Will this deal be the one that breaks Elon Musk? He is a risk taker who has proved to be a good thing in many ways. Businesses such as Tesla, SpaceX and Starlink would have either failed or failed to launch successfully without him.
However, much of his business is also at risk, often because of Musk’s moves. Tesla sales, for example, appeared to be falling off a cliff when Musk first announced his desire to acquire Twitter and make changes that disagreed with Tesla buyers. This action demonstrated a relatively strong correlation between Musk’s behavior, good or bad, and the success of those businesses.
The Twitter acquisition is going to get ugly. It was already in operational trouble when Musk launched his hostile takeover, which caused further damage to the company. Now he is paying full price for something that was not only damaged, initially, but was further damaged by the first unsuccessful attempt.
Let’s talk about the good and the bad (lots of bad) with this Musk/Twitter deal. On one hand, it could have saved Twitter. However, cascading failure is more likely to start across all of Musk’s firms.
We’ll close out with our product of the week, a new discrete graphics card from Intel, the Arc A770 Limited Edition, that promises to shake up the graphics card market.
Thanks to some comments on “Dancing with the Stars” this month, I was thinking about the “Bridgeton” TV series this week. It is a light drama that revolves around the Old English matchmaking system.
In that framework, Musk would be the nobility, who decided to marry the daughter of another aristocrat who was in financial trouble, regardless of the wishes of the other nobility or the daughter. Musk then uses threats to do even more harm to his potential in-laws, forcing them to agree to the union. He then changes his mind and spoils the family, especially his potential bride, to such an extent that no one else will marry him.
The disgraced family takes him to task in front of the Queen, who appears to be on the side of the bride’s family, and Musk then decides that he will go through with the wedding. The queen is happy, and the bride’s family is happy, but the bride now facing marriage with a man who does not know her has clearly decided that he does not want her, and possibly disrespectful to her. Will happen.
Think of Twitter’s rank-and-file employees as bridesmaids. He is vilified by his potential new CEO, has no real say in the acquisition, and is likely to leave the company or focus on making Musk’s time a living nightmare.
There is no doubt in my mind that Musk is aware of the problem, which means he would be tempted to cut too deeply. But it looks like he plans to replace the late workers with automated technology, as his focus is on finding someone who can code for them to run the place.
While not a bad idea, the technology he needs doesn’t yet exist, which means he won’t be able to backfill in time, making it more likely that Twitter could collapse due to inadequate staffing.
In short, a Bridgeton-like ending, where both parties discover they love each other and live happily ever after, is unlikely.
Musk’s other problems
Musk has little spread across his companies, each of which must receive the full attention of his CEO. In fact, he is more of an operational chairman of the board, in that he delegates the operations of his firms and leads, when needed, or interest of him.
Twitter lives off ad revenue. In fact, it is a marketing construct. But Musk, while an expert in opinion manipulation, has shown no aptitude in marketing, so a business that relies on advertising revenue to survive is far from his skill set.
All of Musk’s other high-profile companies make money by selling products or, in the case of Starlink, services. Advertising revenue-dependent companies are a very different animal because the people you serve are the product of the firm, while the customers are the advertisers who want access to them.
Advertisers typically don’t want their brands to be associated with activities they don’t want to be associated with, but this is the business basis for the kind of moderation that companies like Twitter and Facebook use. They want dispute-related revenue, but they don’t want disputes that damage their brand or the brands of the firms they advertise with.
Musk’s plan to reopen Twitter to people who were banned as a result of violating Twitter’s rules would create a problem for advertisers and could sharply reduce Twitter’s associated revenue.
Cascading failure probability
Musk primarily exists under the image that, although he does crazy things, he is very successful and incredibly lucky, making it unwise to bet against him.
It’s problematic if Twitter fails because it’s a high-profile company, and the nature of this acquisition effort has already demonstrated that Musk is anything but infallible.
Should it fail, Musk’s reputation for success would take a significant hit, undermining his ability to pursue venture capital, and potentially hurting the brands of the firms he currently oversees.
