Twitter is in trouble.
As of writing, the firm has reportedly seen an exodus of executive-level staff, not 24 hours after the team attempted to put on a brave face during a Twitter spaces call in which Elon pleaded with the community to give him more time. It seems that time may be running out.
Twitter has been embroiled in drama for the best part of a year at this point. Elon Musk of Tesla and SpaceX fame took a significant investment in the company, before inexplicably offering $44 billion to purchase the entire thing. Realizing his mistake, he attempted to pull out of the deal, before accepting that he had no legal basis to do so. As a result, he turned up to the firm’s San Francisco offices carrying a sink. Now it seems that playful visual metaphor may need to be repurposed, given that it seems the company is sinking.
Musk’s rapid upheaval of Twitter’s culture saw hundreds of staff laid off, advertisers abandoning ship, a whirlwind of rules abuse and impersonation, and now, an exodus of key staff. Musk also reportedly briefed staff that the firm may, in fact, have to declare bankruptcy.
Wow. Elon Musk just told Twitter employees he’s not sure how much run rate the company has and “bankruptcy isn’t out of the question.”November 10, 2022
Twitter has a small footprint in the global landscape of social media, dwarfed by platforms like TikTok and Facebook. Despite this, the small platform enjoys a gargantuan amount of influence, allowing creators and communities of all shapes and sizes to congregate in a single place. Twitter is far more collaborative than platforms like TikTok and Instagram, functioning almost more like a global chat room than a traditional individual-based social media platform. This fact also made it notoriously difficult to monetize, however, with the firm posting profitable quarters only a couple of times in its lengthy history.
Regardless of what happens next, I think it presents a unique and rare opportunity for Microsoft, who has shown interest in purchasing social platforms like Discord and TikTok in the past.
Here’s why I think Twitter is actually a perfect fit for Microsoft.
1. Microsoft has little social clout
Microsoft’s business is incredibly diverse, with a portfolio spanning business interests, consumer hardware, subscription services, and even military contracts. One area that has generally eluded the company, however, is social media.
Of course, Microsoft owns LinkedIn, but it’s a stuffy and “unfun” social network that orients around presenting your most professional self for recruiters and work peers. Twitter would be the ideal yin to LinkedIn’s yang, giving Microsoft a fun and vibrant community for developing the reach of its growing Bing Ads business.
Microsoft clearly seems to agree with me on this one. The firm reportedly attempted to purchase chat platform Discord, and was also involved in the strange TikTok acquisition drama of the Trump presidency.
Microsoft could grab Twitter for a bargain given how things are going if the will and interest are there. And it certainly seems to me that Microsoft is interested in getting into consumer-facing social media.
2. Inflation means their cash reserves are losing value
While inflation may have peaked, pending some positive economic news lately, it’s still experiencing some surprising highs. With inflation up, the value of Microsoft’s vast cash reserves is technically decreasing, as the value and purchasing power per dollar is diminished.
Inflation will doubtless come down from its recent peak either now or in the near future, but it’s always gradually rising. The value of Microsoft’s cash reserves is static unless spent, and right now, Twitter is looking likely to be either shuttered or sold for a loss as Elon’s strange experiment increasingly goes awry.
Microsoft is purchasing Activision Blizzard for $69 billion dollars, yet they still have vast cash reserves beyond this. Elon Musk would probably be eager to at least break even on his insane $44 billion punt on Twitter, but I’m sure given the way things are going, there’s going to be a lot of wiggle room here.
3. Deeper integration with consumer-facing platforms like Xbox and Windows
Microsoft has a checkered history with consumers. Its mismanagement of the Windows Phone and Lumia brands left quite literally millions of consumers with phones facing an end-of-life prospect, which doesn’t exactly instil confidence. The Xbox One launch was also notoriously botched, with mixed messaging and a price point that allowed Sony’s PS4 to aggressively undercut while offering more power.
Microsoft has turned it around in recent years. Surface devices have proven themselves in the marketplace and created entirely new computing categories. Microsoft has also rebuilt Xbox’s image (with heaps of marketing on Twitter, I might add), building up the value of the brand. However, Microsoft has also struggled to compete in new categories like streaming video, and video sharing.
Twitter would give Microsoft an established audience that its failed Mixer streaming platform never had. It would also give Microsoft a platform for deeper community-building tools and video sharing for its platforms like Xbox, and in the future, Battle.net, should the Activision-Blizzard purchase go through. Game clips, game streaming, and perhaps even direct Xbox Cloud game streaming right from within the Twitter app.
4. Great PR move
This ties in again with consumers, but Microsoft still has a bit of an image problem. Beyond the positive communities surrounding Xbox, Microsoft’s purchase of Github for example was met with alarm and distrust from the developer community initially, although the platform has gone from strength to strength and maintains a commitment to open source.
Twitter is a platform loved by millions of consumers, tens of thousands of communities, and thousands of brands. Elon Musk’s harebrained attempt to make sense of his absurd $44 billion purchase of the platform has created a vacuum in the social media landscape, leaving many small businesses and content creators wondering if they’re going to lose a massive chunk of their audience overnight.
Were Microsoft to come in and save this much-beloved platform, it would most likely be met with appreciation that, at least typically, no amount of money could typically buy.
5. “Empower others to do more”
I built my entire career on this platform. I was a high school dropout. I had no prospects. I had no qualifications. It’s only through the use of Twitter that I was able to meet our EIC Daniel Rubino, build up an audience while hobby blogging, and eventually find employment.
Paraphrased, Microsoft’s mission statement (opens in new tab) includes the mantra “empower others to do more” and no platform exemplifies this like Twitter. Yes, it loses money (right now), but the social empowerment Twitter brings to individuals and marginalized groups cannot be understated. Small indie games can find massive audiences through platforms like Twitter. Individuals like myself have built up careers and completely changed the fortunes of themselves and their families through the possibilities therein. Protest movements against oppressive regimes organize on platforms like Twitter, with whistleblowers using the platform to highlight corruption and injustice the world over.
If Microsoft is truly serious about its mission statement “empower others to do more,” no gesture would prove that more succinctly than saving Twitter.
