One of the world’s most wealthy and influential men has been in the eye of a storm for his controversial decision to buy nothing less than, yep that’s right, Twitter itself. The Tesla, SpaceX and Boring Company entrepreneur started the negotiations with the board in April of this year… and the deal now looks like it’s falling apart!
While there were divided opinions from Twitter shareholders on what the right move was for the company, that all seems moot now, because a key point of contention, the percentage of Twitter users who may be Twitter bots, seems to have scuttled the deal. Elon is pulling out.
How everything started:
This Tweet led to conversations with Twitter’s management including CEO Parag Agrawal about a deal. An offer, supported by billions in debt and Elon’s own cash and equities wealth, was on the table.
However, when it looked like the mega-acquisition was moving towards a close, a new concern arose in the head of the the potential buyer: Is Twitter full of bots?
The first thing you need to know is what a bot is. A Twitter bot is an account operating under a false identity that’s controlled by a third party for different purposes: to joke around, support a political or religious message, create chaos and propaganda, etc.… So, what does this have to do with anything?
What’s the problem with Twitter that could push away Elon from buying?
Twitter regulatory filings have been saying for a long while that the percentage of fake accounts is around 5%. But there’s a group of people that think otherwise. External observers accused the company of lying about this number and that it was probably picked to keep a credible facade. And yes, one of these doubtful observers is Elon Musk.
Our favorite multimillionaire is asking Twitter to give faith in the fake account’s number before closing the deal. These accusations were not well received by the current shareholders who are not enthusiastic about the whole situation and that are worried about Musk wanting to take control of the company to destroy it.
How a fake number of users could affect Twitter revenue?
So, you might wonder: But who cares if there are bots? Well, is not that simple.
The value of this social media is estimated on the number of accounts that are able to see advertising. That’s why if it is demonstrated that in fact, if Twitter lied about this number, that would mean a drop in the “monetizable daily average users”. In simple words: fewer followers = less value on advertising = the less they can charge for it.
Finally, this would reflect on the main company’s perceived market capitalization value for current and future shareholders because: who would want to invest in a social network full of ghosts?
How does Elon know what’s in the Twitter bot black box?
Many external observers have done studies on the Twitter platform and some of them assure that the number of bots could be 3 to 5 times higher than what the company is admitting. These allegations are nothing new. In 2016 over 50,000 bots from a Russian troll farm tried to influence and degrade the integrity of the United States presidential election.
It’s important to clarify that this problem is not exclusive to Twitter. All social media platforms struggle to regulate fake accounts and their sabotage. Facebook, among others, is one of these platforms that has incorporated AI systems to detect suspicious activity and try to prevent as its most these kind of accounts to grow. Or at least that’s what they say.
After the Russian operative incident that spread misinformation among thousands of users, Twitter took matters into its own hands and implemented “Operation megaphone”. This initiative was looking to study a bunch of fake accounts taken as a sample and try to determine patterns that could be helpful to identify those kinds of accounts later on the platform.
Kathleen Carley, a professor at Carnegie Mellon whose also the director of the University’s Center for the Computational Analysis of Social and Organizational Systems says that studies show a number percentage of bots in the range of 5% to 35%. The number of bots soars especially when it comes to polemic topics such as political agendas, promoting a specific stock or product, or when money-raising is involved.
Experts said that even with the greatest efforts it is impossible to be precise about the current number of bots for several reasons:
- The minimal or inexistent info and collaboration that Twitter offers to researchers.
- The inevitable uncertainty produced by confusing bots and humans, no matter how edgy it is the technology used.
- Underneath intentions when it comes to financial interests of the company.
Are bots the true concern of Musk?
Since these accusations aren’t new there are a lot of speculations about what’s the reason behind Elon Musk’s insistence on putting on hold the negotiations. Does he really want to be Twitter’s owner?
Well, a lot of people think that Spacex owner is just in the middle of a buyer’s remorse crisis. For the sale to be settled there must be a transaction for $44 billion. To accomplish this, Elon is giving away $21 billion in cash, his 16% stake in Tesla securing margin loans and multiple bank loans.
However, given the stock market crisis, Tesla’s share values have had an important drop. That’s why some people say this is just an attempt to reduce de sale price or a way to wriggle out of negotiations after taking it too far to call it off. It would be the perfect way since he knows that verifying the real amount of spam and fake accounts on the social media platform is pretty much an unreasonable task.
Twitter in Musk’s hands: how bad can it be?
In his social media campaign when Elon Musk announced that negotiations were on hold due to the bots issue, he promised he would fight till the end to make Twitter a safer place for freedom of speech. But exactly what was he talking about?
Musk has been accused on several occasions of using bots for his own benefits on more than one occasion. Being the leader of such an important and volatile company gives Musk the power of changing scenarios by just saying a word. With over 100 million followers on his Twitter account, Tesla’s founder has become an influential figure not just in the technology field but also in politics and the financial world.
Every time Tesla has faced bad circumstances or critics from the public, experts assure us that there’s always a huge amount of bots set up to harass Musk’s opponents or to hide negative allegations from his employees about his well-known toxic workplace. Even he could have found support in bots for the most insane ideas such as it was Dogecoin. So, does Elon Musk wants to put an end to Twitter bots or just want to have the leash?
When users see everyone talking about the same subject it encourages them to involve in the topic and create an opinion, no matter if they know nothing about the subject. Bots are able to shape users’ behavior in many different ways, increasing popularity or starting a fire around someone, hiding facts or spreading rumors and misinformation. It is not just a virtual problem, it affects directly real-world decisions. And powerful people like Musk know it.
Whether Elon Musk is going to change his mind and come back around to acquiring Twitter, with a goal to eliminate all spam and fake accounts, but it is certainly going to be an entertaining show to see the richest man on earth in a court battle with the famous blue social media platform we all know and love…
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