Instead of giving Musk a pass, the media and individual investors will see Musk differently than the successful leader he and his people have worked so hard to build.
Also, Tesla sales could again take a big hit if a large number of people object to Musk’s Twitter redesign, which is likely. This comes at a time when the electric vehicle competition is getting steeper.
Potentially positive, though
Twitter is in deep trouble. It was in trouble before Musk’s bad decision made things worse for the company. To fix something as complicated as Twitter, sometimes you need to take it down to the basics and rebuild it almost from scrap. Whether it’s intentional or not, Musk is effectively doing so, and his effort could result in a company that’s easier to manage.
Since Musk doesn’t understand advertising, once private, taking Twitter to a fee-based model could be a way to focus the service on its users rather than its advertisers. If Pivot is successful, the result should be a communications service that optimally meets the needs of its customers.
Musk has hinted at something called “Application X,” which could be a Microsoft Office-like application that combines social media activity and communication into one application. Depending on the makeup of Application X, that could pose a major threat to Facebook and Google, the most likely companies that would target Application X. This could provide both of those firms with much needed competition to focus back on their core markets.
Musk’s decision to buy Twitter is dire and has the potential to overwhelm many of his other companies, especially Tesla.
The most brutal hit will be Twitter employees, who are not only unsupported by Musk, but are likely to be laid off by him. It should be clear to most that in the very short term it would be better to effectively turn Twitter into the shell of the rest of the employees than to quit. With the job market cooling down, those who move soon will likely have the most luck finding a new job.
Musk’s moves to reinstate those banned by Twitter should lead to increased use of Twitter and advertisers leaving the platform to avoid brand damage. Musk could mitigate this consequence if he changes Twitter from an ad-supported to a user-supported revenue model.
Intel Arc A770 Limited Edition Discrete Graphics Card
At $349, the Intel Arc 770 Limited Edition with 16GB of memory seems like quite a price for a discrete graphics card. For the right users, it may well be.
I’ll give my advice again when it comes to this new thing in technology: Unless you’re willing to accept some teething pain, you don’t want to be the first to use it.
Any new technology will have compatibility issues. This product will be no different, though initial reports indicate that those problems revolve around older game titles for the most part, where the card’s features probably won’t work well. It may still outperform cards that are over two years old, but if you’re running a current AAA game, it looks like it’s fine.
Intel’s graphics technology isn’t yet competitive with AMD or Nvidia at the high end, but the card appears to be competitive at this price point. As a limited edition with a nice industrial design, it may be acceptable to gamers and PC users who want a discrete card but are on a tight budget. This card provides a way to buy the highest end card from Intel at an affordable price.
ARC A770 Limited Edition GPU (Image credit: Intel)
Keep in mind that this card comes in two versions that are only $20 apart, which makes me wonder which idiot would buy the cheaper card. The difference is memory, and you may not need the extra 8GB of memory on the more expensive cards, but there’s no way to upgrade a card from 8GB to 16GB after purchase, a ton from paying that $20. makes more sense.
The card is set up for overclocking, initially drawing 225 but is wired to draw 300 watts. An interesting strategy in this card is to offer features like Upscaling (XeSS), Smooth Sync, Speed Sync and Arc Control at this attractive price point. Often, features like this show up in cards that cost almost twice as much).
PCMag did the most comprehensive set of benchmarks we’ve ever seen on this card. It performed competitively in its price range and did the best when the title could reach the card’s advanced features. For example, games like Red Dead Redemption 2 and Shadow of the Tomb Raider that use the XeSS upscaling feature did very well with this card.
However, as I mentioned above, it conflicts with legacy games like Far Cry 5 and Rainbow Six Siege, for example. So, until those games get an update, another option will serve you better if you mainly play legacy games and not new titles.
For someone who’s okay with early adopters and plays newer games more than old ones, the Arc A770 looks like a decent value and a solid early product from Intel’s new graphics group, which is why this week is my product.
The opinions expressed in this article are those of the author and do not necessarily reflect the views of ECT News Network.