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The brief reign of billionaire Elon Musk at Twitter has unleashed a wave of turmoil throughout the company. Firings, resignations and policy reversals leave the social media giant facing an uncertain future and many are worried about growing risks of misinformation. New York Times tech reporter Mike Isaac joined John Yang to discuss.
The brief reign so far of billionaire Elon Musk at Twitter has unleashed a wave of tumult throughout the company.
As John Yang reports, firing, resignations and policy reversals leave the social media giant facing an uncertain future and have many worried about growing risks of misinformation.
Judy, chaotic may be a mild description of Elon Musk's first week as CEO of Twitter. In just the last week, the company laid off half its 7,500 employees, key privacy and compliance officers quit, and Musk reportedly told employees that bankruptcy isn't out of the question.
Just today, Twitter put its $8 subscription for a blue verified check mark on hold, as fake accounts using that badge mushroomed.
Mike Isaac is a tech reporter for The New York Times. He's been covering all of this.
Mike, thanks for joining us.
This — Elon Musk started buying Twitter stock in January. He announced his bid in April. This was not an impulse buy. Did he have a plan going in, and he just collided with reality, or is he making this up as he goes along?
Mike Isaac, The New York Times:
I think a little bit of both, to be honest.
For a while, in between that April to the close of the deal, he did try to back out of it. And I think that was because unforeseen economic conditions and sort of how it would hammer his Tesla stock over time.
But, basically, he — I think he's a person who has a lot of ideas about how to change the service that he really enjoyed using and spent a lot of his time on, but didn't — didn't seem to have a real action plan the first days he got in there, and is now relying on a handful of really close advisers who he trusts, while cutting out a lot of people who have been at Twitter for years and have really studied how people use the product.
For better or worse, Twitter has become a key part of the — sort of the global news cycle.
Are the — this chaos, this sort of roiling of the waters at Twitter, are there repercussions for people who aren't on Twitter?
Yes, 100 percent.
I think Twitter is — like you say, it's small in terms of its social use by, let's say, everyday people. It's only 200 million, compared to Facebook and Instagram's multiple billion people. But all the news that hits on Twitter trickles down to other networks.
It flies out to Facebook. It hits on news networks. We talk about tweets and things in the newspaper and on TV all the time. And now he's implemented systems that make it more difficult to really immediately understand whether or not tweets or accounts are actually real, verified people.
For instance, Eli Lilly's stock started bouncing around when a fake account said that they would now be giving away insulin for free, basically, so they had to do damage control really quickly.
And also, he sort of — there's a little whiplash with this policy of now was saying that the subscription is going away. People can't buy that check mark anymore.
Yes, I think — I think it's — Elon — Elon did a tweet about this, actually. He said, we will continue to do a lot of dumb things at Twitter as we experiment and try to figure out our ideas.
And, look, I think that's the way he runs companies. He's very experimental and entrepreneurial in some ways. And many folks in Silicon Valley would call that a pro, rather than a con, and why they find him such an innovator.
But it's also — this is a very different company than Tesla or SpaceX or any of the other things he's done. And it has a really wide-ranging repercussions for how you and I just consume media on a daily basis.
Twitter's operating under a consent decree from the Federal Trade Commission over security issues.
And, this week, an agency spokesman said that it's watching developments with deep concern. Could the FTC step in?
I think it's absolutely the right question to be asking.
Elon has had run-ins with the SEC in the past. And different government agencies like the FTC keep a pretty close eye on his businesses. They particularly raised their eyebrows when a few of Twitter's top lawyers and sort of compliance officers quit and posted an internal sort of message to folks saying, don't cross any red lines and do anything illegal.
And that definitely got the FTC's attention. So I think they're going to be watching very closely. Twitter pushed back saying, of course, it would comply with everything, but they are under the spotlight right now.
Twitter was already sort of financially struggling before Musk took over. And now advertisers are staying away. They have lost — they're losing advertising revenue.
Is the company's future in danger?
I think they're really hemorrhaging cash and ad commitments much faster than I would have suspected, I think, than most industry watchers would have suspected.
Twitter is an advertising business and has been for a long time. It's not been a great business. It's been unprofitable for eight out of the past 10 years as a public company, but it has been run by ads. And Elon is trying to rapidly shift it to a — as you said, a — pay for — an $8 subscription business.
But he's doing it very quickly and bleeding money as he turns off advertisers, which I think is very dangerous in the long term.
You talked about his reputation for innovation at Tesla, at SpaceX. He took a lot of risks that so far have been paying off in those companies.
But you say that Twitter is a very different animal. Is it unlikely that he's going to be doing the same thing, that these risks are going to pay off at Twitter?
See, here's the thing.
I think the reason you have at least some people still at Twitter right now and at his other companies is that people who meets or are in Elon's orbit really do believe in the guy. They really are inspired by him and appreciate that entrepreneurial spirit that Silicon Valley celebrates and doles out venture capital to new start-up founders and things like that.
And so I think there are still a lot of people out here in the Valley that believe he can do it. But his first two weeks, if we're grading — we're not exactly grading on a curve, and he's having some very high-profile stumbles. So, we will see if he starts learning quickly from those sort of very difficult beginnings that he's had.
Mike Isaac of The New York Times on Elon Musk's learning curve at Twitter, thank you very much.
Thank you for having me.
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