More pre-Musk Twitter 1.0 execs leave the building

A pair of leadership departures at Twitter this week have left the company with few, if any, remaining executives that predate Elon Musk's acquisition of the platform. Behnam Rezaei, former head of product and engineering, announced his departure in a tweet yesterday, while senior director of HR Katie Marcotte reportedly …

[Steve Button]

And yet...

... somehow, it keeps ticking over, and they even keep making improvements (like adding a view count).

Also, the "exodus" of users doesn't seem to be actually happening, apart from a few high profile tantrums. Many have experimented with Mastodon, but kept their Twitter accounts, and then keep coming back as it's not (yet) all that interesting over there. It's still the most "interesting" platform for me, when I have a couple of minutes to spare. Also, I bet many journalists are salivating jealously over the Twitter Files (but quietly, and not telling anyone?).

But perhaps that's not a very fashionable view to have?

[James 51]

Re: And yet...

When a company that is suppose to have deep pockets backed by the (former?) richest man in the world is being evicted from offices for a $200,000 dollar debt, the writing is not only on the wall, the grave stone is being chiselled as we speak.

[Andy Non]

Re: And yet...

It won't impress suppliers either... want some new servers? Payment in advance please Mr Twit, no credit for you.

[aerogems]

Re: And yet...

They're also facing possible eviction up in Seattle, are refusing to pay for some chartered flights, and are attempting to stiff a bunch of suppliers AFTER goods/services have been rendered. I expect it's only a matter of time, if it hasn't already, before it starts impacting Tesla and SpaceX since the top person is the same.

If I supply Tesla with some do-dad needed to build their cars, I'm going to wonder if/when they're going to try to stiff me. Same as if I'm the loan officer at a bank and Twitler walks into my office wanting a loan to improve equipment or something, I might well require more collateral, higher interest, or both, or just decide it's not worth the risk to loan him money in the first place. I'm sure there's already a couple of vacancies in the banks that loaned Twitler money to buy Twitter.

[Steve Button]

Re: And yet...

Meh. $200k is pretty small fry, and I don't think the company has "deep pockets". Elon has openly admitted that it might well go bankrupt unless it can make some money. Pretty standard practice to stop paying rent, and dispute payment and then come to some agreement. The big banks even do this all the time, but it doesn't get the same press.

So, yeah in a way you are right and perhaps the writing is on the wall. Honestly Twitter was never a money making venture, was it? Even from the beginning everyone was speculating how it could ever make money. It was held up by investors. But by cutting costs, to the bone, he's got the best chance of actually making money out of it.

[Elongated Muskrat]

Re: And yet...

Defaulting on rent payments is not standard practice anywhere I know of (and incurs statutory interest alongside whatever contract terms apply on the tenancy). It will affect the company's credit rating, in the same way as defaulting on your mortgage repayments isn't going to improve your personal credit score.

Getting your company evicted from and office building (which you are going to have spent significant money on fitting out, with things like meeting rooms and kitchens, and offices to make them something more than an empty volume of space) is certainly not "standard practice" for a business that is a going concern.

If Musk doesn't want Twitter, why run it into the ground and bankruptcy? That's both more expensive and reputationally damaging than just liquidating it. Unless Musk does actually want to keep it as a going concern, but he is both incompetent, and possibly illiquid himself.

[Elongated Muskrat]

Re: And yet...

Don't know why someone downvoted you for that, it looks like a sound analysis to me.

The whole "give the debt to the company I'm buying" thing does sound pretty dodgy, and I've heard about this happening before, as part of "vulture capitalism" (no disrespect to El Reg here).

Presumably, in order to get that debt to move onto the company's books in the first place, one has to either have the money, or have collateral to get a loan. This leaves me wondering if Musk would essentially forfeit the assets used to secure that loan if the company went bankrupt.

I mean, anyone handing out an unsecured loan for billions of dollars to a man-child like Musk would need their head examined; probably as a research project for future generations, frozen and sliced thinly under a microscope.

[Flocke Kroes]

Re: And yet... reality has difficulty entering your head

Honestly Twitter was never a money making venture, was it?

If you had made the slightest effort to find out you would have found Twitter made profits in 2018 and 2019. 2020 was a significant loss but 2021 was close to break even. A one-off fine of $750M ate that year's profits and a little more. So beyond all possible doubt you are either making stuff up without checking of being deliberately dishonest.

I have worked for a company not paying its bills before and got burned. Another employer started on a similar path so I got out fast. Colleagues who waited got burned. The time to leave Twitter was last year. This is not some opinion I pulled out of my backside. It is supported by evidence: Musk promised three months severance pay. If you believed that then perhaps you believe things like Full Self Driving will be ready real soon now or a P/E ratio of 35 is a good investment (IF performance remained constant it would take 35 years to recover just the purchase price of Tesla shares). At least it has dropped down from over 1000 at the start of 2021. Poor execution at Tesla is responsible for some of that drop but much of the market cap comes from Musk's name. Since signing the Twitter purchase agreement Musk has been going full hardcore at destroying the value of his name. He has already gone way beyond Gerald Ratner and shows no signs of slowing down.

[fromxyzzy]

Re: And yet...

They made money on it by selling it to this moron. That's why they held him to his 'joke' bid and forced him to pay up.

There is no way to make twitter profitable and he handed them an escape, and gets to be the one holding the bag.

[Chris Gray 1]

Re: And yet...

As the article says, it is advertisers that are the source of Twitter's money, not directly the users. Same for all advertising-based outfits.

I recall comments from just before/after the purchase suggesting that Musk was buying Twitter just so he could shut it down. He may have reconsidered after he was forced to follow through on the purchase. But, with what is going on now, it looks like the plan of killing off Twitter is going ahead.

