Is Elon Musk the Worst Businessman in the World?

Even billionaires get things wrong.

But none more so than Elon Musk, who, a year after announcing his bid to buy Twitter, has squandered every opportunity he’s had to make the social-media company a success.

Musk’s mistakes have been many. He’s spent most of the past year behaving like a preschooler on a finger-load of frosting, and his childishness has affected the platform’s bottom line and alienated potential business allies. After announcing plans to buy out Twitter investors at an overinflated $54.20 a share, he quickly reversed course with an erratic campaign to scuttle his own deal.

But shareholders forced Musk to honor his initial offer and he took up residence in the company’s San Francisco headquarters, announcing immediate and drastic plans to cut staff rolls by 75 percent.

In the cold calculus of profit and loss, that move might have made sense to some. Musk took on $13 billion in debt to purchase Twitter. Servicing that will require nearly a billion dollars in annual payments to the banks — money Twitter is struggling to generate.

But Musk’s mistakes didn't end with the deal and the need to pay off the debt it generated. Early mass layoffs included many of those charged with keeping the social network up and running; in the months since, Twitter has suffered an increasing number of technological malfunctions.

A banner year of bad decisions

He then moved to introduce a pay-for-verification plan that would cost subscribers $8 per month. This fell apart almost immediately, after the heads of Twitter’s security, privacy and compliance teams quit. Twitter’s lawyers had warned that the mass verification push could jeopardize user privacy and expose the company to billions in government fines for violating a Federal Trade Commission consent decree. (While the blue-check verification scheme is back on track, scheduled to relaunch on April 20 — get it? — it’s not likely to generate anything close to the revenue Twitter needs to survive.)

By the end of the year, Musk reneged on his pledge to make Twitter “a common digital town square, where a wide range of beliefs can be debated in a healthy manner.” He began binging on right-wing memes, giving prominent space on the network to Twitter “investigations” — a series he dubbed the #TwitterFiles — that sought to prove MAGA conspiracy theories about alleged censorship of conservative voices, and supposed coverups of anti-vaccine and Hunter Biden-related news.

Never mind that the writers Musk cherry-picked to reveal the files had their own reactionary agendas, or that the Musk hype surrounding the files has turned Twitter into an even more divisive political echo-chamber. The highly partisan #TwitterFiles were a Musk miscalculation that alienated half of the users Musk once claimed he wanted to welcome into “healthy” discussions with their ideological others.

The worst decision of all

The list of Musk mistakes goes on: There’s his reckless suspension of journalists whose reporting he doesn’t like; his demand that the platform’s algorithms be manipulated to prioritize his posts above all others; his shutdown of independent researchers’ ability to access Twitter data; his censoring of critics of India’s conservative government; and his refusal to abide by a poll where a majority of users said he should step down as head of the platform.

It’s been a banner year of bad moves — so bad that the estimated value of Twitter has plummeted by tens of billions of dollars, making it arguably the most costly deal in the entire history of media acquisitions.

But Musk’s most damaging decision was one he made early on.

Shortly after taking the helm at Twitter headquarters, Musk called a meeting of civil-rights leaders to discuss Twitter’s commitment to community standards, election integrity and content moderation. Free Press Co-CEO Jessica J. González joined Musk on a Zoom call alongside representatives from the ADL, the Asian American Foundation, Color Of Change and the NAACP.

Following the meeting, Musk tweeted that the platform would “continue to combat hate and harassment and enforce its election integrity policies.”

“Twitter will not allow anyone who was de-platformed for violating Twitter rules back on [the] platform until we have a clear process for doing so, which will take at least a few more weeks,” he added. “Twitter’s content moderation council will include representatives with widely divergent views, which will certainly include the civil rights community and groups who face hate-fueled violence.”

But no sooner had he made this pledge than Musk started to decimate the trust and safety and human rights teams that were charged with combating the spread of hate.

Researchers at the Center for Countering Digital Hate found that the number of tweets containing one of several different racial slurs soared in the week after Musk bought Twitter. Research by CASM Technology and the Institute for Strategic Dialogue has found a major and sustained uptick in antisemitic posts on Twitter since Musk’s takeover.

After his meeting with the civil-rights leaders, Musk announced a “general amnesty” for banned accounts on Twitter. He reinstated thousands of accounts belonging to prominent neo-Nazis, white nationalists, misogynists, anti-immigrant and transphobic figures. The BBC analyzed more than 1,000 previously banned accounts that Musk had restored, and found that over a third of them had since spread abuse or misinformation on the platform.

Musk then eliminated COVID-related content moderation and — to no one’s surprise — the volume of lies about the virus and vaccines jumped alarmingly, according to analysis by the Queensland University of Technology.

Content moderation is key

The deluge of online hate and lies sent Twitter’s biggest revenue line into a tailspin: Advertisers, fearing damage to their brands, have left Twitter in droves.

After Musk ditched his promises to civil-rights leaders, Free Press, Accountable Tech and Media Matters for America launched the #StopToxicTwitter campaign, which has called on companies to stop advertising on the platform unless and until Musk enforces common-sense guardrails that will protect the health and safety of users.

More than 600 of Twitter’s top-1,000 advertisers have abandoned the platform, fearing that their brands wouldn’t be safe under Musk’s unsteady leadership. Their departure resulted in a 70-percent drop in Twitter’s December revenue over the previous year, according to Standard Media Index.

Musk chose to ignore a fundamental truth for social-media ventures: Effective content moderation is essential to growing healthy online communities and protecting brand safety. As Musk’s Twitter barrels toward insolvency, he has only himself to blame for lacking this basic business sense about social networks.

“It’s kind of a rite of passage for any new social media network,” writes Mike Masnick about the content-moderation learning curve. “They show up, insist that they’re the ‘platform for free speech’ without quite understanding what that actually means, and then they quickly discover a whole bunch of fairly fundamental ideas, institute a bunch of rapid (often sloppy) changes … and in the end, they basically all end up in the same general vicinity.”

Musk has yet to arrive in this vicinity and likely never will. The proof for Twitter is in its bottom line. Before Musk took charge, advertising sales made up 90 percent of Twitter’s revenues. Brands get nervous when they see their ads run adjacent to some of the most toxic posts. The companies that have left Twitter have put their money where their values are. And they aren’t likely to return until Twitter can make assurances that their ad buys aren’t helping underwrite the amplification of hate and lies.

We hoped Musk would have learned this lesson at the beginning: Twitter’s business will live or die on the decisions he makes or doesn’t make about content moderation.

But one year after Musk first announced his bid to take over Twitter — all of his decisions have been wrong.