The last whim of millionaires is social networks

“You cannot change the nature of humans. What you can do is change the instruments they use, the techniques. Then you will change civilization.”

Alessandro Baricco wrote in 2018 a prophetic essay ( The game , the game) in which he underlined how the great social mutations of our time are the result of the dream of an elite, made up mostly of white, Anglo-Saxon (and Californian) males, who decided decades ago to launch a “mental insurrection ”. From there the internet, the iPhone and, later, the social networks were born… “and thus one of the concepts most loved by analog man, the truth, suddenly became blurry, mobile, unstable”.

The recent purchase of Twitter by Elon Musk is also part of this philosophy, in this ideological and technological movement. The richest man in the world, who has made himself for 42,000 million euros with a social network that closed last year with losses and with a stagnant number of users, boasts of wanting to turn the platform into the epicenter of “freedom of expression”. A mission almost more philanthropic than business.

Social networks increase your income, but not all of them generate profits

Previous question: are social networks a profitable business? Little is known, because many of them do not file accounts individually as they are part of larger business groups. In the last decade, income from social networks thanks to the advertising business has increased. But Snapchat, Twitter, Yelp or LinkedIn have registered modest increases and have maintained their volumes since 2014.

The only notable exception is Facebook, “which after expanding with WhatsApp and Instagram and having been the first company in the sector, has been able to benefit from the classic concept ‘the winner takes it all’, the first keeps it all”, as pointed out IESE professor Santiago Miralles. But the rest survive as best they can.

What analyst Mark Mulligan of MIDia Research has called “the attention economy downturn” has made the pie smaller, with many social networks struggling to retain users or even rapidly declining remember Tuenti or Clubhouse?). Snapchat is in annual losses, as is Twitter. LinkedIn was before it ended up in the hands of Microsoft in 2015 and since then there are doubts that it has made a profit. From YouTube there are no official figures, but it seems so, after going through hard years.

Getting a foot in the sector allows you to control data, but also access greater influence

And yet, behind the largest social networks on the planet there is a small group of North American millionaires who have not hesitated to invest – even indirectly through their companies – their money without being scared by profitability. Some have become rich thanks to them (such as Mark Zuckerberg, who concentrates the Meta-Facebook networks in his hands).

But others have bought them once their enormous wealth has given them the opportunity to do so. LinkedIn is in the galaxy of Microsoft (Bill Gates) after its acquisition in 2015. YouTube entered the universe of Alphabet (Larry Page and Sergey Brin) many years ago (2006). And now, Elon Musk with Twitter, who also enters individually and not as a company.

What are the motivations that move businessmen to scratch their pockets in these companies with uncertain return? The value of social networks is not so much in their economic numbers –at least, until now–, but in obtaining data from their users and in the influence they guarantee. “Investing in a social network also gives you the power to dialogue with institutions and a certain projection,” confirms Ferran Lalueza, professor of Information and Communication Sciences at the UOC.

Tycoons in the US enter the media to influence society as philanthropy and business

“It is something that is part of the history of North American capitalism. Once you manage to make the most money, your next aspiration is to try to influence society”, clarifies Enrique Dans, professor at IE University. For example, it is enough to remember the role played by the Ford Foundation (of the automotive family) in financing and launching the National Educational Television (NET) in the fifties of the last century.

“I find it difficult to understand the logic of the operation of Elon Musk, a man who throughout his history has above all created companies instead of buying them. I have some reasonable doubt that he will manage to improve the profitability of Twitter, a company that has been stagnant for a long time”, reflects Miralles.

For this reason, on a different scale, Elon Musk’s operation is more reminiscent of that of Jeff Bezos -another billionaire-, who in 2013 entered into Washington Post , betting against the current in the traditional media sector, in full digital transition. Basically, a way to have a presence on the big global stage.

The fact that an oligarchy is behind the largest networks may raise some doubts

Although many of these tycoons are not involved in the direct management of social networks and the media, their role as shareholders raises some doubts. They can be your whim, your toy. Or part of your strategy.

“Since we are talking about businessmen, it is easy for them to put the media at the service, albeit indirectly, of their economic interests. I am convinced that Musk with Twitter will also do something like that”, indicated Ferran Lalueza.

“When billionaires take control of our most vital communication platforms it is not a victory for free speech, it is a victory for an oligarchy,” wrote (on Twitter!) Robert Reich, a Berkeley scholar and former Secretary of Labor during the Clinton presidency. To add, in another analysis: “Freedom of expression is another freedom that depends on wealth. In practice, your ability to be heard depends on the size of megaphone you can afford. If you are extremely rich, you can buy Washington post or own Fox News. If you’re the richest person in the world, you can buy one of the biggest megaphones in the world, called Twitter, and then decide who can use it, what its algorithms will be, and how it invites or filters the big lies.”

The protagonists

one

Jeff Bezos He has been number one among the richest men in the world several times. He has businesses on the internet (Amazon, Prime Video, etc.), but not on networks. he decided to buy ‘Washington Post’ in 2016 for $250 million. He has increased the workforce and claims to have preserved editorial freedom.

two

Unlike other tycoons like Gates or Brin, Elon Musk has invested in Twitter individually and not through one of its companies. It is the first foray of the founder of Tesla in this sector. The South African insists on protecting freedom of expression. Little is known about his business strategy.

3

mark zuckerberg he is the only tycoon who has not bought social networks after the fact, but has created them himself to do business. And by the way, exert the influence of him. Being the first in the sector and after expanding with WhatsApp and Instagramits user base is huge.

4

Few could have imagined the impact it was going to have. Youtube in 2006. But Larry Page Y Sergey Briinfounders of Google, knew how to see it, and the company paid a very small figure (1,650 million dollars) seen with today’s eyes, taking into account that the Google+ network did not work.

5

That Microsoft, a leading company in business computing, took over the largest professional social network, LinkedIn, it was a sensible operation, even if the firm was losing money. Today their accounts are not public. Bill Gates He is also not inside Microsoft like then, but he is very influential in it.

It is curious that among these same tycoons there are piques on this subject. Jeff Bezos hints that Elon Musk will take advantage of Twitter to increase Tesla sales in China. And Musk himself accuses Zuckerberg of behaving like an absolutist monarch in the style of Louis XIV.

In the end, the networks serve as a great stage for the egos of the millionaires and their skirmishes, which, as Baricco would say, take place within a great game .

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The last whim of millionaires is social networks