Musk’s $44bn Twitter buyout a 'mixed bag for marketers'

"The Twitter Board conducted a thoughtful and comprehensive process to assess Elon's proposal with a deliberate focus on value, certainty and financing,” said Bret Taylor, Twitter's independent board chair, in a statement published this afternoon. “The proposed transaction will deliver a substantial cash premium, and we believe it is the best path forward for Twitter's stockholders."

Twitter trading came to a pause earlier this afternoon before the news was announced.

The decision follows a weeks-long rollercoaster of negotiations between Twitter and Musk. After an April 4 regulatory filing revealed Musk as Twitter’s largest investor, holding a 9.2% stake, the social network offered the Tesla executive a seat on its board on the condition that he cap his ownership at 14.9%. Though he initially accepted the offer, Musk backed out on April 9 (with many under the impression that he did not want to be limited by the ownership cap agreement).

Less than a week later, on April 14, he issued an unsolicited bid to buy the entire company at $54.20 a share, expressing to Twitter executives — in what many dubbed a hostile, corporate raider-style bid — that it was his “best and final” offer.

Musk posted a number of since-deleted tweets expressing how he’d like to change the platform, even proposing that, were he in charge, he’d ban advertising altogether. It’s widely believed that Musk, who has called himself a “privacy absolutist” in the past, aims to loosen Twitter’s content moderation policies and deregulate speech on the platform.

Amid reported chaos within the company following the initial offer, Twitter’s chief executive Parag Agrawal (who took the post after Jack Dorsey’s departure late last year) met with concerned employees in an attempt to quell their concerns. Meanwhile, the leadership team and board of directors considered a “poison pill” plan to derail Musk’s takeover plans, per reporting by the New York Times. That was all turned on its head when the board today announced that the buyout will be in the best interests of Twitter investors.

Now that the deal has been solidified, experts estimate that Musk is much more likely to realize his goals of deregulating speech on Twitter — and potentially even re-platforming controversial users who’ve been banned for their ongoing violations of the site’s user policies, including former US president Donald Trump.

In a statement shared today, the billionaire said: "Free speech is the bedrock of a functioning democracy, and Twitter is the digital town square where matters vital to the future of humanity are debated. I also want to make Twitter better than ever by enhancing the product with new features, making the algorithms open source to increase trust, defeating the spam bots and authenticating all humans. Twitter has tremendous potential — I look forward to working with the company and the community of users to unlock it."

Industry leaders are generally more skeptical. "While I wish Elon Musk the best in his efforts to improve Twitter, he will likely find that remedying the toxic state of conversation on his new platform may not be not as simple as following the principles of the first amendment," says Roee Goldberg, the cofounder of social networking site OpenWeb.

If one thing’s for sure, says Dr Karen Freberg, a social media expert and professor of strategic communication at University of Louisville, it’s that user reactions will run the full gamut of possibilities. "There will be Twitter members who will leave, others will stay, and perhaps some will come back after taking a break."

As far as marketers' reactions go, she says, “it’s been a mix bag. Some think this is the best move the platform has seen, whereas others are saying they are moving on.” With potential changes to the platform’s content moderation policies coming down the pipeline (not to mention the possibility that Musk could ax Twitter ads altogether), many marketing leaders have expressed concerns about brand safety and suitability.

These concerns are only being amplified in light of today's news. "With Elon Musk calling the shots at Twitter, it will be up to brands that have invested heavily there and on other social platforms to use their advertising clout to ensure that ‘free speech’ doesn’t become a reinvigorated haven for fake accounts, misinformation and abuse," says Dorothy Crenshaw, chief executive and founder of adtech PR firm Crenshaw Communications.

Freberg, however, predicts that brands will stick around to see what changes Musk decides to implement before making any radical decisions.

While concerns about content moderation and brand safety abound, advertisers may have diverging reactions to today’s news depending on their unique interests. “Crypto advertisers and enthusiastic backers of Elon Musk will lean in and buy more advertising with Twitter. Elon brings with him significant cachet," says Todd Krizelman, cofounder and chief executive at advertising intelligence company MediaRadar. On the other hand, he points out, national consumer brands, “may be worried about what the content looks like with fewer regulations. Big advertisers have notably dropped off YouTube and Facebook when their brands were adjacent to unsavory, unregulated content.”

Not all industry players are overly concerned; adtech exec Matt Barash suggests that there's a lot of good to come from the acquisition. He points out that Musk has "radically disrupted" industries including automotive, space travel, payments and more in the last decade — so who's to say he can't bring good to social media?

"Musk is a maverick and a magician," he says. "He's a fearless visionary who is prone to making bold statements and promises — some of which are largely gamesmanship and others which become game-changing realities. If Musk remains true to his word, I'm hopeful his skillful ability to drive product innovation will lead to a more transparent social network with better guardrails and less toxicity for everyone. Love him or hate him, he delivers cool stuff to consumers and results to investors. If he continues those trends at Twitter, everybody wins."

Barash appears more confident than others that Twitter will remain a place "where users continue to spend time and engage with their beloved communities and where advertisers and marketers can connect with their audiences with confidence, continuity and improved business outcomes."

Barash's positivity appears to be reflected in the results of a survey by Momentive, which polled more than 7,000 US consumers (including 1,613 Twitter users) about their feelings on the acquisition. More than half — 53% — said Twitter was headed in the right direction with the deal; 44% felt it was headed in a worse direction.

But advertisers, it seems, may be holding their breath more than the average Twitter user for what's to come. The deal is expected to be completed later this year.

For more, sign up for The Drum’s daily US newsletter here.