Problem
Read the case below and answer the questions;
The bird is freed" tweeted Elon Musk after taking over Twitter on October 27, 2022. The "bird" is, of course, a reference to the famous Twitter logo. Elon Musk is a business magnate, industrial designer, and engineer who found many successful companies, most notably PayPal, Tesla Motors, SpaceX, and Neuralink. The wealthiest person in the world, Musk had been an avid user of Twitter for years while also being one of its most vocal critics.
Twitter was founded by Jack Dorsey and his friends in 2006. The idea of a free microblogging and social networking service that allowed users to send "tweets" of up to 140 characters quickly caught on, and the site soon became one of the most popular social networking platforms on the internet. In 2013, it was one of the ten most-visited websites. In 2017, it doubled the limit to 280 characters. By 2019, the site had 330 million active users. Twitter became a powerful communication tool for businesses, celebrities, news organizations, and ordinary people. People flocked to the platform to stay updated on current events, freely share their thoughts and feelings about the world, and connect with others who have similar interests.
As Twitter grew and the political discussions on the platform got more heated, Twitter started instituting stringent content moderation practices. While a certain amount of moderation is necessary to keep the platform safe and civil, Twitter's moderation policies appeared to be biased that silenced voices coming from one side of the political spectrum. Specifically, Twitter was criticized for disproportionately censoring conservative voices. In some cases, Twitter would delete tweets without any explanation. In other cases, it would shadowban users, which limited the number of people who could see their tweets. The practice of "fact-checking" users that added a warning label to a tweet was also controversial, as it was often done in a way that was seen as partisan. It seemed Twitter had all the power to decide what is true and what is not, and it was not afraid to use that power to silence voices it didn't agree with. The lack of transparency in the content moderation policies did not help either, as it only led to more suspicion and mistrust.
In response to these criticisms, Twitter's then-CEO Jack Dorsey admitted in a 2018 interview with CNN that Twitter employees did share a largely left-leaning bias but he also claimed that their bias did not influence their content moderation policies and practices. The contradictions in the statement did not increase people's confidence in Twitter. However, the user base of the platform continued to grow, its revenues from video ad sales rose, and the company's stock price also increased despite the controversies.
The platform received the most criticism when it permanently banned US President Donald Trump after his alleged role in instigating the Capitol Hill riot. President Trump was one of the most celebrated users of Twitter, and his tweets were often retweeted and liked millions of times. While Twitter had previously put fact-checking labels, the permanent ban was seen as a step too far by many people. Twitter's bias came more into the fore when later that year it (along with Facebook) took extraordinary censorship measures against the magazine, The New York Post which ran an expose on Hunter Biden, the son of President-elect Joe Biden. The double standard in how Twitter treated different users seemed too obvious and difficult to ignore.
Elon Musk who had been both a longtime user and critic of Twitter for years started taking interest in the company's stock earlier this year. He first bought over 9% of Twitter shares in April, making him the largest shareholder of the company. This brought him a seat on the company's board but Elon refused. Instead, he made an offer of $44 billion (or $54.20 per share) to buy the company. Twitter initiated a "poison pill" defense that allowed existing shareholders to buy stocks at discounted rates to dilute Musk's holdings and prevent the takeover. However, it failed and so the company agreed to the price initially offered by Musk. But then Musk said he would not move with the deal until he has proof that bots are only 5% of the spam accounts on the platform. In the ensuing weeks and months, more drama ensued with lots of twists and turns until October 27 when Musk's takeover of Twitter became official.
Immediately after taking over, Musk fired the company's current CEO, Parag Agrawal and the CFO, Ned Segal. He also fired Vijaya Gadde, Twitter's top legal and policy executive, who had been criticized by Musk for blocking links to the New York Post's coverage of Hunter Biden's laptop; She was also the person who had made the decision to permanently ban then-President Donald Trump. Bloomberg News reported that Musk was expected to reverse lifetime bans on past users of the social media platform (although Trump said he had no interest in coming back to the platform).
At a public appearance this week, Elon Musk said Twitter Inc. could ultimately become the most valuable company in the world. But how will this be achieved? Despite having a large user base, Twitter historically had posted losses every year and only turned profitable in 2017. In order to increase its revenue, it will have to grow its user base even further and also find new revenue streams. There is fear that Musk's staunch defense of free speech could enable a free reign of extremist voices and an increase of abuse on the platform, which would in turn drive advertisers away. Musk posted a lengthy message to Twitter's advertisers, writing that he had no intention of turning the social media platform into a "free-for-all hellscape." "The reason I acquired Twitter is because it is important to the future of civilization to have a common digital town square, where a wide range of beliefs can be debated in a healthy manner, without resorting to violence," Musk said.
What will happen to Twitter under Musk's leadership remains to be seen. On one hand Musk being a proponent of free speech could mean that the platform will reduce the extent of bias and censorship that the platform suffered from. On the other hand, the fact that a large part of funds used in the purchase of Twitter came from Musk's co-investors in Saudi Arabia and China, raises fears in many that the platform may not exactly become the bastion of free speech that Musk is promising. Musk's vision for Twitter is still not clear. He had earlier spoken in admiration of the Chinese social media app WeChat that is a one-stop platform for a wide array of services including social media, messaging, e-commerce, and mobile payments. Will Twitter become a WeChat-like platform under Musk's leadership? Only time will tell.
Task
A. Perform a detailed external environment analysis of the company.
B. Give detailed strategic recommendations to the company based on all the good and bad issues mentioned in the case.