A new Twitter is a threat to Meta, not to democracy

Progressives and their media allies have been fretting loudly that Tesla and SpaceX CEO Elon Musk’s acquisition of Twitter might enable more free speech online. They shouldn’t be afraid, at least not if their ideas can compete legitimately with those of traditional liberals, conservatives and libertarians. Who should be afraid of a Musk-led Twitter, however, is Meta — a company that Musk says gives him “the willies.” A Musk-led Twitter ultimately could attract more users and move into the metaverse more seamlessly than Meta — putting the Mark Zuckerberg-led social media giant under greater competitive pressure than ever before.

Twitter has problems, but these must look like opportunities to Musk. The site ranks 15th among social media outlets globally in terms of number of users, and its messaging is dominated by left-leaning elites: Just 10 percent of Twitter users produce 92 percent of all tweets by U.S. adults, and 69 percent of these highly prolific users align with Democrats.

Its issues don’t stop there — Twitter also has a user trust problem. In 2020, users ranked its ability to protect their privacy 7th among all social media sites. But Meta’s trust problem is worse: Users ranked its Facebook product two places below Twitter.

Musk can fix Twitter’s audience problem by increasing trust. He has said that he intends to treat people equally and to open Twitter’s algorithms — the computer code that prioritizes what users see and monitors tweets for violations of Twitter’s terms of service — so that people see how decisions are made. Openness also can let users see how the new Twitter protects privacy: Privacy is the number one concern that holds people back from engaging on social media.

Opening Twitter’s algorithms also could allow entrepreneurs to create alternative prioritization systems on the platform and compete for users accordingly. With such competition, a Twitter user might choose to see content suggested by someone that caters to conservatives, and then switch to see content that caters to journalists or to millennials. Meanwhile, those who love today’s Twitter could continue using it.

Economists call this strategy “Hotelling competition” in tribute to American mathematician Harold Hotelling, who observed that businesses sometimes compete by locating their products in close proximity to particular types of customers. A market for algorithms on Twitter would let the site occupy all of the spaces where users’ interests cluster and allow its products to evolve as customer preferences change.

Enabling competition between algorithms leverages network effects. The competition could attract diverse content providers to satisfy the demand for a broad array of information. Journalists frustrated with the shackles imposed on them by overly biased news outlets could find new audiences on an open Twitter — as could academics, pundits and others seeking viewers.

Musk also could leverage cryptocurrencies to create a reliable and inexpensive payment system that allows users to choose financial arrangements based in part on their privacy preferences; content providers to contract directly with readers and algorithm developers; and a host of other arrangements including unobtrusive, targeted advertising.

It appears some people are anticipating that Musk will move in this direction. Dogecoin, a cryptocurrency that interests Musk, jumped 27 percent with the news of his Twitter purchase. A blockchain-based business model for Twitter could allow content producers to protect their property and find creative ways to sell access to it.

Such a business model would present challenges for Meta. Its primary platforms — Facebook and Instagram — are built for advertisers and rely upon users posting personal photos and notes and scrolling through feeds. Meta also remains bogged down by the legacy form of content moderation that has given Twitter trouble. As the Facebook Oversight Board takes its sweet time litigating high-profile censorship cases, Twitter could leap ahead by scrapping the current content regime altogether in favor of a more futuristic model.  

This brings us to the metaverse challenge. The metaverse is emerging with a variety of entertainment, cultural and business options. Successful metaverse platforms are leveraging cryptocurrencies and embracing openness so users can create their own businesses and customize their spaces. That is not how Facebook and Instagram work. But with Musk at the helm, it is how an open Twitter could work.

Mark Jamison is a nonresident senior fellow at the American Enterprise Institute, where he researches antitrust issues, digital privacy and internet regulation. Follow him on Twitter @drj_policy.