Do we really want the fickle business giant to have all our personal information and buying habits at his fingertips?
Elon Musk likes to “go away or go home.” So it was no surprise after news broke that he was buying Twitter Inc. After all, it would spark great ambition for the company:
Musk isn’t just buying Twitter to improve it. He claims a much bigger plan: create an “everything app” that does everything you need.
The idea is not preposterous. Many so-called “super apps” have been around in Asia for a long time. More than one billion Chinese citizens use QR codes through Tencent Holdings Ltd’s WeChat. To do all kinds of tasks, from buying groceries to booking a dentist appointment, sharing photos with friends or playing video games. They can access a government-issued ID through WeChat as well.
“You primarily live on WeChat in China,” Musk told Twitter employees in June. “If we can recreate that with Twitter, we’ll be a hit.”
You can see why Musk is keen to copy the form. If he really wants to quadruple Twitter’s revenue to $26.4 billion, one way would be to make him part of a platform that hosts a lot of payment activity that he can do without. WeChat generated an estimated $17.5 billion in revenue in 2021, largely through ads and by cutting back the transactions it processes for things like games, deliveries, and a burgeoning market for digital services. More than half a billion people use thousands of widgets within WeChat every day.
Grab, based in Singapore, which is SoftBank Group Corp and Uber Technologies Inc. Its largest contributor, a super app, offering passenger transportation, food delivery and digital payments.
But creating an excellent application is difficult. For one thing, Americans make much less mobile payments than their Chinese counterparts. WeChat’s success as a daily hub dates back to its timely launch, in 2011, when smartphone sales in China were exploding, and then rode the wave of an expanding network effect.
Manufacturing a large new user base like WhatsApp, Facebook or WeChat is now impossible. It would be like trying to replicate the explosion of New York’s growth into a megacity during the 19th century. The time of prosperity has passed. Networks are well established.
Silicon Valley has also played for years trying to build its own super apps based on the idea that a robust payments platform can support sprawling services in the same way that WeChat Pay does. But Facebook’s efforts to build payment services, including with a crypto platform called Libra, have collapsed, and while WeChat’s dominance comes in part from working closely with the Chinese government, major US tech companies have a very different relationship with regulators and the state: They face calls to be fired.
Slimming seems like a wise financial strategy anyway. Facebook has shut down a range of business sectors, while Instagram has been rolling back its features after criticism that it was too bloated.
If Musk is really intent, he can try to buy PayPal Holdings Inc. from eBay Inc. and closing a meaningful loop for himself after co-founding PayPal’s predecessor more than two decades ago. His name was x.com. Twitter has historically added additional features to its platform, so an all-inclusive payments service will probably need to be purchased and installed. (As it happens, none of the original PayPal founders is on the eBay board of directors today, and therefore is in a position to help facilitate this.)
But Twitter co-founder Jack Dorsey could already do just that when he was leading both Twitter and payments giant Square, now called Block Inc. Most likely, because he realized that wouldn’t work: American consumers weren’t willing to use a knife from the Swiss Army’s app, and that raised issues with regulators as well.
Anyway, it’s probably not the best idea for a fickle person like Musk to oversee an app where millions participate in social comments, payments, shopping, identification, and more. He would give the world’s richest man, notorious for his unreliability, a new level of unprecedented power that we – and we – could do without.
Musk has a giant fan base thanks to Tesla and is an accomplished self-promoter. But he also has a habit of making big promises and not keeping them. There’s a good chance this is just another idea that eventually fades away, too. Let’s hope so.
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