Elon Musk finalized a $44 billion (Sh5 trillion) deal to acquire Twitter this week, prompting warnings from industry experts about potential advertiser backlash. Analysts highlighted concerns that Musk's advocacy for unrestricted speech could lead to increased misinformation and hate speech, making the platform less appealing to brands.
Twitter's advertising revenue, which accounted for 89% of its $4.51 billion 2021 earnings, faces uncertainty under Musk's proposed changes. MoffettNathanson analyst Michael Nathanson warned that removing content moderation could drive advertisers to competitors like YouTube and TikTok, while Hargreaves Lansdown's Susannah Streeter noted the challenge of balancing free speech with advertiser comfort.
Musk, who joined Twitter in 2009, has previously faced regulatory scrutiny over public statements, including his 2018 announcement about taking Tesla private. The 16-year-old platform, with 200 million users, now navigates uncharted territory as it transitions to private ownership.
European officials emphasized that the Digital Services Act applies to all major platforms. EU Commission spokesperson Johannes Bahrke stated the regulation ensures "democratically validated rules" to protect online fundamental rights, while Commissioner Thierry Breton noted Musk's familiarity with European regulations.
Analysts at MKM Partners predict significant shifts in the online advertising ecosystem as Twitter moves toward a private entity. The deal, approved by Twitter's board, remains pending regulatory approval with no immediate hurdles expected.
The deal has been approved by Twitter's board and is unlikely to face regulatory hurdles, according to analysts.
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