Philippa Kaur

The MoPei phone-swing device is ingeniously depressing. It is a cradle for smartphones that rocks back and forth when it is plugged in, and it is designed to cheat fitness apps into believing that you are on the move. If you have a step counter, this phone shaker can gull it into thinking you have taken 8,700 paces in an hour. “Ideal for those people who don’t have the time or energy to get your recommended steps in,” boasts the product blurb. Listen to this story. Enjoy more audio and podcasts on More

Elon Musk plans to charge Twitter users $8 a month for a “verified” account, and to adjust the fee based on “purchasing-power parity”. How might that work? Think about what $8 can buy in America. Then imagine how much similar items would cost in, say, India—roughly 187 rupees on average, according to the imf. That is what Twitter might charge in that country. Converted at market exchange rates, 187 rupees is less than $2.40, making verification look relatively cheap in India. Compared with India’s income per person, however, it still looks relatively dear.■To stay on top of the biggest stories in business and technology, sign up to the Bottom Line, our weekly subscriber-only newsletter. More

In the past few years Guo Guangchang, chairman of Fosun, a Chinese conglomerate, has watched as the Communist Party has taken down his rivals. Two executives at hna, an indebted airline that once held a big stake in Deutsche Bank, have been arrested. The founder of Anbang, an acquisitive insurer, has received a lengthy prison sentence for financial crimes. So has the founder of Tomorrow Group, a banking-and-insurance empire.Mr Guo does not appear in imminent danger of sharing their fate. But his company is in trouble. On October 25th Moody’s, a ratings agency, downgraded Fosun’s debt deeper into junk territory. Chinese banks have been asking the firm to provide more collateral for loans. To meet its obligations Fosun has already divested $5bn-worth of assets this year, according to data from Refinitiv, a research firm. By 2023 it could shed $11bn-worth. That is quite the reversal for the asset-hungry group. It also marks the end of a freewheeling era in Chinese business, which is turning inwards under President Xi Jinping. Fosun has sought to offer Chinese people a three-pronged lifestyle experience that targeted their “happiness, wealth and health”. Customers could look to it to manage their money, plan their holidays and sell them medicines. To that end, it amassed, among other assets, a listed drugmaking division; financial-services firms in Europe; a large portfolio of fashion brands (such as St John Knits, an American women’s label, and Sergio Rossi, an Italian cobbler); a 20% stake in Cirque Du Soleil, a Canadian circus; and controlling stakes in Club Med, a French resort chain, and Wolverhampton Wanderers, an English football club. The perceived success of this strategy has led admirers in Chinese business circles to liken Mr Guo to Warren Buffett, America’s revered asset-accumulator. The reality of this success is debatable. In 2015 Mr Guo vanished for a few weeks amid a police probe, only to emerge pledging to buy fewer assets and focus on managing the ones he already has. Over the next two years Fosun divested assets worth around $9bn. The discipline did not last; in 2017 it splurged nearly $7bn on new investments. Soon afterwards some of its bets began to sour. In 2019 Thomas Cook, a British travel company part-owned by Fosun, filed for bankruptcy. The following year its 20% stake in Cirque Du Soleil was wiped out under similar circumstances. Throughout, debt has loomed large. In annual investor meetings Fosun executives have routinely pledged to bring leverage down. To little effect, it seems. And things may have got dicier of late, as the company has tapped more short-term debt, which now makes up 53% of its total borrowings of $16bn, up from 46% in 2021. Rolling it over has become harder in the past year, as many Chinese property developers have defaulted on offshore bonds, which has cooled investors’ enthusiasm for Chinese firms’ debt more broadly.An even bigger problem than its debt may be Fosun’s business model. It was based on a vision of the future where both China’s businesses and its people travelled and spent freely around the globe. But China’s zero-covid policy has trapped most Chinese at home for nearly three years and dented consumer confidence. And under the increasingly authoritarian Mr Xi, Chinese companies are viewed with growing caginess in the West. In this new world, Fosun looks like a relic of a happier time. ■To stay on top of the biggest stories in business and technology, sign up to the Bottom Line, our weekly subscriber-only newsletter. More