Now if only someone would do the same for Meta!

[Steve Button]

Re: And yet...

The advertisers will keep coming as long as there are eyeballs on the site (apart from the so-called progressive ones). Not much point in advertising without users, who are afterall The Product.

I think that "someone" doing the same for Meta is called Mark Zuckerburg.

[myithingwontcharge]

Re: And yet...

"The advertisers will keep coming as long as there are eyeballs on the site"

Thats not really how advertising works. Want to sell sugar water to the public? Then you need to make it look classy and fun. There's very little of that left in Twitters image and now many negative associations that didn't exist before, so advertising your product on the site risks doing more harm than good to many brands. Ironically, the more users remain, the worse the damage to a brand could be. Brands don't like that kind of risk.

[Anonymous Coward]

Re: Advertisers

If the current state of UK TV advertising is anything to go by, the only ones we'd see are for Gambling Sites (ten a penny) , Funeral Plans and Subscription based alarm systems and female vagina/sanitary products

The alarm company must be spending an absolute fortune given how frequently the ads appear.That's where all your lovely subscription money goes...

Note: Not on Twitter and positively hate ads of all sorts but I've been laid up over Crimble and the New Year with a stinking cold and sometimes I could not be half arsed to press the mute button the remote.

I vow to never - take out an over 50's life insurance - Sign up for any of the gambling sites - buy a subscription-based home alarm service - buy female vaginal/sanitary products or use Deliveroo/Just Eat or sign up for Paramount-Plus

Why does no one just line all the heads of the ad agencies up against the wall and shoot them? The world would be a far-far-far better place if it were to happen.

[Steve Button]

Re: And yet...

That's kind of how free markets work. A certain number of advertisers will decide to stay away, because of brand alignment as you say. Then other advertisers who want to hawk a product will come in at a cheaper price. Then the price for ads might go back up. I don't think Twitter is actually THAT toxic (unless you read The Reg or the BBC of course). ;-)

Love and hugs.

[Andy 73]

Re: And yet...

The number of users is immaterial, since the majority don't actually bring any money into the company. The big question is whether there has been an exodus of advertisers.

If the repetition of the same single advert time and time again in my feed is anything to go by, then they may be in trouble.

Whilst new features like view count prove some of the apocalyptic predictions wrong, these are not things that will either attract new users, or give existing users much reason to give the company money. Musk needs to show that he has an original idea for changing the business model. That may take a little longer.

[Flocke Kroes]

Re: And yet...

Musk had a clear idea of where he wanted to go since before he was kicked out of Paypal. He wants to combine an online bank with a social media site with advert/purchase buttons. The idea is the social media brings purchasers who click on things. The clicks cause payments from the purchaser's Bank of Twitter account to the vendor and the vendor sends goods to the purchaser. Twitter gets a commission for the sale. As ideas go it has potential. If Twitter only gets paid for sales it is in their best interest to place ads only if they can lead to a sale rather than simply to drain the vendor's advertising budget.

The tricky bit is that this is never going to work with the staff he has left. It might have worked if he had started small, got the software working then bought Twitter for the user base. Starting with $1B/year interest payments will sink the project no matter what.

My personal theory is that Twitter is run by the second rank: a bunch of lawyers seeking to convert Musk's Tesla holdings into legal defence fees.

[Andy 73]

Re: And yet...

The trouble is, Musk's clear idea is the sort of simplistic stuff a first year student would come up with - bang two big concepts together and call it a vision. Granted, it is his party trick, but you need more than that to give users a reason to pick a new online service amongst a sea of competitors. Facebook has already been down this path and not come out well.

In addition, if your plan is to launch a financial service, it's probably not a good idea to wind up regulators with non payment shenanigans, or to leave your users nervous of your every move.

[DS999]

Re: And yet...

... somehow, it keeps ticking over, and they even keep making improvements (like adding a view count).

The view count would have obviously been tracked all along, the only change they would need would be to make that publicly visible. With a new decision maker comes different opinions on what constitutes "improvement", I guess Musk thinks making that public is good. Meanwhile other social networks are considering hiding stuff currently public such as number of "likes" or "views", due to younger people in particular placing way too much self-esteem into that figure when it can be seen by others.

Laying off or inducing to quit most of the competent staff wouldn't hurt any company right away, so just because it "keeps ticking over" doesn't mean those people weren't necessary for its continued operation. That's what you find out 3, 6 or 12 months down the road when something unexpected (or more likely several unexpected somethings) happens at the wrong time, and there isn't anybody left who has seen it before or even knows where to look to find the root cause of the problem. Then a 15 minute outage can turn into 15 hours, and a 5 hour outage into 5 days.

[Anonymous Coward]

Re: And yet...

The site has had a few wobbles recently. Earlier this week in Oz/NZ it was having issues. The page just either didn't come up, came up and just showed spinners or had "something gone wrong" messages.

After seeing problems, I had a hunt around to see if it was just me but found multiple reports such as this one:

https://www.gizmodo.com.au/2023/01/twitter-down-australia/

[chivo243]

I got this song stuck in my head

by afroman... Perhaps they were time travelers?

[Anonymous Coward]

Honestly who cares

Twitter

What a waste of time

[Anonymous Coward]

Musk not only thinks he’s above the system

He thinks he IS the system.

[Potemkine!]

Twitter is relaxing its policy for cause-based ads, which push people to take action on political or social issues. "We also plan to expand the political advertising we permit in the coming weeks," Twitter said.

Putin and the Far Right like that.

Twatter: to boldly go where dignity has never gone before.

[Neil Barnes]

Is there still time to buy some peanuts?

I don't like popcorn.

[Fruit and Nutcase]

NT 4

New Twitter 4.0