This week's intelligence squared U.S. debate asks the question: Is elon musk Killing Twitter? Journalist Kara Swisher argues Yes. Investor Anthony Scaramucci argues No. Wired's Steven Levy and Insider's Monica Melton chime in as well with questions.
Is Elon Musk Killing Twitter? Kara Swisher vs Anthony Scaramucci Debate
Transcript Gates Capital Management Reduces Risk After Rare Down Year [Exclusive]
Gates Capital Management's ECF Value Funds have a fantastic track record. The funds (full-name Excess Cash Flow Value Funds), which invest in an event-driven equity and credit strategy, have produced a 12.6% annualised return over the past 26 years. The funds added 7.7% overall in the second half of 2022, outperforming the 3.4% return for read more
Arguing Yes : Kara Swisher
Arguing No : Anthony Scaramucci
Moderator : John Donvan
John Donvan: Hi, everybody, and welcome to Intelligence Squared. I'm John Donvan. And in this program, we are debating the impact that one man is having on the future of an enterprise you have all heard of. That enterprise is called Twitter. And the man, I know you've heard of him, is Elon Musk.
Get Our Activist Investing Case Study!
Get the entire 10-part series on our in-depth study on activist investing in PDF. Save it to your desktop, read it on your tablet, or print it out to read anywhere! Sign up below!
q4 2022 hedge fund letters, conferences and more
Boy, have we heard of him and from him, especially since he became sole owner of Twitter last fall, paying $44 billion for it, firing half of its employees, and vowing for the 230 million users of Twitter to make it better. His words: 'twitter has extraordinary potential, I will unlock it.' So, has Elon Musk done that or are the steps he's made so far a lot of missteps?
That is what we are debating. To be more specific, the Yes/No question: is Elon Musk killing Twitter? We recorded this one before a live virtual audience. You will not hear them but just wanted you to know that they were there. So, let's get to the debate, starting with my introduction of our two debaters. So, let's meet our debaters.
Arguing Yes, Elon Musk is killing Twitter, here is host of 'On with Kara Swisher,' co-host of the podcast 'Pivot,' and editor-at-large of New York Magazine, Kara Swisher.
Kara Swisher: Thank you.
John Donvan: And arguing No, that Elon Musk is not killing Twitter, we have the founder and managing partner of Skybridge, former White House communications director, and host of the podcast 'Open Book,' Anthony Scaramucci. Thanks for joining us.
Anthony Scaramucci: Thank you.
John Donvan: Before we start the debate, I'm interested in your personal connections to Elon Musk because you both know him. And you've both interacted with him. And we just, as a matter of curiosity, want to sort of get a sense of how you know him. So, Anthony, why don't you go first on that?
Anthony Scaramucci: Well, you know, my one of my closest friends, Antonio Gracias, is on the board of two of his companies. So, it would be SpaceX and Tesla, he was an early investor in PayPal.
And so, I'm gonna say that I know Elon tangentially. We've interacted a few times over the years, but I don't have a personal relationship with Elon. Obviously, I'm very impressed with him as an investor and as a business executive.
John Donvan: And what about you, Kara?
Kara Swisher: Oh, I've known him since the last century, actually, when he was at a company called X.com. It was a startup, he had had other startups, he had a sort of yellow pages directory company that he sold and made a little bit of money from, and then he moved on to X. And it was competing at the time with PayPal, and where they were quite big competitors.
And I covered them for The Wall Street Journal. They merged and later sold to eBay. So, I've known him for a very long time. And while the rest of them went off and did other things, he started investing in lots of interesting things like space and cars, which was unusual, because everybody else was doing a dating service and something stupid with their money.
And so, he was doing some interesting things. So, I knew him for a long, long time, and covered him while he was building these companies. And I've interviewed him, I don't know dozens of times and including many live appearances at some of my events. And we've texted and emailed over the years.
John Donvan: So, for neither of you is he a distant figure, you both have some connection to him. So, let's get to the debate itself. We'll go in three rounds. And our first round is going to be comprised basically of opening statements and Kara Swisher again, you are arguing Yes, in answer to the question, is he killing Twitter? So, take three to four minutes to tell us why you're a Yes.
Kara Swisher: Okay. Okay, I wrote something up. So, I hope you don't mind. I think the question is not is Elon killing Twitter, but is owning Twitter, killing Elon, essentially, at least the brand, which I think has seen more deterioration in the last six months than anyone I can think of. In doing so he's created the perfect storm of self-inflicted harm.
He's shot himself in the foot and then the other foot and he went back to the first foot. And while it'd be easy to focus solely on his demented daily tweets spewing homophobic misinformation to bear-hugging despicables to firing people with the stylings of the very worst of robber barons, I think the only thing you can do here is follow the money which I'm going to focus on.
First of all, he blew up a stable $5 billion ad business in a few months. It wasn't that good, but it was still $5 billion losing huge opportunities like the World Cup and the holiday season. The site's ad experience is now like 2 a.m. on cable with a series of grifty ads and come-ons and more porn than ever, which some people might like.
Number two, he adopted misguided advice from one of his dumber minions to focus the company on an enterprise software company. It's failed to launch anything stable or unable not to troll corporate clients. You saw that when they did Twitter Blue and everybody faked companies. He's gotten himself into class action lawsuits and how he cloddishly handled the firing of Twitter employees.
As former Twitter Blue head Tony Hale wrote: 'New York's hottest club is a Zoom call with the lawyers for the Twitter class action suit.' It will be a drag on him and all his companies, even if he throws lawyers at it, as he always tends to do.
