Elon Musk and the no good, very bad social media meltdown

Twitter users awoke Nov. 10 to an uplifting tweet from @EliLillyandCo, a brand account supposedly representing the pharmaceutical giant Eli Lilly: “We are excited to announce that insulin is free now.”

A closer inspection revealed the makings of a hoax. The message did feature Twitter’s coveted blue checkmark, used to indicate an account’s legitimacy. But the impersonator running @EliLillyandCo received their checkmark not by undergoing formal verification but by paying $8 to the subscription service Twitter Blue, the recent brainchild of new Twitter owner Elon Musk. Still, it was a hoax well-crafted enough to appear legitimate at first glance—and was viewed millions of times before the real Eli Lilly caught on. In the aftermath, Eli Lilly’s stock share price fell by nearly 5%, reportedly erasing $15 billion from the company’s market cap.

Eli Lilly responded by suspending all of its advertisements on Twitter. In the words of Eli Lilly’s former senior communications official Amy O’Connor: “For $8, [Twitter is] potentially losing out on millions of dollars of revenue.” And Eli Lilly isn’t the only one fleeing the site. Thousands of advertisers—responsible for generating about nine-tenths of Twitter’s profits—have paused their Twitter operations, sparking a “massive drop in revenue”, according to a Nov. 4 tweet from Musk.

It’s not a good time to be on Twitter—or at Twitter. More than half of Twitter’s staff was laid off in the days following Musk’s October takeover; when this led to breakdowns in the site’s technical infrastructure and a surge of misinformation and hate speech, many of those employees were begged to return (to little avail). Now, Musk says the company he went through so much trouble to acquire is losing approximately $3 million per day and in so much debt that he predicts bankruptcy in its future. In just a few weeks, his haphazard changes have already landed Twitter in regulatory hot water with the Federal Trade Commission and the European Union’s GDPR, potentially leading to hundreds of millions of dollars in fines. And of course, there’s the rotten cherry on top that is Twitter Blue—Musk’s much-bemoaned paid subscription service that shut down for new users in only a week after swarms of trolls like @EliLillyandCo abused its fake blue checkmarks.

And Twitter is only the most notorious victim of what’s shaping up to be a bad year for social media as a whole. Meta, the owner of Facebook and Instagram, has fired tens of thousands of employees and seen a 70 percent drop in its stock price as Mark Zuckerberg chases the metaverse. The movement among GOP lawmakers to ban TikTok in the United States has grown in strength, propelled by the leadup to this month’s midterm elections. From small startups to giant corporations, social media-based tech companies are witnessing mass layoffs and hiring freezes—and there’s no sign of when this meltdown will end.

So what does this mean for the future of social media? There is a possibility that this year’s downturn is nothing more than a false alarm—while Twitter has seen much drama in recent days regarding big-name users leaving the site for alternatives like Mastodon, we still lack the necessary data to understand whether a “mass emigration” of Twitterers has actually materialized and to what extent.

But maybe it’s a sign of something more. With  social media deeply pervading every aspect of our 21st century lives, it is sometimes easy to forget that it’s an industry just two decades old—one that has yet to see a major challenge to its core entrepreneurial concept. Maybe this is that major challenge. Maybe this is how social media can evolve into something better. 

Perhaps the next big social media company will be decentralized, or geared more towards nurturing content creators. Or perhaps Zuckerberg is right, and five years from now we’ll all be living in the Metaverse. It’s impossible to tell which innovations will prevail. The one thing that’s certain: we are about to see some groundbreaking innovations rise from these ashes.