Comment: Here’s what Elon Musk buying Twitter tells us about the economy

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LAUSANNE, Switzerland: The richest man in the world is not known for his austerity. The companies founded or run by Elon Musk are “moonshots”: SpaceX, The Boring Company, Neuralink, Starlink, OpenAI and, of course, Tesla are all based on lofty ideas bordering on madness.

Big science projects always require big funding. If Telsa hadn’t received a $465 million federal loan from the Barack Obama administration’s Recovery Act of 2009, we wouldn’t have the Model S today. The electric vehicle company would have long since ceased to exist as it was then close to bankruptcy after spending too much money.

So it’s interesting to see Musk going in the opposite direction with his plans for Twitter. The final hiccup is that he will put the deal on hold, pending an investigation into the number of fake accounts on the platform.

Such diligence came surprisingly late, considering he bought it for the astonishing sum of US$44 billion in April. After all, he’s not looking to revolutionize social media as we know it – he wants to turn it into a money-making machine.

A NEW PLAYBOOK FOR TWITTER

In his presentation to investors, Musk offered to diversify Twitter’s revenue by relying solely on ads. This should come as no surprise considering he was a founding member of PayPal.

Twitter, for all the influencers it attracts, never helps creators monetize their content. Musk now wants Twitter to be great at e-commerce — from hosting livestreams to collecting tips through micropayments.

New features will also be available only to subscribers, and corporate and government accounts can expect to pay fees to stay active. Data licensing will become possible for third parties.

To do all this without exploding the workforce, the current workforce will be reduced before hiring resumes. The number one priority is to free up cash to pay down the debt needed for recovery.

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