Corporations Life

Twitter – Did they Have a Choice?

When Twitter ($TWTR) announced last week that they were permanently suspending the President’s personal account I was surprised  – but I really don’t think they had an option. It’s very clear that Twitter’s growth has been heavily influenced by Trump and I expect the company will see user attrition as a result. Already, over the last few days, their stock has been falling. That said, there was no way out here. The simple fact is that Twitter makes money from advertisers and this cohort is about as risk averse as can be. Brands don’t want to be next to controversial rhetoric so they often will blacklist platforms or services that could be considered threatening. During my time at Jarden when I was overseeing our global advertising, we were constantly tweaking our buys to avoid anything that could be considered controversial.  If Twitter had done nothing, while their user base would likely have remained robust, their earnings would have fallen precipitously as advertisers abandoned the platform. This, also likely would have been a jolt to the stock – and ultimately their business model. 

The social media companies have been protected under Section 230 from censoring speech on their respective platforms, but their latest move shows that this can be very tricky to navigate. Politicians are looking for reform and the ability to break apart the companies but I’m not sure if that will ultimately fix anything as there are numerous other social media startups circling that will eventually encounter the same challenges. Ultimately, I’m in the camp of forcing the bigger tech companies to open up their platforms to others to build on top of. This was the foundation of the World Wide Web, of email. It’s virtually impossible to create a social media company today knowing that the deep pocketed incumbents could quickly match products –  so an open ecosystem would be a boon for many entrepreneurs.   Unfortunately, this pivot requires massive disruption to their business models and is not something that I think we will see in the immediate future. Until then, I’ll continue to contemplate if social media is a net positive for society overall? 

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