Anxious employees, suspicious advertisers and paralyzed management: Twitter limps along as it waits to learn how Elon Musk’s takeover bid battle will end.
Just days before the first hearing in Twitter’s lawsuit to force the Tesla boss to close the $44 billion deal, the company is in limbo.
“The best conclusion for me would be that he leaves us alone to go on our merry way,” an engineer at the main social media network told AFP on condition of anonymity.
The engineer spoke of staff departures and a “climate of uncertainty that will not leave you in peace”.
“We’re still trying to do our jobs normally because the main reasons we chose to work for Twitter still apply,” he added.
But there was nothing normal about Musk’s unsolicited offer, which he has now backed down from, saying Twitter had obscured the number of fake accounts on the platform.
He has harassed the network, no less on his own platform, with mocking tweets about his management and leadership.
“Musk’s repeated disparagement of Twitter and its employees creates uncertainty … which hurts Twitter and its shareholders,” the firm’s attorneys argued in their lawsuit filed this week.
The billionaire’s comments “also expose Twitter to adverse effects on its operations, employees and stock price,” the attorneys added.
A judge has scheduled the first hearing in the case for Tuesday in a court in eastern Delaware.
– sluggish ad sales –
“Twitter is facing a huge image crisis and confidence in its leadership is faltering,” eMarketer analyst Debra Williamson told AFP. “But whether the Musk situation has affected his earnings is unclear.”
She said the most loyal advertisers likely stayed, but those less engaged on Twitter may have scaled back spending while waiting for the final game.
Angelo Carusone, president of watchdog group Media Matters, believes the damage has already been done because Musk has frequently criticized content moderation.
The fight against hate and disinformation is widely defended internally, but also by many advertisers who are concerned that their brands are not associated with toxic messages.
Carusone said that in early May, at an annual marketing event where companies negotiate large advertising deals, Twitter was “unable to give advertisers clarity or confidence” that it would continue to be a safe showcase for them.
“They didn’t come close to achieving what they normally sell at this event. And it’s obviously been slow going since then,” he added.
The San Francisco-based social network can’t afford to lose customers.
Unlike big fish like Google and Facebook parent Meta, which dominate online advertising and make billions in profits, Twitter has lost hundreds of millions of dollars in 2020 and 2021.
According to eMarketer, the group will account for less than 1 percent of global ad revenue in 2022, compared to 12.5 percent for Facebook, 9 percent for Instagram and nearly 2 percent for booming upstart TikTok.
Additionally, Twitter’s user base in the United States is expected to grow little and possibly even shrink, noted Williamson, the eMarketer analyst.
– “Twitter can’t reply meaningfully” –
Musk once wowed potential Twitter investors with his talk of quintupling earnings and aiming to reach 1 billion users by 2028.
Instead, a court battle builds up that “either ends up with Twitter owned by a dissatisfied investor who decided they don’t want it after all, or left alone with Twitter and weaker than it was before this all started,” Williamson added .
The battle is expected to last for months, at a time when economic headwinds are steady and companies need flexibility to monetize new audio and video formats, diversify revenue streams, and attract younger audiences.
“At least Facebook can respond to current threats, even if they respond poorly, they can respond,” said Carusone, president of Media Matters.
“What Twitter can’t do right now is respond to anything that makes sense.”
The social network’s lawyers have accused Musk of withholding consent to two employee retention programs “aimed at retaining select top talent during a time of intense uncertainty largely caused by Musk’s erratic behavior.”
Internally, too, some employees have lost confidence in management, which they would have liked to have been more combative in dealing with the richest person in the world.
Parker Lyons, a financial analyst at Twitter, went so far as to tweet several memes targeting the company’s board of directors over its deal with Musk.
One shows the board firing bullets in Twitter above the sarcastic caption: “Who could have done that?”
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