He's been involved in lots of lawsuits over the years, this is a big one. He's allowed the conversation to get uglier by allowing 60,000 of the very worst to return to Twitter to, wait for it, improve the conversation. That's akin to Voldemort letting all the prisoners out of Azkaban prison.
He said he would make decisions for these different people via a council which doesn't exist, never happened, and it turns out it's just him late at night mainlining Cheetos, Ozempic, and conspiracy theories.
So, a group of managers making decisions managers are paid to make has been replaced by essentially one guy. According to internal sources, usage has started to decline among active users, which make up a small part of the population and a large percentage of the tweets.
Mine, for example, have gone from a couple hours a day to under one and it's declining every single day. I only use it for marketing and nothing else now, which as a platform I used rather actively, including where I met Anthony Scaramucci, where I trolled him for quite a lot of time.
And he has such a good sense of humor that he allowed me to do so, and we've become I think friends in some way. It's allowed competitors to emerge, like Mastodon, which has been compared to a waiter handing you a gun, pointing at a cow and saying, 'Get dinner.'
So, he's given lots of opportunity for a number of competitors to get in here when Twitter could have dominated here with someone like Elon at the top. Speaking of nothing burgers, the Twitter files. Nine, he's taking other businesses with him.
Tesla has owned a lion's share of the electric light vehicle registrations in the U.S. according to a number of different measurement services, but that's down 79% in 2020. There's a surge of competition including lower price models.
One Wedbush Securities person wrote, 'Musk must take a more-hands on approach in 2023 at the company, as a Twitter distraction along with the current demand situation it's falling off, is a perfect storm for the stock.' Tesla stock is down 70%. Even though it's way ahead in EV production, in batteries. It has four plants globally.
All kinds of competitors are now– he's leaving it open to competitors to launch models from Lucid and others. He's certainly trying to do so, but his eye is definitely off the ball there and they're facing the more competition they've ever had in a really bad economic environment. And lastly, follow the money. Let me read from Bill Cohan [William D. Cohan].
Just he just wrote a piece yesterday about this. 'The banks, Morgan Stanley and Bank of America will be reporting what it's doing with the debt it has,' the $13 billion in debt, 'and what the banks will be revealing, if I'm right,' this is according to Bill Cohan, 'is that thanks to the demand of the Federal Reserve, Wall Street's prudential regulator, the Twitter bank debt has been marked on the books of both Morgan Stanley and Bank of America at 50 cents on the dollar.'
That means the $13 billion of Twitter debt is now worth about half that amount, or 6.5 billion thanks to a combination of rising interest rates and Twitter's shrinking EBITA, as well as questions about whether Elon will be able to make roughly $600 million of interest payment due on the Twitter bank debt in April.
And following the logic here, if the bank debt is only worth half its face amount, it has now been recorded as such, it means Twitter equity, which is owned mostly by Elon and a bunch of his rich friends is virtually wiped out after a mere two months under Elon's rule.
To put it bluntly, this is an astounding and virtually unprecedented outcome in the world of leveraged buyouts. But he is doing something about income inequality, I guess. Anyway, that's my argument.
John Donvan: Thanks Kara, Kara Swisher. And now, the No answer comes from Anthony Scaramucci. Anthony, it's your turn.
Anthony Scaramucci: Well, I'll start out by saying that if the definition of friendship is that you can be critical of somebody and still like and enjoy their personality, then we are definitely friends, Kara, because you have been very critical of me.
And I do like and enjoy your personality. And I will say this, you've made my life more interesting as a result of our relationship. But I think the specific question, Is Twitter, dying, yes or no? And I'm going to say no, for several reasons.
And the main reason is something that Warren Buffett has said long ago about businesses, if it's a high-quality business, even a very bad management team or bad decisions, the high-quality business can endure, they'll take the high-quality business any day.
And I think the facts are indisputable about Twitter being a high-quality business in the following sense. It is a pervasive part of our Zeitgeist, now. It is the town square, proverbially. And I think there are more active users today if you look at their numbers.
This is an important metric for social media, as we both know. In addition to that, things happen on Twitter. The interaction, the FTX debacle as an example, a lot of micro-journalists covered nuances to that story on Twitter. The World Cup, while not advertising there–and we'll get into the advertising in a second.
Lots of the drama that played out in social media related to the World Cup happened on Twitter. And of course, most recently, the Damar Hamlin situation in the NFL, which my heart goes out to him and his family. And seems that he's doing well, also happening on Twitter.
So, I think it's indisputable that we're talking more about Twitter as a result of Elon Musk, and the user base is up, you know, you and I both know, Twitter Spaces is a pretty effective medium today, sort of replaces Clubhouse, if you will.
When Elon's on Twitter Spaces, there could be upwards to 100,000 people in that town square listening and potentially asking questions. So, you are bringing up things, though, that I think are true. And so, I do, I do want to validate those things. I think you said once on CNN, I was watching, that he may have spent $44 billion for a $7 billion company.
That may or may not be true. I think the financials, if they're marking down the debt, certainly people believe that there's a deterioration in the financials. And both of us know, because of our years of experience, either on Wall Street or in journalism, that large scale corporations are typically risk averse.
And they certainly don't want to be caught in a negative spotlight. And there's something that Elon Musk is doing right now, that would cause those people to pull away and I just want to spend one minute on it. And then we'll go back to the debate.
And that is our discussion in Zeitgeist about free speech. Ultimately, you're either a believer of free speech or not, I know that you are a believer, you know, I am. I once worked for a president of the United States that called the press the enemy of the people.