Twitter is no longer a public company, but it is being run in a more public way than ever before. Elon Musk, who took the social network private on October 27th at a cost of $44bn and immediately installed himself as its temporary chief executive, has been developing his plans for the firm through the medium of tweets at all times of day and night.Mr Musk, who said he was buying Twitter to protect free speech in “the de facto public town square”, tweeted on his first full day in charge that the company would set up a “content moderation council”. Outsourcing moderation dilemmas to an independent board, as Facebook has since 2020, would be no bad thing. One of the chief concerns about Mr Musk’s ownership of Twitter is that the platform could be leant on by anyone with leverage over his other, larger businesses. Tesla, Mr Musk’s carmaker (and main source of wealth), has a factory in Shanghai and last year made a quarter of its revenue in China, whose public squares are hardly free.Yet the focus of Mr Musk’s first week in charge was not moderation but money. His acquisition was funded with about $13bn of debt. Interest rates are rising and the ad market, which provides nearly all of Twitter’s revenue, is falling. Some advertisers are especially nervous of the new Musk-owned Twitter: ipg Mediabrands, a giant media buyer, recommended on October 31st that clients pause their spending on Twitter while the dust settled.To cut costs Mr Musk appears to have started a round of lay-offs, which is probably overdue. Last year Twitter had 1.5 employees for every $1m in revenue, compared with 0.6 at Meta, Facebook’s owner. At the same time he hopes to bring in more users with features including the resurrection of Vine, a decade-old app that beat TikTok to the short-video craze but which Twitter allowed to wither.The most radical plan, though, is to boost revenues by weaning Twitter partially off ads and onto subscriptions. Users will be able to pay $8 a month (or another amount depending on their whereabouts, see chart) to see half as many ads, post long audio and video clips and get priority for their own tweets in other people’s replies and search results.Mr Musk characterised this as a democratic alternative to the “lords & peasants system”, in which Twitter awards blue badges verifying the identity of “notable” tweeters. Increasing the number of verified users may help reduce spam. But prioritising tweets that are paid for, over ones that are good, may worsen the user experience. And charging audiences risks driving them to other social platforms that are free. As Stephen King, a blue-badged novelist, tweeted in an exchange with Mr Musk: “Fuck that, they should pay me.”Subscriptions may kick off another argument. Among users who subscribe via the Twitter app, a cut of ongoing monthly fees will go to the app store in question: 15% in the case of Google and up to 30% in the case of Apple. Companies that rely on subscriptions, like Spotify, or in-app purchases, like Epic Games, have long complained about this app-store tax. In Mr Musk, Apple and Google face another opponent—one who is armed with the world’s loudest megaphone.■To stay on top of the biggest stories in business and technology, sign up to the Bottom Line, our weekly subscriber-only newsletter. More

Rarely in recent years has a routine inaugural trip of a head of government been watched with such keen interest at home and abroad. When Germany’s Social Democrat chancellor, Olaf Scholz, travels to Beijing for a one-day visit on November 3rd, he will be the first Western leader to do so since the start of the covid-19 pandemic. Emmanuel Macron, France’s president, was keen to travel together with Mr Scholz, though preferably not right after China’s leader, Xi Jinping, got himself anointed as Communist Party chief for a norm-busting third term. Mr Scholz said nein. He is instead taking along 12 CEOs of German blue-chip firms, including the bosses of Merck, a drug company, Siemens, an engineering behemoth, and Volkswagen, Europe’s biggest carmaker.Over the past two decades the interests of German business have shaped Germany’s China policy to the exclusion of other concerns. Mr Scholz’s corporate retinue suggests that this is still the case, despite Russia’s invasion of Ukraine, which starkly illustrated the dangers of economic dependence (in Germany’s case for Russian fossil fuels) on an autocracy driven by an aggressive ideology. A new consensus in European capitals is that Europe must rethink its business ties to China. Many Germans accept this, too. “The Chinese political system has changed massively in recent years and thus our China policy must also change,” declared Annalena Baerbock, Mr Scholz’s foreign minister from the Greens party, on November 1st, during a trip to central Asia. Deutschland ag, though, is reluctant to open its eyes to the new reality.The deep commercial links between the two countries certainly complicate matters. Last year China was Germany’s top trading partner for the sixth consecutive year, with combined exports and imports of more than €245bn ($255bn). That is five times the figure in 2005. Germany relies on China for the import of solar panels, computer chips, rare earths and other critical minerals. Sino-German trade also supports more than 1m German jobs directly; millions more are indirectly connected to it. Sino-dependency is not a uniquely German affliction. America, too, trades a lot with its geopolitical rival. One important difference is that powerful German industries are unusually exposed to the Chinese market. Of Germany’s ten most valuable listed companies, nine derive at least one-tenth of their revenues from China, according to The Economist’s rough estimates, compared with two of America’s ten biggest firms. In 2021 two in five cars sold globally by Volkswagen Group