Twitter Deal — Minority Report

Sam Lin
3 min readOct 24, 2022

Musk-Twitter saga is a big & messy tech deal in 2022. The deal may close at $44B (the original offer price) soon with some concerns, such as a 75% downsizing, according to Bloomberg. Why is Twitter 2.0 needed? How might Twitter pivot to the next level? What are critical developments to watch next?

Stanford Dish Hiking Trailhead, CA

Twitter 2.0 wanted

Twitter may need to fight to survive, hopefully not just work harder. A valuable company has to be either profitable now or later (aka growing fast). Unfortunately, Twitter is neither. Its monthly active users have plateaued at 330m as the last official report in 2019. It has been struggling to become profitable with $5B in revenue with a net loss of $221M in 2021. Because the majority(89%) of revenue comes from advertising, its revenue will decrease further in 2022. Its Q2 revenue decreased by 1% to $1B.

Has Twitter Reached Its Natural Growth Limit?

The everything app: X

So, what could be new 10x opportunities for Twitter? “Buying Twitter is an accelerant to creating X, the everything app”, Musk tweeted. In other words, Musk wants to turn Twitter into a “Super App, such as WeChat. Where 300m users can do much more beyond getting news & maybe making news. Not only, new utility values allow Twitter to capture more value from a bigger pie. But also, the network may grow further by attracting new users & more engagement.

Based on Twitter’s “Inter-Person Communication API” & the established big network, many applications may be appealing. For example, Twitter 2.0 may make digital payment much easier, giving WeChat Pay’s success & Musk’s PayPal experience. One more thing, I cannot wait to see what new innovations can be built when Twitter’s “Communication & Control API” has cars & machines in the loop.

The six types of Twitter conversations

To buy or to build

Indeed, it may be tempting to build from scratch. Only, that takes much longer. Instead, Musk rather buys Twitter to accelerate X by 3 to 5 years. 2 key developments are most interesting to watch:

  1. How will Musk or his lieutenants transform & lead Twitter to innovate a 10x way out? Focusing “on hardcore software engineering, design, infosec & server hardware” is indeed a good way to increase the probability of a successful new venture. It’s very challenging with Twitter, a 16 years old company with 7.5K employees.
  2. With $44B changing hands, what more value can Twitter 2.0 create & how quickly?
Number of users since launch of social media platforms

Full Disclosure

The opinions stated here are my own, not those of my company. They are mostly extrapolations from public information. I don’t have insider knowledge of those companies, nor a whatever expert. Up to you to take it with a grain of salt or two 😉.

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Sam Lin

A Taiwanese lives in Silicon Valley since 2014 with my own random opinions to share. And, they are my own, not those of companies I work for.