Of course, I had to write an op-ed in The Hill, responding to that saying, 'Mr. President, the press is not, in fact, the enemy of the people.' But what free speech actually does for our society is not only keeps our politicians honest, but it creates economic innovation.
John Donvan: More from Intelligence Squared U.S. when we return. Welcome back to Intelligence Squared U.S., let's get back to our debate.
Anthony Scaramucci: We teach our second-grade children that they can think and speak freely, they go on to create Facebook and Twitter and Google and Apple Computer. In societies where that free speech is suppressed, where they're not allowed to talk about their government, or certain potential dramatic things that are going on in this society.
They get curtailed, and then they end up stealing our intellectual property rights. So, for me, what Elon Musk is doing, by opening it up. You mentioned 60,000 criminals coming out of the asylum, I think we've got a big problem in our society, right now, I grew up in a blue-collar neighborhood, lower middle-class neighborhood.
And I can tell you, there's a very large group of people in our society now that feel left out. And if you're going to shut those people off on Twitter or shut those people off on other realms of social media, I think that's very long-term damaging, if anything, we have to embrace those people and figure out a way to bring them back into the social contract.
And I think Elon Musk is trying to do that. I see him as a radical moderate, by the way, self-described in terms of my conversations with him. And I think it's early, we'll have to see how this thing plays out. But it's far from dead. In fact, if anything, it's more vital than ever. And over the next 6, 12, 36 months, I think we'll see really good progress ahead for Twitter.
John Donvan: Anthony, I have a very quick question of clarification, when you say you think Twitter is more vital than ever, are you saying it's more necessary than ever? Or are you saying it's more thriving than ever?
Anthony Scaramucci: Well, I think it's a combination. Certainly advertising, corporate advertising revenues are down. The business itself has been impaired. But if you look at social media data in terms of the usage and the vibrancy of the network, that, in fact, is up. And so, it's a mixed bag, but yes, I do believe it's more vital than ever. And I think he's going to figure it out. I think it's very early in the process of him taking the company.
John Donvan: Alright, thanks, Anthony. So, thanks to both of you for your opening statements. And what I think I hear are two kinds of arguments about what we mean by the survivability and the viability of Twitter.
One is an argument for the business for the numbers and the direction that's taking, and the other is a description of Twitter's vitality and vibrancy having to do with its place in the culture and its relevance, its appeal to people as a place to continue to go to as a kind of public square as it's been described. So those are two different framings.
They do overlap, but I want to separate them just for the start of the conversation and start with the business argument that you made Kara. Kara, do you anticipate this company being on the road to bankruptcy? Is it that extreme?
Kara Swisher: Well, he's talked about it himself. I didn't– not the one to say it. Who knows if he's telling the truth when he says that? Because he often just spouts out something just to cause, you know, and Anthony should know about this, just to say something to cause a news cycle to happen.
So, he's talked about bankruptcy. I don't believe it will be bankrupt, because he's one of the world's richest people. I don't believe he's the world's richest man anymore because of what's happening here. But I do think that he has plenty of rich friends who will save him from disaster.
But he does have to come up, at some point, you don't love throwing good money after bad, but he will come up with money over the next year at least to pay off these bank debts. I think the danger is that this bank debt goes on Wall Street, and it's bought up by an Apollo or someone else who were much tougher on.
They don't want to have lunch with Elon Musk, as other rich people, as you noticed in the text tend to want to do including Sam Bankman-Fried wanted to sort of hang out with Elon. So, I think it depends on who gets a hold of this thing.
If he's unable to– if this debt goes on the market, and if he's unable to pay his debt obligations– I don't think the latter is going to happen. But he certainly puts himself at risk. That said, he could buy the debt himself and throw more of his money at this thing, and then own it completely. So, there's ways that he can keep it in business.
It's just, it never was a very good business. And now it's a really bad business. And as to Anthony's thing about vitality, it's a very small business, even though it gets the attention of the media and politicians. Most people do not live their lives on Twitter. And so, it's a very small business that has a very outsized profile because of the users who are on it.
John Donvan: Anthony, your response to that?
Anthony Scaramucci: Again, so you know, I always want to be fair to Kara and the facts. I think she's right about the size and scale of the business. You know, listen, I have– I think Kara has 1.4 million Twitter followers. I have a million Twitter followers.
I am on Twitter; I do look at it. I do scroll through it, and I sometimes tweet, I think it would be impossible– and she would have to answer this better than me as a journalist. But I think most journalists would find it to be relatively impossible not to have access to that site, because there are things that are going on. Kara will remember this.
There was someone in Pakistan that basically said on Twitter, 'I hear the rumblings of helicopter, there seem to be aircraft over my house.' Shortly thereafter, Osama bin Laden's house was invaded. And so, there's relevancy to Twitter, again, going back to the original premise: is Twitter dying or not?
We can debate whether it's a large or small business, we can debate whether or not Elon Musk has impaired the business. But is it dying or not? I'm going to take the position that no, it is not dying, even if Elon Musk were to leave the business and we were to write a story about the abject failure of his management team, I think Twitter goes on to live.
And I think Twitter has found its niche in the society where celebrities are on there, politicians are on there, average users are on there to gather information.
John Donvan: And you think that that position is somewhat ironclad? You think that's unassailable, that that can't be changed by anything?
Anthony Scaramucci: Well, nothing in our lives, unfortunately, is unassailable. But I do think that this has levels of resiliency as a result of the organic nature of Twitter over the last 15-ish years.
Kara Swisher: On that, Anthony, I have a couple words for you: AIM, AOL, Yahoo, MySpace. You ever heard of 'Oy?' – Yo, excuse me– Yo, Peach. It goes on and on and on. And now unfortunately, the conversation has moved away from Twitter and so– it was a small conversation.
