Forget about the endless drama, the bots, the abrupt reversals, the spectacle, the alleged risk to the republic and all we hold dear. Here is the most important thing about Mr Elon Musk’s buying Twitter: The moguls have been unleashed.
In the old days, when a tech tycoon wanted to buy something big, he needed a company to do it. Mr Steve Case used AOL to buy Time Warner. Mr Jeff Bezos bought Whole Foods for Amazon. Mr Mark Zuckerberg used Facebook to buy Instagram and WhatsApp and Oculus, and on and on. These were corporate deals done for the bottom line, even if they might never have happened without a famous and forceful proprietor.
Mr Musk’s US$44 billion (S$62 billion) takeover of Twitter, which finally became a reality last Thursday – six months after he agreed to the deal – is different. It is an individual buying something for himself that 240 million people around the world use regularly. While he has other investors, Mr Musk will have absolute control over the fate of the short-message social media platform.
It’s a difficult deal to evaluate, even in an industry built on deals, because this one is so unusual. It came about whimsically, impulsively. But, even by the standards of Silicon Valley, where billions are casually offered for fledging operations – and even by the wallet of Mr Musk, on most days the richest man in the world – US$44 billion is quite a chunk of change.
Buying Twitter is also an overwhelmingly brash action – a belief that a communications platform that has defied all efforts to become seriously profitable, and that has been ensnared in controversy about the limits of speech almost since its founding in 2006, can be easily fixed by one person.
If you have billions of dollars these days, however, belief in yourself is never in short supply.
Mr Musk’s fortune comes from electric carmaker Tesla, which he turned into the leading vehicle for changing how Americans drive, an uphill task if there ever was one. Mr Musk and Mr Bezos are separately vying to recreate the space programme, which in the 1960s was deemed too important and too expensive to be run by anything except the federal government.
Mr Zuckerberg has changed Facebook’s name to Meta and reoriented the company to create a virtual world where people will henceforth “live”. Mr Peter Thiel, who co-founded payments firm PayPal and was an early investor in Facebook, has become the United States midterm elections’ most prominent campaign contributor, pumping tens of millions of dollars into right-wing congressional candidates. Two of his former employees are the Republican nominees for senator in Ohio and Arizona.
Professor Richard Walker, a professor emeritus of economic geography at the University of California, Berkeley and a historian of Silicon Valley, sees a shift in the locus of power.
“In this new Gilded Age, we’re being battered by billionaires rather than the corporations that were the face of the 20th century,” he said. “And the tech titans are leading the way.”
Mr Musk, who disbanded Tesla’s public relations department, didn’t respond to a message for comment.
Rich people have long wanted to own media properties, a tradition the tech titans have continued. Mr Bezos bought The Washington Post for US$250 million. Mr Marc Benioff of Salesforce owns Time magazine. Mr Pierre Omidyar of eBay developed a home-grown media empire.
Deals have been a feature of Silicon Valley as long as there has been a Silicon Valley. Often, they fail, especially when the acquisition was made for technology that either quickly grew outdated or never really worked at all. At least one venerable company, Hewlett-Packard, followed that strategy and has practically faded away.
Data firm Dealogic compiled for The New York Times a list of the top 10 biggest tech deals since 1995 by deal value. By that measure, Mr Musk’s purchase of Twitter is No. 10. Microsoft’s US$70 billion-plus acquisition of Activision Blizzard, which is pending, has garnered a fraction of the attention despite being No. 2.
Activision Blizzard is merely a video game company. Mr Musk has maintained from the beginning that buying Twitter isn’t a trophy or a game, or a scheme to increase his net worth. Instead, he has cast it in the grandest terms possible.
“Having a public platform that is maximally trusted and broadly inclusive is extremely important to the future of civilisation,” the entrepreneur said in April after sealing the deal. “I don’t care about the economics at all.”
He cared a little more when the subsequent plunge in the stock market meant that he was overpaying by a significant amount. Analysts estimated that Twitter was worth not US$44 billion but US$30 billion, or maybe even less. For a few months, Mr Musk tried to get out of the deal.
Prof Walker, the author of Pictures Of A Gone City: Tech And The Dark Side Of Prosperity In The San Francisco Bay Area, fears for the future.
“There’s no counterbalance to the new business moguls,” he said. “Unions, fraternal organisations and local media have been greatly weakened. The general public is cut off from these positive influences and awash in misinformation.”
If Mr Musk’s buying Twitter signifies the beginning of something, it also, in another way, represents an ending. The other social media platforms are closely held by their founders through their companies’ share structures. No one could buy Facebook away from Mr Zuckerberg without his agreement, or Snap from its chief co-founder Evan Spiegel.
Mr Richard Greenfield, a media analyst at LightShed Partners, said: “What was unique about Twitter was that no one actually controlled it. And now, one person will own it in its entirety.”
He is relatively hopeful, however, that Mr Musk will improve the site, somehow. That, in turn, will have its own consequences.
“If it turns into a massive home run,” Mr Greenfield said, “you’ll see other billionaires try to do the same thing.” NYTIMES