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Elon Musk, Under Financial Pressure, Pushes to Make Money From Twitter – The New York Times

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The billionaire and his advisers have discussed adding paid direct messages, fees to watch videos and other features to the service.
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Mike Isaac and
Mike Isaac reported this story from San Francisco and Ryan Mac from Los Angeles.
Elon Musk, the new owner of Twitter, is throwing everything against the wall to make more money at the social media company.
Since closing his $44 billion acquisition of Twitter last week, Mr. Musk and his advisers have discussed adding paid direct messages — which would let users send private messages to high-profile users — to the service, according to two people with knowledge of the matter and internal documents viewed by The New York Times.
They have also talked about adding “paywalled” videos, which would mean that certain videos could not be viewed unless users paid a fee, these people said. And they have discussed reviving Vine, a onetime short-form video platform, which could attract a younger audience coveted by advertisers.
This week, Mr. Musk moved to make money from Twitter’s “blue check” verification program, a method of making sure users are who they say they are. The billionaire announced that the program, which is currently free, will be rolled into the “Twitter Blue” subscription service, which will offer enhanced features for a monthly $8 fee.
The frenzy of product development underlines the pressure that Mr. Musk, the world’s richest man, is under to deliver immediate results — and returns — on the technology industry’s largest-ever leveraged buyout. To finance his Twitter deal, he loaded the company with $13 billion in debt, putting it on the hook to pay more than $1 billion annually in interest alone.
But last year Twitter had less than $1 billion in cash flow, partly because of a one-time charge, meaning it generated less money than what it now owes its lenders annually. The company was also unprofitable for eight of the last 10 years. So, to make ends meet, Mr. Musk must boost Twitter’s revenue or cut costs — or do both.
Mr. Musk has already ordered job cuts across Twitter. On Wednesday, a Twitter employee posted a link to a “severance calculations” document in a company Slack channel, noting that there was a “master list” that included the number 3,738, according to a copy of the message seen by The Times.
A swift overhaul. Elon Musk has moved quickly to revamp Twitter since he completed his $44 billion buyout of the social media company in October, warning of a bleak financial picture and a need for new products. Here’s a look at some of the changes so far:
Going private. As part of Mr. Musk’s acquisition of Twitter, he is delisting the company’s stock and taking it out of the hands of public shareholders. Making Twitter a private company gives Mr. Musk some advantages, including not having to make quarterly financial disclosures. Private companies are also subject to less regulatory scrutiny.
Layoffs. Just over a week after closing the deal, Mr. Musk eliminated nearly half of Twitter’s work force, or about 3,700 jobs. The layoffs hit many divisions across the company, including the engineering and machine learning units, the teams that manage content moderation, and the sales and advertising departments.
Verification subscriptions. Twitter began charging customers $7.99 a month to receive a coveted verification check mark on their profiles. But the subscription service was paused after some users exploited it to create havoc on the platform by pretending to be high-profile brands and sending disruptive tweets.
Content moderation. Shortly after closing the deal to buy Twitter, Mr. Musk said that the company would form a content moderation council to decide what kinds of posts to keep up and what to take down. But advertisers have paused their spending on Twitter over fears that Mr. Musk will loosen content rules on the platform.
Other possible changes. As Mr. Musk and his advisers look for ways to generate more revenue at the company, they are said to have discussed adding paid direct messages, which would let users send private messages to high-profile users. The company has also filed registration paperwork to pave the way for it to process payments.
If that figure refers to people who could be laid off, and if the number holds, it will amount to about 50 percent of Twitter’s 7,500-person work force. Interns were excluded from the list, according to the copy of the message. Some of Mr. Musk’s advisers held a conference call on Wednesday evening to try to finalize the number of cuts, according to internal memos and calendar entries viewed by The Times.