It never took advantage of the opportunities that it had, because of a lot of reasons. It was badly managed before. But now it's sort of malevolently managed and so it's trying to take a business that it had and change it into something else. It is, you know, you don't want to use a rocket thing, but he's building the rocket in flight.
And he's also doing things that are causing the rocket to go the other direction, which is downward. And so, you wonder how these decisions are being made and who they're being made by? And it turns out, it's just literally one guy and so that's a real problem when you don't have a team around.
John Donvan: Why– What do you mean by downward?
Kara Swisher: Well, I think, you know, you don't kill– I'm perplexed as to why you would insult advertisers when you have a very– an okay advertising business. It's certainly tiny in comparison–
John Donvan: Remind listeners what exactly you're referring to?
Kara Swisher: He started tweeting. Well, it was so random and so abrupt each time. When he got there, he started insulting advertisers, and told them– and said they were un-American not to– I think that was one of them. He had, like, there's so many.
It's like Trump, there's so many I don't remember the last one he did. But he basically insulted advertisers and said they were woke if they didn't advertise on Twitter. It seems to me that they would advertise on you know, 'Satan.com,' if it would sell them a Fitbit. I just– I feel like advertisers will go anywhere. And so, he insulted them.
And then they got him on a call with advertisers where he seemed to have been somewhat medicated in some fashion, where he was somewhat nice to them. And then the very next day, he insulted them again. And so, a lot of these people, they really don't want controversy.
They just want to sell things, and they're not woke, they're capitalists. He did that with a– He's doing that very Trump-like in insulting people.
Sometimes, it doesn't make any sense why he's doing it. And maybe Anthony can talk to this because he's been with someone who does that. It is a strategy to do that, on some level, is to create chaos almost continually. So, you take away– it's sort of jazz hands in a weird way.
Anthony Scaramucci: Alright, so let me just respond to the AOL, MySpace. If we're taking that standard, then listen, everything, the Roman Empire, you know, you pick–
Kara Swisher: The Roman Empire!
Anthony Scaramucci: We can go– I mean, it did decline, Kara. So, you know what we do know–
Kara Swisher: I did, I heard. I read that.
Anthony Scaramucci: You know, in General Electric, who had started in the Dow, I think it was out of the Dow for a few years in the 1920s, and was the longest tenured Dow member, is no longer part of the Dow.
So, we do know that none of these businesses are eternal. I guess what I'm saying is, in the next half a decade to decade is Twitter dying, I think it's not dying. I think if anything, it will become more relevant.
And I think ultimately, as he executes this plan, and whatever the erratic nature is of his personality, we can go back to the situation with Elon Musk in 2008, where he was on the verge of bankruptcy in two companies: SpaceX and Twitter. He was able to use his guile, his relationships to save those two companies.
Those two companies propelled him to be the richest person in the world. We just went through one of the worst market environments in 50 years. At least the first half of 2022 was the worst since 1970. The entire year was the worst that we've had in stock market since 2008. The NASDAQ as we both know, is down 30%.
So, Elon Musk's high-growth, Tesla stock down a lot, no surprise to me. If you're going to make the case that it's down even more as a result of his erratic behavior– If Elon Musk was listening to this and he asked me that as a friend, I would say, 'Yes, it is.' You've got to figure out a way to comport yourself better.
You don't want to be accused of being Donald Trump, by anybody, just trust me. It's not a good comparison. Because ultimately, anybody that worked for Donald Trump knows about the insanity and knows about the instability. And so, Elon Musk is a brilliant guy. He's a brilliant visionary. You certainly know him better than me.
John Donvan: Well, let me jump in.
Anthony Scaramucci: Let just finish this one sentence. When I step back and look at his vision for the company, despite whatever missteps he's having right now, I'm making the bet on Elon Musk, this could be 2008 SpaceX and Tesla.
Kara Swisher: What is that actual vision? Because a lot of these things he's doing– Listen, I had been very critical of Twitter for years and had suggested subscriptions, we've suggested something that was more of a value, you know, a value proposition that you could pay for that'd be worth it like Amazon Prime is.
I certainly pay for it. I'm very happy paying for it, because it's worth it to me. I know a lot of his ideas are retreads of ideas that lots and lots of people have had, and he's unable to execute on any of these ideas.
And everyone, because he's Elon Musk, thinks he's a genius and therefore, because he's good at rockets and cars, which are physical, and have physical aspects, that he's going to be fantastic at media.
Media is hard. And this is a media company. And so, I think it's a very different situation. He's got to find another business or sell something that's worthwhile in order to make it a business. Or else it's just a plaything for a rich person.
John Donvan: Kara, you're somewhat answering the question I was going to ask both of you because Anthony was kind of alluding to this. That he has been highly unpredictable in the choices he made in terms of businesses to take on and the ways that he did that. And the question was going to be: could this be one more case of that?
That it's looking sort of erratic at the moment, but he's pivoting? Obviously, he's floated ideas like the blue checkmark and then pulled it off and then put it back again, that he's responding to mistakes quickly, that that's kind of his way.
And that there's something about him, this thing that you refer to as the genius that I think you think is overrated, but nevertheless, it's there.
Kara Swisher: I don't think it's overrated. I think it's just you assume because someone is good– It's like saying, 'I'm gonna be good at basketball because I'm good at journalism.' It's just not the same. I'm not good at basketball, by the way. But you know, it's just one of these things that we just take it for granted.
