After the rockiest year in its history, where does Twitter go in 2023?

The scene: After a particularly rocky 2023, Twitter’s near-term future remains a major source of speculation. Elon Musk’s management style aside, there’s no denying that he has a (non-Twitter) track record of success and many business leaders see him as a visionary.

Musk's takeover brings a potentially transformative opportunity for the underperforming but iconic platform. Here’s a look at possibilities some see going forward.

Free speech versus brand safety: Musk’s initial statements during his protracted takeover focused on his antipathy toward content moderation and restrictions. In 2023, Musk will “position Twitter as the standard of what the social media landscape ‘should’ look like from a moderation standpoint,” said Diana Lee, co-founder and CEO of global marketing technology company Constellation.

• As Musk loses money, it’s unclear how long he’ll adhere to this north star without moderating his own positions. “There is no doubt that (Twitter) will continue to lose high-spending advertisers if Musk keeps it on this path,” said Lee, who notes her own clients want “their ads placed next to content they are aligned with.” Undoubtedly, more high-profile brand exits will follow.

Social media fragments further: Even before Musk's purchase, Twitter was a challenged advertising platform. “Advertising will perform better when there can be relevant messages delivered to groups that share the same interests and values,” said Doron Gerstel, CEO of ad tech firm Perion. An ad for wine belongs on a platform for wine lovers, an ad for an Arctic cruise on a travel platform, and so on.

• If Twitter implodes, the end result could be “a healthy world of fragmentation,” said Gerstel, who notes the surge of interest in Mastodon since the takeover.
• Given the low technical barriers of entry, more affinity-based platforms could emerge. The counter to Gerstel’s argument, of course, are platforms like Reddit, where someone can participate in multiple disconnected subreddits under one user ID.
• Many argue that these niche social platforms are the future, but there are reasons fragmentation can only go so far. If niche platforms attract a minimal amount of ad dollars, they won’t have the research and development funds to innovate nor the budgets for (expensive) content moderation.

It’s a bird, it’s a super app: We’ve previously discussed Musk’s ambitions to turn Twitter into a super app like WeChat, but it’s far easier said than done. There is the privacy issue, and significant investment dollars would be required to make it happen—which is more difficult with advertisers fleeing “and with Apple taking a very ‘what's in it for us’ stand,” as Adludio CEO Paul Coggins puts it.

• With Musk having publicly feuded with Apple since the takeover, expect that battlefield to develop further. Given Apple’s dominant ecosystem and Twitter being largely at its mercy, overcoming the consumer tech giant will be a formidable task.

Web3 renaissance: Twitter could serve “as a verification source, enabling something similar to a global ID system,” said Aaron Rafferty, CEO of digital collectibles firm BattlePACs. Rafferty notes that more blockchain applications have begun to integrate this feature.

• If Web3 and crypto can upend social media in a similar manner to their impact on finance in recent years, that could lead to a future in which the entire internet is built on a blockchain infrastructure. “This would have implications for data sovereignty, net neutrality, and the very way we think about the internet,” Rafferty predicts.
• In such a system, Twitter could become the new social backbone that connects people, business, and organizations, increasing the platform’s utility.

The big takeaway: Apart from going private, Twitter didn’t really change that much as a platform in 2022. Expect more substantial changes in the year ahead.