Experts say that some companies may avoid advertising on Twitter if Elon Musk, who made a deal to buy Twitter for $ 44 billion, puts into action his plan to promote unlimited freedom of expression on the platform.
Elon Musk, who describes himself as an “absolute free speech advocate”, did not elaborate on what his plans are to “heal and fix” Twitter. Musk has often criticized Twitter for not doing enough to enforce the principle of freedom of expression and for pursuing policies of moderation and moderation.
Ads are Twitter’s main source of income. Experts say that unrestricted freedom of expression can turn into disinformation and hate speech, which may lead to the risk of companies that advertise on Twitter walking away from the platform.
Twitter, which is only one-tenth the size of Facebook, contributed to the spread of the Arab Spring, and was accused of playing a role in arranging the raid on the American Congress by supporters of former President Donald Trump on January 6, 2021.
“We expect companies to be less willing to spend on Twitter advertising if Elon Musk removes the content-editing practice to promote freedom of expression,” said Michael Nathanson, an expert at research firm MoffettNathanson.
According to Nathanson, Musk’s attempt to eliminate content balancing mechanisms may cause companies that advertise on Twitter to turn to Google, YouTuve, TikTok or other platforms to create brand awareness.
Having gained more than 80 million followers since joining Twitter in 2009, Musk announced on Twitter that he would attempt to withdraw Tesla from the stock market in 2018, and an investigation was opened against him by the Securities and Exchange Commission (SEC), which oversees the stock market and capital markets in the United States.
Twitter, which has more than 200 million users worldwide for 16 years, earned 4 billion 510 million dollars in advertising revenue in 2021. This amount accounted for 89 percent of Twitter’s total sales.
“Twitter’s challenge will be to protect and increase ad revenue in the face of Musk’s plan to allow free rein to the kind of controversial opinions that advertisers don’t like,” said Susannah Streeter, an expert at financial services firm Hargreaves Lansdown.
Musk also signaled a subscriber-based business model for Twitter. But such a move could lead advertisers to turn to smaller companies like Pinterest or Snapchat.
Experts from research firm MKM Partners said: “We believe that Twitter going through the ‘conversion to private company’ process in the next few months will have an increasing impact on the entire online advertising ecosystem.”
According to experts, the sales agreement approved by Twitter’s board of directors is not expected to be hit by any audit hurdles.