Musk has set himself a gargantuan goal, now he has to meet it

There are 1 027 days between now and 1st March 2025. We picked this date as for many businesses, 1st March is when a new financial year begins.

It’s also around that time that we get to take a peak at a company’s financial results for the year before, such as say, Twitter, which releases its financial results during the start of the year.

In 2025, if Twitter is still publishing financial results given it will be taken private by Elon Musk should the impending sale be successful, the financial results sure will make for interesting reading.

That’s because, according to a pitch deck the New York Times reported on at the weekend, by 2025 Twitter should have grown 176 percent between 2022 to boast 600 million users.

The bad news is that as it exists right now, Twitter can only dream of that sort of growth.

Taking a look at Fortune’s 100 Fastest Growing Companies for 2021, the fastest grower is Atlanticus Holdings which has reported a 168 percent increase on its returns over the three years leading up to June 2021. Unfortunately, unlike Atlanticus, Twitter is not an investment firm so that sort of growth, while inspiring, isn’t realistic right now.

Musk really has undertaken a Herculean task. But, perhaps Twitter has shown strong user growth over the last few years?

To that end, it isn’t but the full picture isn’t all that clear. This is because Twitter doesn’t report how many total users it has anymore, something it stopped doing in 2019. Instead the firm reports on how many monetisable daily active users there are on the platform.

This makes sense from a monetary perspective as advertisers want to know how often their messaging will be seen and as the majority of Twitter’s revenue comes from advertising, this way of reporting can be attractive. While it can be argued that Musk is talking total users, that would be strange given that number isn’t publicised so we’re using the numbers we have available to us.

When it last reported total users in its yearly financial results for 2018, Twitter had 321 million monthly active users which was a three percent drop from the 330 million it reported in 2017.

At its most recent count, Twitter reported it had 217 million daily active users with just five percent of users on the platform said to be false or spam accounts. In 2020, Twitter reported that it had 192 million daily active users. Between 2021 and 2020, when the world was online more than it has ever been, Twitter only managed to secure 13 percent growth.

The pandemic, which did initially help boost user numbers, has now dealt a hard blow to Twitter with the firm stating in its most recent financial year report that advertisers are more cautious about spending money on the platform.

“The COVID-19 pandemic has had, and continues to have, a significant impact around the world and has impacted our business, operations, and financial performance in different ways. The impacts of the COVID-19 pandemic, including supply chain constraints, labor shortages, and inflation, have caused advertisers in a variety of industries to be cautious in their spending, and in 2021 had a modest negative impact on, and may negatively impact in future periods, our advertising revenue. The extent of the ongoing impact of the COVID-19 pandemic on our business and on global economic activity is uncertain and may again in the future adversely affect our business, operations and financial results,” the platform told investors.

As it stands, Twitter will need to be revamped from the ground up into something completely different from what it is today. We don’t expect this to bring an end to the social platform as that brings in revenue, but we suspect that Twitter will look more like Meta in a year or two. That is, a holding company with various subsidiaries that operate under one banner and create solutions, even hardware, in-house.

We didn’t arrive at this thinking alone. On Friday, Musk tweeted, “If Twitter acquisition completes, company will be super focused on hardcore software engineering, design, infosec and server hardware”.

The mention of software engineering and design are interesting, but it’s the mention of infosec and server hardware that caught our attention. It’s well documented that Twitter makes use of its own hardware for its backend, but if Musk mentioned it, we suspect that there could be some big changes afoot.

While there has been much speculation about what type of users Musk’s Twitter would allow on the platform, it’s worth thinking about whether the users that are present today, will remain on the platform.

The job ahead is going to require more than unbanning users, championing free speech and adding subscription options and the moment the sale is approved, the clock Musk has set for himself starts ticking.

Here’s hoping the purchase gets approved because now we’re curious about Musk plans to grow a social media firm in the 2020s.

[Image – CC 0 Pixabay]


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