainty that leaves no one with a calm mind.” “We are still trying to do our job as normal, because the main reason we worked for Twitter is still right now,” he said.
But there has been nothing normal about Musk’s unsolicited bid, from which he has now backtracked, saying Twitter has taken note of the number of fake accounts on the platform.
He has irked the network, no less, on his platform with witty tweets about the network’s management and direction.
Lawyers for the firm argued in their lawsuit filed this week, “Musk’s repeated insults to Twitter and its personnel, create uncertainty … that harm Twitter and its shareholders.”
The billionaire’s remarks “also expose Twitter to an adverse effect on its business operations, employees and stock price,” the lawyers said.
A judge has scheduled the first hearing of the case for Tuesday in a court in the eastern state of Delaware.
sluggish ad sales
“Twitter is facing a major image crisis, and confidence in its leadership is shaky,” eMarketer analyst Debra Williamson told AFP. “But whether Musk’s position affected its revenue is unclear.” She said the most loyal advertisers are likely to be stuck around, but those less committed to Twitter have reduced their spending while waiting for the endgame.
Angelo Carusone, president of watchdog group Media Matters, thinks the damage is already done as Musk has been a frequent critic of content moderation.
The fight against hate and propaganda is widely defended internally, but also by many advertisers, concerned that their brands are not associated with toxic messages.
Carusone said that in early May, at an annual marketing event where companies negotiate large advertising deals, Twitter was “not able to give advertisers any clarity or confidence” that it would continue to secure exposure for them.
“They didn’t go anywhere close to what they usually sell for. And it has clearly been sluggish since then,” he said.
The San Francisco-based social network can’t afford to lose customers.
Unlike big fish like Google and Facebook parent Meta, which dominate online advertising and generate billions in profits, Twitter lost hundreds of millions of dollars in 2020 and 2021.
According to eMarketer, the group will capture less than one percent of global advertising revenue in 2022, compared to 12.5 percent for Facebook, 9 percent for Instagram and about two percent for fast-growing TikTok.
Furthermore, Twitter’s user base is expected to barely grow and may even shrink in the United States, noted Williamson, an eMarketer analyst.
‘Twitter can’t provide meaningful answers’
Musk once had potential Twitter investors talking about growing revenue fivefold and aiming for one billion users by 2028.
Instead, a court battle is ending with “Twitter either owned by an unhappy investor who decided it didn’t want it at all, or with Twitter on its own and it was weak before it all started.” ,” Williamson said.
The battle is set to go on for months, and at a time when economic constraints are stagnant and firms need to be nimble to monetize new audio and video formats, diversify revenue sources, and attract younger audiences.
“At least Facebook can respond to current threats, even if they are responding poorly,” said Carusone, president of Media Matters.
“What Twitter can’t do right now is have a meaningful answer to anything.” Lawyers for the social network have blamed Musk for withdrawing consent to two employee retention programs “designed to keep selected top talent during a period of intense uncertainty arising in large part from Musk’s erratic conduct.” Internally, some employees have also lost faith in management, which they would have preferred to be more belligerent in dealing with the world’s richest man.
Parker Lyons, a financial analyst on Twitter, tweeted several memes targeting the firm’s board for its deal with Musk.
In one, the board is shown firing shots at Twitter over the sarcastic caption: “Who could have done that?” — AFP