The Right White Knight
Microsoft should buy Twitter
The first article I ever wrote professionally was about Twitter.¹ It was the service’s first year of existence and, as silly as it seemed at the time, I was certain it was on to something. It was. And 16 years later, it still is.
But the history of Twitter has been one of shitshows. One after another. Some technical. Some social. Some financial. Clown cars into goldmines and all that. No company has been more turbulent. And that continues to this day, nearly nine years — nine! — after going public — public! To the point where, they’re now wide open to one person — albeit the world’s wealthiest — potentially taking the company over in hostile fashion.
If Twitter put the ‘T’ in WTF, this is the most WTF moment yet.
But there is one obvious way out of all this. A way to step off the shitshow carousel. A white knight. But not the bank or private equity variety that are being thrown around right now. A company. A big one. Microsoft.
This sounds crazy. But we need crazy to combat crazy. And actually, it’s not that crazy when you think about it, in the context of crazy.
My bet is still that Elon Musk does not buy Twitter. There’s too much insanity around his bid and I believe he sort of stumbled into making it.² I’ve had three separate posts written about the situation and I had to go back and re-write them each time because things remain so wild and fluid. This is the fourth such attempt at the post. Essentially, following the guidance of Occam’s razor — as I often like to do — it sure feels like the following happened:
1) Elon Musk decided he wanted to buy some shares of Twitter. “Some” is relative here. “Some” to you or me might be a few dozen shares. To him, “some” is 9.2% of the company. As a power user, he clearly loves the service. And he also clearly commands it like no other. So why not buy big into something you love? Especially if it seems undervalued to its relevance in society? And extra especially if it in some way fucks with your hated foe: the SEC? But really, at the end of the day, why did Elon buy 9.2% of Twitter? Because he could.2) Realizing he could — and potentially a lot more, Twitter’s board swooped in. They needed a way to control the situation and that control was a board seat. In exchange for a promise to keep his ownership of the company to under 15% — already far more than any other shareholder, or even entity holds. Elon agreed and the wheels were put in motion…3) With the word of Elon’s big Twitter stock purchase starting to trickle out into the press, Twitter decided to pre-announce the board appointment. The message: we’re on top of this and aligned with Elon. This will be a good thing! Not to worry.4) Time to worry. In the last stages to finalize the board appointment, it became clear to both sides that there was a severe disconnect between what Elon wanted to tweet publicly about Twitter — similar to what he does with Tesla — and what the board would be okay with given his new role as a fiduciary. Elon took this as the company trying to muzzle him — not incorrectly, of course — and he gets pissed. The board deal is off. Elon is now free to buy as many shares of Twitter as he’d like.5) And he decides to try to do just that. As in, all of them. Or most of them, at least. He makes his offer to the company’s board — take it or leave it. They’re not going to take it, so the next step is an offer directly to the Twitter shareholders if — and this is important — if, he can actually secure the funds. History doesn’t repeat, but it often rhymes and all that.
Twitter tried to control the chaos and it exploded in their hands. Still, better before rather than when Elon is on the board, I suppose. Always keep shitshows informal rather than formal. “What can we do?” versus “What did we do?” Still, poor Twitter. The little bird now must swallow poison pills.
And yet. They did this to themselves! They had nearly a decade to prove their worth as a public company. The public hasn’t bought it — quite literally. So now Elon is trying to. And even if he doesn’t execute the deal, Twitter will now be left more vulnerable as a result. Morale is plummeting. Someone else will eventually swoop in…
And actually, Musk is right in one regard with all of this: Twitter now is too important. And if it can’t survive as a public company, it needs a protector. While we can all say the right things about open source and decentralization, the reality in 2022 America is that the protector needs to be an entity that has the pockets to protect it. And again, that’s Microsoft.
While perhaps not the most obvious would-be acquirer, it’s the most obvious one that can actually potentially pull off a deal. Somewhat inexplicably, the $2T company seems outside the regulatory bounds in which the other tech giants find themselves. It would take a ton of capital. Well over $50B to counter Musk and seal the deal. And Microsoft is already in the midst of another $60B+ deal. Still, they can make it happen.
And Microsoft has proven themselves good stewards of giant buys. GitHub. Mojang. LinkedIn. The latter might make the bid more complicated as it was once lumped into “social networking”. But obviously Twitter is a different beast. And Microsoft famously/infamously wanted another, newer entrant: TikTok. To the point where they were willing to absurdly and problematically kiss Donald Trump’s ring. That deal didn’t happen. But this could.
Sure, Twitter isn’t the cool kid of social anymore like TikTok is now. But again, it’s more important and potentially very strategic for Microsoft. It wouldn’t be easy, but imagine porting the entire network onto Azure as a new marquee client. And how about piping the (public) content right into Bing. It could reinvigorate the second search engine overnight. Hell, you could even open source the algorithm on GitHub if you wanted to, I guess.
Twitter has long failed to live up to Facebook and the like when it comes to monetization, Microsoft can help with this. And counter their Seattle brethren Amazon’s rise in ads alongside Google and Facebook.
I’m really talking myself into this!
Also, while this isn’t a good enough reason to do the deal, it would buy immeasurable goodwill amongst just about everyone in the tech community not named Elon Musk. For all their talk about not caring what Silicon Valley thinks, Microsoft craves that Bay Area mineral. With Twitter, they’d now have not one, but two massive San Francisco imprints (alongside LinkedIn).
So let’s do this, Microsoft. Strap on that helmet, mount that steed, and be the white knight in this situation. End this madness. Buy Twitter to save Twitter.
¹ Sadly, no longer online!
² I happened to be there in the audience in Vancouver during Elon’s TED interview last week. It was a fascinating chat for a number of reasons. But on the Twitter front, it was pretty clear that Elon had no real plan and no idea about what to do with the network. He gave some soundbites about free speech — still pissed about his attempted muzzling, of course — but his thoughts were shallow at best and misguided at worst.
