Twitter Pauses New $8 Checkmark Offering as Musk Warns of Possible Bankruptcy at the App

It’s Friday, so let’s keep the Elon Musk/Twitter updates to a minimum, shall we?

Okay. There’s, like, a lot.

Verification Chaos

As expected, Elon’s plan to sell blue checkmarks, which no longer signify verification (as there is no form of ID checking in the updated process), has led to a raft of people impersonating prominent identities and brands in the app.

Twitter verified accounts  Twitter Pauses New $8 Checkmark Offering as Musk Warns of Possible Bankruptcy at the App bG9jYWw6Ly8vZGl2ZWltYWdlL2dyYXlfdGljazIucG5n

Which is what everyone said would happen, yet Elon pushed ahead with it anyway, explaining that it would be ‘the great leveler’, in that it would enable everyone to get a blue checkmark, not just celebrities – even though selling the tiny profile graphic negates the whole purpose of Twitter’s verification system.

The impersonation issue has gotten so bad, so fast, that Twitter has now paused the new $8 Twitter Blue offering, in order to re-assess the process.

Twitter’s also now finally decided to go ahead with its new, extra gray tick for ‘official’ profiles that Twitter thinks need some sort of indicator that they are the actual, legit profile of this specific entity.

Twitter Official ticks  Twitter Pauses New $8 Checkmark Offering as Musk Warns of Possible Bankruptcy at the App bG9jYWw6Ly8vZGl2ZWltYWdlL2dyYXlfdGljay5wbmc

Twitter announced this on Tuesday, then Elon ‘killed it’ just hours after launch, then the gray markers started appearing again, then Twitter announced that they were not rolling them out, then, a day later, Twitter said that they actually would be rolling them out again.

And now, they’re apparently in production, and as you can see above, the gray tick not only appears on user profiles, but also on their tweets in-stream, giving you that cool, double tick credibility.   

In addition to this, Musk has also laid out new rules for parody accounts:

Going forward, accounts engaged in parody must include “parody” in their name, not just in bio

— Elon Musk (@elonmusk) November 11, 2022

Yet, at the same time, Twitter has also stopped currently verified users from changing their username, which was implemented to stop people from making fun of Elon specifically earlier in the week – so some people who are running parody accounts now can’t list such as per Elon’s instructions, putting their profiles at risk.

Honestly, the vectors for deception and scams have increased drastically with this new ‘checkmark-for-sale’ process, and it’s evident from just the first few days that this is going to be a problem, which is going to lead to many people falling for scams.

But as we’ve previously noted, Musk is only worried about how much money Twitter will get, and with each account paying $8 to run each scam, he seems relatively happy with the process thus far.

Needs some tweaks, but overall proceeding well

— Elon Musk (@elonmusk) November 11, 2022

To reiterate, the median cost of reported social media scams in the US last year was $468, so scammers are essentially risking an $8 fine for an opportunity to make 58x that, on average.

If you needed evidence that this is a cash grab for Elon, who’s desperately trying to claw back money, then this is it.

But, of course, Elon’s blaming issues with the process on the media – which he’ll keep doing when the number of paying subscribers fails to hit his goals.

As Twitter pursues the goal of elevating citizen journalism, media elite will try everything to stop that from happening

— Elon Musk (@elonmusk) November 11, 2022

Which is going to happen.

If Elon eventually gets a million people signed up for his $8 blue checkmark offering, that would be huge, and if he got two million, that would be amazing. Yet, that would still only equate to less than 1% of Twitter’s overall user base, and Musk needs to get all the real humans paying in order for his broader bot-battling, revenue-raising plan to work.

It won’t, but again, it certainly won’t be Elon’s fault.

Also worth noting here – Twitter originally added the blue checkmarks after being sued by a former MLB player over impersonation, with a scammer using his likeness to dupe people in the app. You’d have to imagine that similar lawsuits will definitely be on the cards after this latest chaos.

Cash Flow Challenges

So why is Elon so desperate to push ahead with half-baked plans so quickly?

Because he needs the money.

At an all-staff meeting this week, Musk told Twitter’s remaining employees that they can no longer work from home, which had been a long-standing policy at the company, while he also informed them that the business may well go bankrupt soon.

As per Musk:

“We just definitely need to bring in more cash than we spend. If we don’t do that and there’s a massive negative cash flow then bankruptcy is not out of the question.”

Twitter was reportedly losing $4 million per day when Musk took over, which is why he’s moved so quickly on staff cuts, and on pushing out something – anything – to make more money. But the suggestion that Twitter could actually collapse has spooked many banks and investment funds that have backed the Musk takeover deal, with some now looking to distance themselves from the business as fast as they can.

Some have also questioned whether Musk has an ulterior motive in tanking the business. Which seems unlikely, but that’s how bad the situation has become, and with all of Twitter’s former senior leadership team now exiting the company (Musk lost four more execs this week, though he did convince one to stay), there’s little faith that Musk will be able to get the platform back on track, and making real money any time soon.

But then again, a lot of people seem to be signing up for the new $8 checkmark option. Or they were, till Twitter cut it off.

There’s also a question on that front as to how sustainable any income will be from that process, as Musk needs people to keep paying, every month, to keep bringing in cash.

That seems unlikely – but then again, if scammers can keep making money…

The New YouTube?

In the aforementioned all-staff meeting this week, Musk also noted his plans to introduce a new revenue share program for video creators in the app, much like YouTube, but with a better revenue share percentage, in order to lure creators in.

The only hitch is that Musk also showed that he has no idea about the competitive landscape in this respect, nor how such a system might work.

As Musk told Twitter employees:

“Let’s just get a bunch of content creators that we think are cool on YouTube and say, “Hey, would you consider putting your content on Twitter, and we’ll pay you 10 percent more than YouTube and see how it goes?” Let’s do that. Okay, great. So you will do that? […] I’m a big believer in having just a maniacal sense of urgency. So if you can do it after this meeting, I would do it after this meeting. Just a maniacal sense of urgency. Like, if you want to get stuff done, maniacal sense of urgency. Just go “aah!” Hardcore!”

The problem is, hosting long-form video at scale is costly, and Musk has also tasked Twitter staff with reducing infrastructure costs by $1 billion.

As a reminder, Twitter cut its separate Periscope app last year, because it was too costly to run, and when you factor all of these elements together, it’s clearly not as simple as just going ‘hardcore’ and flipping a switch on a new video creator monetization program, especially one which, if they do offer a better revenue split, would likely become cash negative for the app.

Along a similar line:

Not sure how happy I’d feel, as an investment partner, to find out that my new CEO doesn’t know that much about the industry, or even the company itself.

For reference, Twitter acquired messaging app Quill last December.

Look, all of this seems chaotic and messy, and ridiculous for the most part. But then again, according to Elon:

Is there some way that he can bring everything back together?

I can’t see it, but I also accept that maybe Elon, who’s driven success at his other companies, has an entirely different perspective and vision here.

And as various Musk supporters have pointedly informed me in their comments on my posts, I’m not a billionaire.

Definitely seems like it’ll need some next-level, Mars colonization thinking to right the ship.

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