Steve Jobs, who really truly was a visionary, stayed in his lane and kept expanding from that. Now, he certainly said controversial things over the years. Mostly– his biggest– compared to Elon Musk, he parked badly. That's really pretty much the controversy around Steve Jobs. There's a bunch of them, but one of the things that's– He stayed within his lane, and you understood the daisy chain of what he was doing.
Here, it's just, it's erratic. Let Kanye West on, kick him off, do this, do that, and everything is– nothing– everything is hypocritical to everything else. And so, it doesn't make– it becomes exhausting. Twitter was already exhausting. Now it's, I find– I am a very heavy Twitter user. I was– my numbers are going down from, again, a couple hours a day, to an hour a day to six minutes.
John Donvan: Why is that?
Kara Swisher: Because it's exhausting. I turned off comments on Twitter, because I suddenly started getting– I put up something around the shooting in Colorado. And I got the most repulsive group of comments, which I'd never gotten. And I don't need it. I don't. I don't have the time.
John Donvan: Anthony, are you still tweeting as before?
Anthony Scaramucci: You know, I'm a yes. I mean, the answer is: I'm tweeting as before. I'm probably– you know, I get yelled at by my wife staring at my phone too much, so I'm probably not looking at it as much as I used to. But I think Kara's bringing up an interesting point about a circle of competence.
And if you're inside the circle of competence, you do way better. And if you're outside the circle of competence, you may do less better. And so, I just want to validate something that she's saying because she is right, the media is quite different. Because you get an image in the media, it is very hard to change or turn that image.
Okay. And so, the media, the mainstream establishment media, has declared a personal foul on Elon Musk and a personal foul on Twitter. Okay, why are they doing that? That's what you have to ask yourself the question of: are they doing that because he's bringing back controversial characters?
Whether it's Michael Flynn, Carpe Donktum, Donald Trump, is that the reason why they're doing it? Are they doing it because they don't like his personality and some of the things that he's saying? Okay, and I think, again, if I was on Elon's board, what I would be saying to him, 'Hey, listen, it is a little bit different than rockets.
And it's a little bit different than cars. Because if you're in the media business, whether you like it or not, the media is going to have a say about your business. You're going to have a constant slew of critics, analyzing and critiquing your business.' But you guys asked about the vision, let me just give it in less than a minute.
Because I did read through the PowerPoint presentation. And through Cathie Wood's fund– I just should also point this out: I am an investor, although it's a very small amount of money, in Cathie Wood's fund that's been directed towards Twitter.
The vision for the company, and Kara may say this is a retread, but I at least find it interesting that he wants to broaden the base of the social media. He wants to be more inclusive as it relates to the free speech dynamic.
And he eventually wants to create a 'super app,' which is somewhat similar to WeChat, where you could have a payment structure going through Twitter. And you could have other things going on inside of Twitter, in terms of way more robust, WhatsApp-like communication. And so, when I look at all those different things, and I look at the install base of Twitter, if he gets that right–
John Donvan: Let me just– I want to jump in for a point of clarification, Anthony, because you've been arguing against the argument that Twitter is dying. What we're really arguing is whether Musk's impact on Twitter is good or bad for it, is driving it to higher or lower places.
Anthony Scaramucci: Well, temporarily, it's driving it lower. I think Kara is right about that again. The question was,“Is it Twitter dying?” I'm saying no, it's not dying.
John Donvan: No, no, the question is: is Musk killing Twitter?
Anthony Scaramucci: Is Musk killing– Musk is temporarily hurting Twitter. But I believe that Musk will be an agent for formidable positive change.
John Donvan: When he wrote– when he wrote his letter to the board last year, he wrote, 'Twitter has extraordinary potential. I will unlock it.' Do you think he is unlocking potential there now, Anthony?
Anthony Scaramucci: But you see that– but you see this is the problem with our society, okay. We're– you know, you talk about technology? We're in 100,000-year-old pieces of machinery that haven't evolved in 100,000 years.
My iPhone went from one to 14 in 15 years, but we think linearly. So right now, if he's not doing well, we think that's going to be the permanent state, the same way we thought in 2008 that Tesla and SpaceX were going out of business.
John Donvan: Okay, I think that's a fair point. I want to take that very point to Kara.
Kara Swisher: Tesla's not at a– Tesla is buoyed by this stock that is way out of line with the other stocks and there are competitors now catching up to him. He's still ahead. Let me be clear, they're still way ahead. But it's like Netflix. Right as Disney and others started getting involved in streaming–
Anthony Scaramucci: No, no. But, Kara, I'm making the point that Tesla looked like it was out of business in 2008.
Kara Swisher: Yes, but making those comparisons aren't the same thing. Let me just say, when you say 'super app,' let me give you an– Guess what the 'super app' is. TikTok, right now. New apps will come in and do this. 'Super apps' have never worked in this country. It works in China. It has never worked in this country.
Do you trust Elon Musk with your payments, money? I don't. I would trust Apple with it. I would trust Amazon with it way before I would do that. Each of these companies has tried to do a 'super app' or is doing a version of it. It's another retread idea that is very difficult to pull off. Because you need people, you need people behind you.
You need to build this up. You have to get people using it. Let me just tell you, young people are not flocking to Twitter to use their 'super app.' And they're not going to. They're using Snapchat for communications. They're using TikTok for entertainment. They're using Facebook less and less.
John Donvan: Is that Musk's fault, though? Is that Musk's fault?
Kara Swisher: No, it's just the– it's just the state of competition. Now he's in a state of competition in cars, where GM, Ford, Mercedes, Volkswagen, everybody is in now the business and now they're, you know, they're not doing as well as Tesla. But they will do as well as Tesla.