were bought by Chinese motorists. Many of these rolled off the German carmaker’s Chinese production lines. This is Germany’s second unique circumstance: it has ploughed plenty of money into Chinese factories. Whereas new American foreign direct investments in China accounted for only 2% of America’s total in 2021, for Germany the figure was 14%. Four firms—three carmakers, bmw, Mercedes-Benz and Volkswagen, and basf, a chemicals giant—accounted for one-third of all eu investments in China in the past four years, according to the Rhodium Group, a research firm. And German firms are doubling down: in the first half of this year they invested €10bn in China, more than ever before. basf is in the process of putting another $10bn into its Chinese operations.Worries about undermining those business relationship have led to some controversial policy choices at home. In late October Mr Scholz decided to ignore the warnings of six of his ministers, as well as the heads of the domestic and foreign intelligence agencies, and let Cosco, a Chinese state-run shipping company, buy a stake in one of four container terminals in the port of Hamburg. Like his predecessor, Angela Merkel, he has also refused to take sides in the debate over whether Huawei, a Chinese telecoms giant, should be allowed to bid for contracts to build Germany’s 5g networks, perhaps heeding the threat by the Chinese ambassador to Germany in 2019 of “consequences” for German carmakers if Huawei were excluded from the auctions.This kid-glove approach to China is out of step with his Western counterparts. In America China-bashing is a rare bipartisan pursuit. President Joe Biden, a Democrat, has been expanding the scope of restrictions on the export of advanced technologies to China introduced by his Republican predecessor and potential future rival, Donald Trump, most recently last month. America also bans Huawei. So do several of Germany’s fellow eu members. As the geopolitical rift between China and the West widens, many Western firms are trying to reduce their exposure to Chinese supply chains and consumers. Apple is shifting some production from China to India and Vietnam, for example. Germany, by contrast, is going “full steam ahead in the wrong direction”, as Jürgen Matthes of the German Economic Institute, a think-tank, puts it.The long guten TagSome German business leaders publicly pooh-pooh such talk. Martin Brudermüller, chief executive of basf and another of Mr Scholz’s travel companions this week, recently bemoaned all the “China-bashing”. Deep down, though, they must know better. Any lingering hope of “change through trade”, the characteristically German belief that closer commercial ties with liberal democracies will spur political transformation in China just as they did to a degree in the Soviet bloc, has died with Vladimir Putin’s invasion of Ukraine and Mr Xi’s authoritarian turn. Indeed, many German companies tacitly acknowledge the heightened China risk by maintaining two independent production systems—one on the Chinese mainland, the other in the rest of the world. That is not enough. Expecting geopolitical tensions between the West and China to go away is naive at best. So is expecting an autocrat like Mr Xi, who makes no bones about wanting to indigenise Chinese industry, to respect all commercial commitments to foreigners. Not cutting all business ties with China is understandable, and perfectly sensible. Deepening them looks reckless. ■Read more from Schumpeter, our columnist on global business:The reluctant rise of the diplomat CEO (Oct 27th)Despite Ukraine, these aren’t boom times for American armsmakers (Oct 20th)Will Elon Musk-owned Twitter end up as a “deal from hell”? (Oct 13th)To stay on top of the biggest stories in business and technology, sign up to the Bottom Line, our weekly subscriber-only newsletter. More

Rarely in recent years has a routine inaugural trip of a head of government been watched with such keen interest at home and abroad. When Germany’s Social Democrat chancellor, Olaf Scholz, travels to Beijing for a one-day visit on November 3rd, he will be the first Western leader to do so since the start of the covid-19 pandemic. Emmanuel Macron, France’s president, was keen to travel together with Mr Scholz, though preferably not right after the country’s paramount leader, Xi Jinping, got himself anointed as president for life. Mr Scholz said nein. He is instead bringing along 12 CEOs of German blue-chip firms, including the bosses of Merck, a drug company, Siemens, an engineering behemoth, and Volkswagen, Europe’s biggest carmaker.Over the past two decades the interests of German business have shaped Germany’s China policy to the exclusion of other concerns. Mr Scholz’s corporate retinue suggests that this is still the case, despite Russia’s invasion of Ukraine, which starkly illustrated the dangers of economic dependence (in Germany’s case for Russian fossil fuels) on an autocracy driven by an aggressive ideology. The new consensus in European capitals is that Europe must rethink its business ties to China. Many Germans accept this, too. “The Chinese political system has changed massively in recent years and thus our China policy must also change,” declared Annalena Baerbock, Mr Scholz’s foreign minister from the coalition