Mr. Musk is also trying to minimize Twitter’s infrastructure costs. In meetings with engineers, his advisers have proposed saving from $1 million to $3 million in infrastructure costs a day, said three people familiar with the talks. Lieutenants are also looking to make deep cuts to Twitter’s “Redbird” organization, which consists of platform and infrastructure teams, the people said.
Twitter faces difficulties earning advertising revenue under Mr. Musk, who has said he may loosen content rules on the service. On Thursday, General Mills and Audi’s U.S. division said they had paused advertising on Twitter because of concerns about content moderation on the platform.
Mr. Musk and representatives for Twitter did not respond to requests for comment. Bloomberg, The Washington Post, Axios and Jane Wong, an independent researcher, reported some details of the company’s plans earlier.
In an onstage interview at the TED Conference in April, Mr. Musk said owning Twitter “is not a way to make money” and added, “I don’t care about the economics at all.”
Since then, however, the global economy has tipped toward recession, inflation and interest rates have soared and the digital advertising market — which Twitter relies on for revenue — has pulled back. Mr. Musk’s own fortune is tied up largely in shares of his electric automaker, Tesla, whose stock has plummeted.
In an attempt to spin up new lines of business at Twitter, over the past week Mr. Musk and his advisers have dispatched product teams to brainstorm any and all ideas that could quickly bring in money, according to 10 current and former employees and internal documents discussing the matter. Three people who have met with Mr. Musk or his lieutenants said the focus was largely on how to increase revenue.
One product team is working on paid direct messaging, which appears to be focused on Very Important Tweeters, or V.I.T.s, on the network, said the two people with knowledge of the work and according to the internal documents. According to the product mock-ups seen by The Times, users would be able to send private messages to their favorite celebrities for a nominal fee. A fee structure, which had not been set in stone, could be as little as a few dollars per direct message.
In early prototypes, a Twitter user was depicted asking the musician Post Malone about his favorite records. Such paid messages could appear in a special area of the direct message inbox, and the celebrities would have to choose to receive them. Twitter would most likely take a cut of the fees, according to the documents.
The plans for paid direct messaging remain fluid, and there is no guarantee that the product will launch, the people with knowledge of the matter said.
Product teams are also working on “paywalled” videos, an idea similar to offerings from platforms like OnlyFans, which hosts content for creators in the adult content industry. Under this plan, Twitter might ask users to pay a fee to watch a video, splitting the revenue with the creators who post the content, two people familiar with the project said.
Mr. Musk has also shown interest in Vine, the looping video app that was popular among young creators before Twitter shut it down in 2016. He ran a Twitter poll on Sunday asking his followers whether or not he should bring it back, and he has commanded internal teams to examine the code to see if reviving it is possible, two people familiar with the conversations said.
Mr. Musk’s new Twitter Blue subscription service, which will give subscribers the check mark next to their username, is aiming to begin on Nov. 7 in the United States, Canada, Australia and New Zealand, according to internal documents seen by The Times. Subscribers would not need their identities authenticated to get the check mark, the documents suggested.
The documents also noted that there would be “an interim period where the check would be on both Blue subscribers accounts and previously verified users.” Eventually, verified accounts that do not pay for Twitter Blue will lose the check marks. There are more than 423,000 verified accounts on Twitter.
The documents also outlined plans for “government accounts to keep their Verified badge without paying for Blue.” Some features for the subscription service already announced by Mr. Musk, including higher rankings for subscribers’ replies and the ability to upload longer videos, would not begin on Nov. 7, according to the documents. A European rollout was also planned, with the Twitter Blue team having worked to align the product with the European Union’s General Data Protection Regulation privacy law.
The Blue team was told to get the product ready for introduction by next week or face being fired. Esther Crawford, one of the product managers, shared a photo of herself on Wednesday in a sleeping bag and wearing an eye mask on the floor of Twitter’s headquarters in San Francisco.
“When your team is pushing round the clock to make deadlines sometimes you #SleepWhereYouWork,” she tweeted.
Lauren Hirsch, Kate Conger and Tiffany Hsu contributed reporting.
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