John Donvan: This is Intelligence Squared U.S. More debate in a moment.
John Donvan: Welcome back to Intelligence Squared U.S. I'm John Donvan. Let's get back to our debate. I want to go to the point that, Anthony, you made in your opening. You said, as sort of a side point, about the fact that Musk is saying that he wants to restore free speech to the platform. Critical of some of the people who were taken down, Kara– obviously describing them as 60,000 deplorables coming back to the site. But the fact is that–
Kara Swisher: Despicables.
John Donvan: –Despicables, I apologize. I want to talk about its impact as we head into a new election cycle. Where Twitter is in this process. Where we are and what Musk's challenge will be in moderating or not moderating.
He's obviously not a free speech absolutist because– Even since he's taken over, he's kicked people or suspended people over the platform for criticizing him and for impersonating him. So, just how free speech-y is he, really, Anthony? And where does that– where does that take us and, you know, the role of Twitter in our political cycle right now?
Anthony Scaramucci: You're the moderator. You're supposed to be impartial and indifferent to the to the question, but you're fortifying me right now. And so, just want to caution you about that, because what you're basically saying is the upcoming election, Twitter is going to have this unbelievable influence in the upcoming election.
And I obviously believe that it will. And so here we are. Eighteen months from now, Twitter will be very vibrant and a very big part of the upcoming election.
John Donvan: So, you're saying, I'm taking your side?
Anthony Scaramucci: You're making my point, you're making my point, John, that Twitter is not dying. So, I just want you to go back to your impartial position that you are supposed to be in. But I thank you for making the point.
John Donvan: Well done. Well played, Anthony.
Anthony Scaramucci: But here we are right now. We're discussing this, okay. And so, there's big problems. Okay. We all know that there's robotic technology on Twitter, we know there's Russian and Chinese and other adversarial states– adversarial disinformation on Twitter. We know that there's got to be a cleanup of that.
We also know that there's electioneering that's done on Twitter that's loaded with disinformation. Look at this guy, George Santos as an example. He's almost the apotheosis now of The Great Lie being manifested into an individual.
But here's what I would say to everybody listening. Okay. We are a free speech country. It was grounded in free speech for a lot of different reasons. But the main one would be for all of us to be free. And a result of which, when you're in a free speech country, you do have qualifications.
We do know the case law, about free speech, hate speech is not protected. A threat to the public is not really protected. You know, the debate about yelling fire in the theater would be an example of that. So, we know that there has to be guardrails on free speech that you brought up the fact that Elon Musk doesn't like people being critical of him.
And so, he took some of them off the platform, and he deplatformed them. But if you remember, it was a– temporary deplatform. I think one thing we can say about Elon Musk and maybe Kara will agree or disagree. But when he gets things wrong, good entrepreneurs, typically when they get something wrong, they don't stay–
Kara Swisher: –Why get it– Anthony, why get it wrong in the first place? It just seems like the peak of a man at night who had too much sugar. Like that's what happened.
Anthony Scaramucci: That may be the case. And I ceded those points to you, that there's some managerial erraticism that's going on. And you are right about that. But I'm talking about the broader point about the vitality of Twitter, and what will Twitter look like in 2024 and 2028, etc.
And I also bring up the point, is– even with the erratic behavior, does Elon Musk manifestly get things right? Is he a value generator for his investors and for himself? And you've made the point. Yes, and rockets. Yes, and cars. But likely not in the media–
John Donvan: Anthony, let me jump in because to return to the point you were making that his commitment to, to make it very blunt, to allow people like Donald Trump back in after they were suspended and others–
Kara Swisher: Who's not coming, who's not showing up.
John Donvan: Who you said, were in your communities, that there's a sort of disconnect and disaffection with the wokeness that you said was, to some degree, you feel influencing the decisions that Twitter made prior to Musk's takeover.
And I want to know, is the return of those individuals, and I'm not sure if I'm characterizing how you would put it correctly, but the broadening of the spectrum of allowed speech on the site, going to be one of the things that he makes better about Twitter?
Anthony Scaramucci: I hope, I hope so. But let me say this, you okay, John? And I got this wrong. Donald Trump got it right. So, you should really listen. I grew up in an aspirational blue-collar family. Thirty-five short years later, those very same families, they went from economically aspirational, to economically desperational, okay?
And we've left them out of the story. And they're very angry about it. And somebody like Donald Trump saw that. And he became an avatar for their anger. Now, he didn't offer any policy solution for them.
But when he was sticking a finger in the eye of the media establishment, the political establishment, the business establishment, they loved it. And I'm just making the point that if you want a fairer, better, broader society, we have to get those people back into the fray.
Kara Swisher: But you see, Anthony, the issue is– they're not– those people aren't on Twitter. They're not using Twitter, look at the– look at the recent election, rife with election denialism on that platform, on Twitter, and many other platforms.
What did the voters do? They didn't vote for that. They voted out those people, the people that were screaming. Kari Lake screams on Twitter, didn't work for her, you know. Michael Flynn screams wherever he happens to be, didn't work for him. So, I don't think it has an impact. Because I don't think these people are using the platform.
Anthony Scaramucci: Kara, you just made my argument even better then, because you're just saying that those people, them being brought back on Twitter, somebody like Michael Flynn, they're not really having that big of an impact.
Kara Swisher: Now it isn't because it's a tired product. That's what I'm arguing is that it's a product that's now noisy and angry.