Greens, on November 1st during a trip to central Asia. Deutschland ag, though, is reluctant to open its eyes to the new reality.The deep commercial links between the two countries certainly complicate matters. Last year China was Germany’s top trading partner for the sixth consecutive year, with combined exports and imports of more than €245bn ($255bn). That is five times the figure in 2005. Germany relies on China for the import of solar panels, computer chips, rare earths and other critical minerals. Sino-German trade also supports more than 1m German jobs directly; millions more are indirectly connected to it. Sino-dependency is not a uniquely German affliction. America, too, trades a lot with its main geopolitical rival. One important difference is that powerful German industries are unusually exposed to the Chinese market. Of Germany’s ten most valuable listed companies, nine derive at least one-tenth of their revenues from China, according to The Economist’s rough estimates, compared with just two of America’s ten biggest companies. In 2021 two in five cars sold globally by Volkswagen Group were bought by Chinese motorists. Many of these rolled off the German carmaker’s Chinese production lines. This is Germany’s second unique circumstance: it has ploughed plenty of money into Chinese factories. Whereas new American foreign direct investments in China accounted for only 2% of America’s total in 2021, for Germany the figure was 14%. Four firms—three carmakers, bmw, Mercedes-Benz and Volkswagen, and basf, a chemicals giant—accounted for one-third of all eu investments in China in the past four years, according to the Rhodium Group, a research firm. And German firms are doubling down: in the first half of this year German companies invested €10bn in China, more than ever before. basf is in the process of investing $10bn in its Chinese operations.Worries about undermining those business relationship have led to some controversial policy choices at home. In late October Mr Scholz decided to ignore the warnings of six of his ministers, as well as the heads of the domestic and foreign intelligence agencies, and let Cosco, a Chinese state-run shipping company, buy a stake in one of four container terminals in the port of Hamburg. Like his predecessor, Angela Merkel, he has also refused to take sides in the debate over whether Huawei, a Chinese telecoms giant, should be allowed to bid for contracts to build Germany’s 5g networks, perhaps heeding the threat by the Chinese ambassador to Germany in 2019 of “consequences” for German carmakers if Huawei were excluded from the auctions.This kid-glove approach to China is out of step with his Western counterparts. In America China-bashing is a rare bipartisan pursuit. President Joe Biden, a Democrat, has been expanding the scope of restrictions on the export of advanced technologies to China introduced by his Republican predecessor and potential future rival, Donald Trump, most recently last month. America also bans Huawei. So do several of Germany’s fellow eu members. As the geopolitical rift between China and the West widens, many Western firms are trying to reduce their exposure to Chinese supply chains and consumers. Apple is shifting some production from China to India and Vietnam, for example. Germany, by contrast, is going “full steam ahead in the wrong direction”, as Jürgen Matthes of the German Economic Institute, a think-tank, puts it.The long halloSome German business leaders publicly pooh-pooh such talk. Martin Brudermüller, chief executive of basf and another of Mr Scholz’s travel companions this week, recently bemoaned all the “China-bashing”. Deep down, though, they must know better. Any lingering hope of “change through trade”, the characteristically German belief that closer commercial ties with liberal democracies will spur political transformation in China just as they did to a degree in the Soviet bloc, has died with Vladimir Putin’s invasion of Ukraine and Mr Xi’s authoritarian turn. Indeed, many German companies tacitly acknowledge the heightened China risk by maintaining two independent production systems—one on the Chinese mainland, the other in the rest of the world. That is not enough. Expecting geopolitical tensions between the West and China to go away is naive at best. So is expecting an autocrat like Mr Xi, who makes no bones about wanting to indigenise Chinese industry, to respect all commercial commitments to foreigners. Not cutting all business ties with China is understandable, and perfectly sensible. Deepening them looks reckless. ■ More

