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Musk's ideas for increasing Twitter profits could involve monetizing your tweets

Musk also says he wants to increase celebrity usage of Twitter as if that's anything anyone needs more of in their lives.
By
April 29, 2022
Twitter stock photos 14
Edgar Cervantes / Android Authority
TL;DR
  • A report details Elon Musk’s alleged ideas for increasing Twitter profits.
  • Monetizing tweets, increasing celebrity interaction, and slashing high-level salaries are some of the ideas.
  • Musk allegedly gave these ideas to banks in order to secure billions in funding to purchase Twitter.

The tech world was rocked earlier this week when Twitter’s board officially agreed to sell the social network to billionaire Elon Musk. To secure the nearly $45 billion Musk needed to complete the sale, he went to banks for large loans. The loan agreements asked Musk how he intends to pay them back through Twitter’s profits, which are not-so-secretly relatively low.

See also: How to delete your Twitter account

According to Reuters, three sources with knowledge of these loan agreements have divulged some of Musk’s plans to get Twitter to earn more cash. When we use the word “plans,” understand that we’re not discussing ironclad commitments. These are merely the ideas Musk told the banks to make them more comfortable loaning him billions of dollars.

Here’s what we learned:

Elon Musk’s alleged ideas for increasing Twitter profits

  • One way to increase profits is to cut costs. Musk has tweeted in the past that once Twitter goes private, the six-figure salaries of Twitter’s board members will no longer be necessary, which will represent millions saved.
  • Elsewhere, Twitter’s stock-based compensation for 2021 increased by 30%. With the company going private, that number will drop significantly over time.
  • Twitter’s gross margin — the difference between revenue and cost of goods sold, divided by revenue — is quite low, especially when compared to Meta (formerly Facebook). This means there are ways to slash costs and thus raise Twitter profits.
  • One of those cost-cutting measures will likely involve job cuts, according to Bloomberg sources.
  • One of the more interesting ideas is monetizing high-profile tweets. This could involve charging third-party media sites (such as us here at Android Authority) a fee for embedding or quoting high-value tweets on pages.
  • Musk has also mentioned encouraging celebrities to use Twitter more in an effort to increase Twitter’s social mindshare.
  • In a deleted tweet, Musk suggested making drastic changes to Twitter’s premium subscription service Blue. This would involve cutting the cost, allowing users to pay in cryptocurrency, and banning advertising.
  • In another deleted tweet, Musk suggested he wanted to reduce reliance on advertising for Twitter’s revenue.

Musk also allegedly has plans to replace Twitter’s current CEO, Parag Agrawal. Agrawal took over in late 2021 after the exit of Twitter’s co-founder Jack Dorsey from the role. It’s expected that Agrawal will remain at his post until Twitter’s sale is completed. There are no hints of who would take over yet.