Anthony Scaramucci: I want to beat these people– I want to beat these people in the free marketplace of ideas. I want to beat Michael Flynn or Donald Trump in the free marketplace of ideas. You brought out that Donald Trump's not back on Twitter. He's not for a specific reason. He's getting paid on Truth Social not to be back on Twitter.
John Donvan: Okay, we're wandering a little bit now from the topic of whether Musk is killing Twitter. And I have to break in, Anthony, because we need to move along–
Anthony Scaramucci: –Go ahead.
John Donvan: –to bring in some members of the press, media–
Kara Swisher: –Okay.
John Donvan: –to join the conversation now. So, I want to welcome Steven Levy. Thanks for joining us. Tell people who you are and then enter the conversation please with a question.
Steven Levy: Yeah. Hi. This is a fascinating debate. I'm editor-at-large at Wired Magazine. I've been writing about technology for a long time, following Twitter for a long time. And so first for Kara, you know, to me– we ask is Elon killing Twitter. As a Twitter user, I'm super concerned about whether this is going to still be usable for me.
And throughout Twitter's history, it really has been the users to shape how Twitter works. They invented all kinds of stuff like the reply, the retweet and other things. And I'm wondering whether Twitter, despite Elon, might not be some sort of cockroach, where the users can figure out how to get around whatever mischief he does and, you know, erosions he does to the platform.
So, I'm wondering, you know, how do you respond to say, you know, look, as a user, there's a way I can kind of like, fix my– who I follow and other things change to make that happen?
Kara Swisher: I think you can do that. Sure, sure. But because, like a lot of products, you know, from using stuff, I have a box full of products that I used to use that I don't use anymore. A lot of physical products, a lot of software products, that just became either onerous or difficult or something better came along.
And so, I do think you can sit there and fiddle with it. But one of the dirty secrets of Twitter for media people, as you may know, as I know, having run sites is that it doesn't really give you much business and one of the reasons you want to use this is so that you get people to listen and read what you're doing.
Maybe virtue signal to other journalists of what you're up to and things like that. But in general, if I had to look at the stuff which actually got me money, like made money as a journalist, it was always Apple podcasts for example, references from them, or Facebook or LinkedIn. Twitter was always way down on that scale.
And so, the question is, do you realize, suddenly, that you're putting way too much work into something that doesn't give something back? And I do think the more exhausting it gets, and the easier that other competitors make things that are attractive, the more you move to them– it's the same thing with cars.
As there's more choices for Tesla, Tesla's market share is going to inevitably and should go down, because people, you know, don't want the Tesla look. They want to be in a Porsche, they want to be in, like me, a Chevy Bolt, they want to have a lesser price of something.
And so, I think he's opening it up to other competitors in a lot of ways and he's made the experience more difficult to use. And why would you want to do work arounds? He himself said it. He said it to advertisers that day when he was nice to advertisers. He said, if you use it for an hour, and you feel bad, why would you come to that product? Exactly.
John Donvan: Okay. Thanks, Steven. And you had a question also for Anthony.
Steven Levy: Yeah, another thing that's been going on in Twitter for a long time, and early in its time, and when it first began to take off, it was sort of an assumption that they would get a billion users, right, which is really what it takes for a social media site to break through and become successful more than what Kara says is an okay business.
Now, they've never been able to do that. And it seems to me that what Elon is doing by, you know, sort of arguing for his subscriptions, which is a great way to kill the number of people you have, basically creating this privileged class, which is going to like flood your timeline, if you don't pay $8, you're not getting the whole experience.
It seems to me between that and the things he does, which people just don't like and make your timeline more toxic, it's going to be even tough to keep what he has now, let alone build up to that billion, which would make it a successful enterprise. How do you answer that?
Anthony Scaramucci: It's one or the other, right? He's either a cockroach, where he's going to survive the nuclear blast or these types of things. So, I'm just saying to me, maybe he's just an upsetting cockroach. You know, ultimately, you know, what you're looking at is a short-term window of the Elon Musk behavior as owner of Twitter.
And I'm saying to you, if you look at Elon Musk's past behavior, as owner of SpaceX and Tesla, there were near death experiences of both those great companies. And he was able to figure it out and execute bold and grand visionary strategies for those companies. The question before us right now: is Elon Musk killing Twitter?
And I'm saying Elon Musk may be hurting Twitter in the short term, but I think long term, if you look at his management skill set and his capability, he is going to regrow and create great vibrancy in Twitter. I'm saying three things. I'm saying that the business is incredibly durable. I cede that to Kara that it's smaller than he would like it to be, but it's incredibly durable.
Number two, it's very relevant. We're already talking about 2024. And number three, his track record is such that I do not want to bet against him. And I believe he's going to create this free intellectual marketplace of ideas that's growing and very vibrant. It may not become the 'super app' that he wants, but I bet it could become a 'Superboy-ish' app, as opposed to a 'Superman-ish' app, and I'm betting on him.
John Donvan: Want to bring in Monica Melton also to jump in with a question and can you tell folks who you are and go for it?
Monica Melton: Hi, everyone. I'm Monica Melton, a senior tech editor at Insider Business, formerly Business Insider. Kara, you nicely laid out how Twitter may be killing Elon. While Anthony, you mentioned Elon sort of leveraging relationships to propel himself after 2008.
But do either you think Elon's reputation not only as a techno king, but as a businessperson in general is being irreparably harmed by the chaos he's created at Twitter? How does he realistically come back from this moment?
Kara Swisher: Well, I don't think anyone's irreparably harmed in this society, honestly. I mean, look, Bill Gates used to be Darth Vader, and now he's the biggest giver of philanthropy. I think people can recover their reputation. And there's a whole lot of forgiveness around certain business behavior.