When evan spiegel, boss of Snap, wrote in a leaked memo that the social-media company had been “punched in the face hard by 2022’s new economic reality”, he might as well have been describing America’s digital darlings as a whole. After a multi-year bull run, the sector is suffering a sharp correction. The NASDAQ index, home to many consumer-internet firms, has fallen by nearly 30% in the past 12 months; the Dow Jones Industrial Average, made up of less techie firms, is down by less than 10%. Crunchbase, a data provider, estimates that American tech firms have already shed more than 45,000 jobs this year.Macroeconomics is partly to blame. Soaring inflation and rising mortgage repayments are leading consumers to cut back on discretionary spending—and most digital offerings are discretionary. Even the industry’s trillion-dollar giants have not been spared, despite continuing to rake in handsome profits. Alphabet, Amazon, Apple and Microsoft have collectively lost $2trn in market value over the past 12 months. If you think big tech has it bad, spare a thought for the not-so-big tech. In particular, three business models embraced by firms born after the dotcom crash of 2001—and subsequently by investors—are losing steam: the movers (which shuttle people or things around cities), the streamers (which offer music and tv online) and the creepers (which make money by watching their users and selling eerily well-targeted ads). Over the past year, the firms that epitomise these business models—Uber and DoorDash; Netflix and Spotify; and Snap and Meta (which has tumbled spectacularly out of the trillion-dollar club)—have shed two-thirds of their market capitalisation on average (see chart). And things could get worse. Despite being the global leader in ride-hailing, Uber is expected to report yet another quarter of negative free cashflow (the money companies generate after subtracting capital investments). In its 13-year life it has torched a cumulative $25bn of cash, equivalent to roughly half its current market value. DoorDash, the leader in food delivery, also remains lossmaking. So do Spotify (despite decent revenue growth) and Snap (in addition to sharply slowing sales). Netflix—a child of the 1990s but a streamer only since 2007—turns a profit but its revenue growth was down to 6% year on year in the third quarter, compared with a historical average of more than 20%. Meta’s revenues have now shrunk for two consecutive quarters. On the surface, the movers, streamers and creepers—and thus their problems—look distinct. On closer inspection, though, their businesses all turn out to face the same main pitfalls: a misplaced faith in network effects, low barriers to entry and a dependence on someone else’s platform. Start with network effects, or “flywheels” in Silicon Valley speak—the idea that a product’s value to a user rises with the number of users. Once the user base passes a certain threshold, the argument goes, the flywheel powers a self-perpetuating cycle of growth. It also explains why so many startups seek growth at all cost, spending millions acquiring ever more customers to get the flywheel spinning. Network effects are real. But they also have their limits. Uber believed that its headstart in ride-hailing gave it a ticket to riches, as more riders and drivers would mean less idle time for both, drawing ever more users into an unstoppable vortex. Instead, it encountered diminishing returns to scale: reducing average wait times from two minutes to one would require twice as many drivers, even though most riders would barely notice the difference. DoorDash’s hungry consumers likewise only require so many alternative Indian restaurants to choose from. And what network effects the movers enjoy are local; a user in New York cares little about the popularity of the app in Los Angeles.Spotify and Netflix also tried to capitalise on network effects, as oodles of data on the listening and viewing habits of similar users promised to deliver an unbeatable product. Belief that Netflix’s trove of user information would give it a winning edge in creating content has been shattered by flops like “True Memoirs of an International Assassin”, which scored a rare 0% audience rating on Rotten Tomatoes, a review website. For the creepers—whose social networks are a network-effects business par excellence—the worry is what happens if the flywheels start spinning in reverse. Meta had a scare in the fourth quarter of 2021, when it lost 1m users. That loss did not turn into a stampede; the company has added users since. Next time it may not be so lucky.The second problem—low barriers to entry—also looks like a supposed boon that turned into a bane. Advances in technology, from smartphones to cloud computing, allowed all manner of startups, including the movers, streamers and creepers, to build consumer software cheaply and quickly. But that also meant that copycats soon emerged, and easy money allowed them to offer generous discounts to quickly build the minimum necessary scale. Although Uber faces only one real ride-hailing rival, Lyft, in its home market, its global expansion almost immediately ran up against local rivals such as Didi in China or Grab and Gojek in South-East Asia. The combination of relatively simple products and free-of-charge user experience means a new twist on social media can be enough for a new challenger to gain momentum: just try to pry a teenager from TikTok. The barriers to entry for the streamers are higher—Netflix and Spotify spend a lot of money making or licensing content. But they are not insurmountable, especially for deep-pocketed rivals. To fend off the challenge from Disney, which is spending a total of $30bn a year on content, Netflix has to keep splurging, too, to the tune of around $17bn a year. Like customer-acquisition costs for the movers, content costs eat into streamers’ profits. Disney’s streaming services lost $1.1bn in the second quarter of this year and the company has said that its Disney+ platform