I mean, there's certain people that aren't– Harvey Weinstein's not coming back, but lots of people can, so I don't think it's irreparable. I just think that why do it? You know, he sort of styled himself after Iron Man, right? That's what he was trying to go for here. And I think that's a very pleasant way to think of him.
And I think a lot of stuff he's done, as I've said, time and again, is visionary and really interesting. That said, there's something happening here there's something– some demons that follow this guy that he has to create controversy and contrarianism just for the sake of it. And I don't know his personal life.
I don't know what's going on. But one of the people I interviewed who worked for him, Yoel Roth, said it was– when you deal with them 90% of the time, it used to be very reasonable. And I think Anthony's right, it was very reasonable and interesting and sometimes odd things, he'd say odd things off the top of his head.
And then 10% of it was really quite mad, like angry for no reason, overly sensitive to criticism. That part seems to have grown enormously. Unless it's all a performative act, and the other parts seem to have died down.
I wish he had just stuck with the part that made him that way. He was the one most capable of doing this. And what he's doing now makes no sense to me, and it's turned his brand into something that's really unattractive. It's having impact on Tesla. It's having impact on lots of things.
John Donvan: I have to call for time, we're gonna wrap up this round. I want to thank Steven and Monica, for joining us in the conversation. In our final round, you each get 90 seconds to summarize your position or move it forward on why you're a Yes or why you're a No. Anthony, I'm going to let you go first. You're the No on the question of whether Elon Musk is killing Twitter. So take 90 seconds, please.
Anthony Scaramucci: Well, you know, I'll probably take less than 90 seconds, because I think I've made my points and I'll make three last ones. We'll be looking at Twitter for the 2024 election, we certainly will be looking at what candidates are writing on Twitter.
And we'll be looking for what journalists are potentially reporting or getting out onto Twitter first, because that seems to be a medium of delivery for journalists that are trying to break stories. Number two, I do believe Elon Musk is a very successful and very effective executor and manager. And despite his current erraticism, I think he's going to self-correct.
And I think he's going to find his way to making that 'Twitterverse,' if you will, better. And the last point, I think it's the most important point, you can call it the 'cockroach theory' or whatever you want to call it.
This is a durable business; it may be smaller than he wants it to be. But it's a durable business, and it can take a lot of hits before it quote unquote, gets killed off. So Elon Musk is not killing Twitter. If anything, we'll be looking at Twitter, in the 2024 presidential election.
Kara Swisher: I'm sure we'll be looking at that. I think the politicians will be the last people out the door, to turn out the lights there. They enjoy, they're narcissistic, and they get to yell at each other. It's a perfect medium for that. The question is, 'is it an actually good product?' And it is not as good a product as it was.
And they have no signs of showing anything that's valuable to a vast majority of people, except for political journalists and politicians. And increasingly, celebrities are coming off of it. Journalists that don't have anything to do with politics are coming off of it. It's become somewhat of an amusement.
Now it's become a more toxic amusement, it's like sort of watching stuff that– or eating stuff that isn't very good for you, at some point, you sort of feel sick, doing it. He's got to make it a great product. That's the only way out of this as it is with most things. If it's not a great product, it, like all the other bad products, will die as every other tech product has died over time.
We're not using all those things because either something better came along, or the product just wasn't as good, it wasn't as enjoyable, wasn't as relevant. You have to be relevant to a vast amount of people to be successful. And when you say you can't do that? Whatever you think of the Chinese ownership of Tiktok, it's an incredibly enjoyable product.
It's really fun to use. It's addictive. It's interesting, it's creative, and he's got to do those things. Instead, he wastes his time in some sort of weird personal vendetta against himself. That's really what's so sad about it, is that, you know, I sometimes feel like that he just– I feel like some days, he just needs a hug, so he could stop doing this and actually make something beautiful.
He has done in the past. He's absolutely capable of it. I'm not so sure media is as easy as building a rocket. I know it sounds crazy. But he's got to really stop the nonsense and make a product that's worth it to people and worth paying for. It's a very basic thing of capitalism. This is not about wokeism.
This is not about the mind virus and all these other tiresome, petty grievances against people, it's about making a great product and making a product that people want to pay for or use in some way that's enjoyable to them.
And it's as easy as that. And so, and by the way, tech is the young eats its old. What's coming next is what's going to be the cool thing, not Twitter. Twitter's had enough lives. And we'll see if he can transform for a little while longer, but it's not going to be much longer.
John Donvan: And that concludes our debate. And not only did I really, really enjoy this conversation, but the way that the two of you conducted it totally embodies what we aim for when we do these debates, the fact that the two of you could disagree, and still be so, not just respectful, but amicable with one another.
We appreciate that you did homework on this and that you came and you actually listened to one another. So, thank you very much for being part of this debate with us.
Anthony Scaramucci: Well, it's an honor to be here, John.
Kara Swisher: Thank you.
John Donvan: Thank you for tuning into this episode of Intelligence Squared, made possible by a generous grant from the Laura and Gary Lauder Venture Philanthropy Fund. As a nonprofit, our work to combat extreme polarization through civil and respectful debate is generously funded by listeners like you, the Rosenkrantz Foundation and friends of Intelligence Squared.
Robert Rosencrantz is our chairman. Clea Conner is CEO. David Ariosto is head of editorial, Julia Melfi, Shea O'Meara, and Marlette Sandoval are our producers. Damon Whitmore is our radio producer, and I'm your host, John Donvan. We'll see you next time.
This transcript has been lightly edited for clarity. Please excuse any errors.