expects to lose money until 2024. Heavy investment explains why Netflix’s free cashflow is equal to only 6% of revenue.The third flaw common to the three wobbly business models is their reliance on distribution platforms that are not their own. Uber and DoorDash pay a handsome fee to advertise on the iPhone and Alphabet’s Android app stores. Spotify forks over a 15% commission on subscriptions purchased on iPhones—a tax so annoying that it has filed a complaint against Apple over it. Netflix avoids the commission by forcing users to subscribe through their web browser, shifting the irritation to the customer—and quite possibly missing out on subscriptions.Worst affected by the lack of their own rails are the creepers. Their dependence on the iPhone-Android duopoly is an existential threat. Apple’s newish requirement that users give iPhone apps permission to track their activity across other apps and websites, a move since replicated by Alphabet, may this year cost Meta an estimated $10bn in forgone revenue. Parler, a creeper favoured by the far right for its liberal attitude to speech norms, was temporarily suspended by both Apple and Android. If American national-security hawks worried about TikTok’s Chinese ownership get their way and force Apple and Alphabet to expel it from their app stores, the rising star of social media could find itself similarly thwacked.The different business models do not face an equal balance of challenges. The movers would be in better nick if the industry had meaningful barriers to entry. The streamers may have been able to bat away new entrants if network effects had been stronger. And the creepers were in reasonable shape until Apple and Alphabet spoiled their party. One shaky pillar is problematic enough. Three of them is a disaster waiting to happen. ■ More

“The bird is freed,” tweeted Elon Musk late on October 27th, after at last completing his acquisition of Twitter. The world’s richest man (and third-most followed tweeter, fast closing in on Justin Bieber) now owns arguably the world’s most influential news platform. He has already reportedly sacked Twitter’s chief executive and has changed his own Twitter profile to “Chief Twit”.Mr Musk spent most of the past six months trying unsuccessfully to wriggle out of the deal. In April he agreed to pay $44bn for the company, just as tech stocks started to slide. By July Twitter’s market value had fallen below $25bn. Since then the climate has only soured. This week Alphabet, Amazon and Meta all saw double-digit percentage drops in their share price. Twitter’s much-criticised board has in the end extracted what looks like a sweet deal for shareholders.Is it a good deal for Twitter’s 240m daily users? Mr Musk has promised a more relaxed approach to content moderation on the platform, describing himself earlier this year as a “free-speech absolutist” and suggesting that only tweets that violate the law should be taken down. Like most social-media platforms, Twitter currently bans some posts that are undesirable but legal: it recently suspended Kanye West, a singer, for a string of anti-Semitic remarks, for instance.Yet Mr Musk seems to be cooling on this idea. On the day the deal was closed, he tweeted a message addressed to Twitter advertisers promising that “Twitter obviously cannot become a free-for-all hellscape, where anything can be said with no consequences!” Other social-media bosses have watered down their free speech absolutism in recent years, following Donald Trump’s presidency and the covid-19 pandemic, both of which sparked online waves of misinformation. Mark Zuckerberg, who had previously defended the principle of “everyone having a voice” banned once-permitted content including anti-vaccination material, Holocaust denial and QAnon conspiracies from Facebook in 2020.The other niggle is digital ads, which is currently how Twitter makes nearly all its money. Mr Musk has said that he “hates advertising”. There has been speculation that he might try to turn Twitter into a subscription product instead. Making this pay would be difficult. Twitter has a modest subscription option called Twitter Blue, costing $4.99 a month. But Twitter’s accounts suggest that the average American user brings in over $6 a month in ad revenue. Would people pay? Some might, but Twitter needs plenty of tweeters to keep its content coming. Mr Musk seems to be backpedalling here, too. He proclaimed on October 27th that “I also very much believe that advertisng, when done right, can delight, entertain and inform you…low-relevancy ads are spam, but highly relevant ads are actually content!”Any meaningful changes will be made harder by the immediate need to contain costs. Twitter is probably overstaffed: last year it had 1.5 employees for every $1m in revenue, compared with 0.6 at Meta. At the same time, if reports are true that the company is losing 75% of its workforce—either because they get the boot or are repelled by Mr Musk—getting anything done, let alone anything big, may prove harder. Mr Musk may not be in it for the money. But the private backers he brings along, including a few fellow billionaires and a Qatari sovereign-wealth fund, probably fancy a return on their investment. Twitter may be freed, but its owner may find himself in a $44bn cage. ■ More