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Twitter

Twitter

Twitter is a social media and microblogging platform founded in 2006.

Overview

Twitter is a company and a microblogging social media platform. Twitter as a platform was founded in March 2006 by Biz Stone, Evan Williams, Jack Dorsey, and Noah Glass in San Francisco, California. Originally designed for Odeo employees, Twitter was publicly launched in July 2006. The platform spun off into its own company, Twitter Inc., in April 2007.

Posts made on Twitter, known as tweets, are limited to 280 characters. Twitter began as an SMS-based platform, and as such the number of characters was initially limited to 140 until 2017. The majority of tweets average fifty characters. The number of monthly active Twitter users as of 2022 is reported to be between 368 and 450 million. It is one of the top-visited websites in the world. Twitter generates the majority of its revenue––about 90 percent––from advertising, and the remaining 10 percent is from licensing user data.

In October 2022, Twitter was purchased by entrepreneur and Tesla CEO Elon Musk in a $44 billion acquisition. Upon acquisition, Musk became Twitter's new CEO. Musk's takeover and business decisions have been met with controversy. Since the acquisition, he has laid off approximately half of all Twitter employees, over 3,700 people. An additional 1,200 employees have resigned.

History

Twitter originated in March 2006 as Twttr, a short-form communication service between employees of a podcasting company called Odeo. After Apple introduced a podcasting feature to iTunes in late 2005 and announced that it would be built into all future iPods, Odeo was in need of a new business model. Odeo employee Jack Dorsey came up with the idea of a short messaging service (SMS)-based system in which a message sent to one number would be broadcast to multiple people. Twttr proved highly popular among Odeo employees, with some users racking up monthly SMS bills worth hundreds of dollars. Dorsey said that Twitter's name was based on the definition of the word: a short burst of inconsequential information, or chirps from birds. The original shortening of the name to Twttr was partly because the twitter.com domain was already in use. It was also inspired by the company name Flickr, as well as by the standard length of American SMS short codes of five numbers.

The first published tweet on Twitter, posted by cofounder Jack Dorsey.

Twitter was launched on March 21, 2006, with cofounder Jack Dorsey's first tweet: "just setting up my twttr." The site was made public––no longer just for use by Odeo employees––on July 15, 2006. In the fall of 2006, Odeo CEO and Twitter cofounder Evan Williams purchased the shares of Odeo's investors, saying he felt bad about the company's lack of growth. This resulted in his ownership of Odeo (and Twitter, as Odeo's venture). The exact amount he paid is unknown, but it is estimated to be around $5 million. After purchasing the company, Williams fired fellow Twitter creator Noah Glass. Glass's role in creating Twitter has since been heavily ignored, as has Florian Weber's. Weber is not often recognized as an official founder of Twitter, although he was involved in developing the site since Jack Dorsey's conception of the idea.

Twitter spun off into its own company in April 2007. The website gained significant traction during the 2007 South By Southwest (SXSW) Interactive conference, where it was a popular topic of discussion. After the conference, the daily average of tweets rose from 20,000 to 60,000. By 2009, a number of high-profile celebrities had joined Twitter, including Ashton Kutcher, Britney Spears, Oprah Winfrey, and Shaquille O'Neal. Twitter introduced account verification in June 2009 after a number of celebrities complained that they were being impersonated. In July 2009, hyperlinks were added to hashtags, enabling users to explore all tweets under the same hashtag. The retweeting feature was added in November 2009.

Twitter's logo history.

In September 2010, the Twitter platform underwent a major redesign. Tweets were equipped with a details panel that revealed information about the tweet, including related content and embedded media files. The update introduced infinite scrolling to the site and mini user profiles that were viewable without the need to navigate off the current page. In addition, the first version of the Twitter bird logo––named Larry the Bird after Larry Bird––was created. Twitter's interface was tweaked again in December 2011 with the Fly redesign, which included the Connect and Discover tabs and made the site more intuitive for users. The design of the bird logo was simplified in June 2012, and its name was changed from Larry the Bird to the Twitter bird.

Twitter acquired the now defunct video sharing company Vine for $30 million in October 2012 and released the app of the same name in January 2013. Vine was a short-form video creation and sharing platform that limited video uploads to six seconds. The platform was shut down in October 2016 after a steady loss of users and advertisers to Snapchat and Instagram; the two platforms introduced their own short-form video features in 2013, shortly after Vine's release. Twitter made an unsuccessful attempt to sell Vine before shutting the app and company down.

From left to right: cofounders Jack Dorsey, Biz Stone, Evan Williams, and CEO Dick Costolo at the NYSE on Twitter's IPO date.

On November 7, 2013, Twitter launched its initial public offering (IPO) at $26 per share. A few hours into the day, the stock was listed on the New York Stock Exchange (NYSE) under the ticker TWTR at an opening share price of $45.10. It peaked for the day at $50.09 and closed at $44.90, leaving Twitter with a market value of nearly $24.5 billion. The IPO turned cofounders Dorsey and Williams into billionaires. Some analysts claimed the stock's valuation was too high for its opening day. In early 2014, TWTR's price reached over $70, its highest value so far and the second highest in the stock's history. It then saw a quick and significant drop from which it did not recover for years. By the end of 2014, the stock's value was under $40, about half of the year's peak. TWTR was eventually delisted from the NYSE in November 2022 after Elon Musk's purchase of Twitter was finalized.

In April 2014, Twitter redesigned its user profile pages to mimic those of Facebook. Changes included larger profile pictures, cover images, and pinned tweets. In January 2015, Twitter acquired Periscope, a livestreaming app that had yet to be launched, for $100 million and a significant stock compensation package. The acquisition was not announced until March. Periscope remained a separate app from Twitter. It hosted both live broadcasts and recently recorded ones, allowing them to be streamed either publicly or privately. In May 2016, Twitter announced that various elements of tweets, including attached media, links, and handles in reply tweets, would no longer count against the character limit.

Rumors of a potential sale of Twitter began in September 2016 after speculation on Wall Street was reported by Reuters and CNBC. Reputed possible buyers included Alphabet, Salesforce, and The Walt Disney Company. Twitter announced on October 5, 2016, that it was seeking to conclude sales negotiations by the end of the month after the company's third-quarter earnings were reported. Within two days of the announcement, most of the potential buyers––with the exception of Salesforce––had decided not to bid, which resulted in a 20 percent drop in TWTR share prices. A few days later, Salesforce announced it would not bid on Twitter. This led the share price to drop by an additional 8 percent. Salesforce claimed it had decided not to acquire Twitter due to the platform's inefficiency in dealing with online trolls and abuse.

In an effort to differentiate itself from its competitors, Twitter expanded its focus into livestreaming in 2016, when the company began securing rights to stream live news and events. On December 14, 2016, Twitter launched the ability for users to livestream video directly on the platform. In early 2017, Twitter declared its intention to stream double the amount of live content that year than was streamed in 2016. In May 2017, Twitter announced upcoming livestreaming partnership plans with nearly a dozen organizations, including Bloomberg Media, Live Nation, and BuzzFeed. By September 2017, Twitter had nearly 200 content partners.

In November 2017, tweet character limits were expanded from 140 to 280 for all languages except Japanese, Chinese, and Korean. The decision was criticized by some who felt that the limit increase would negatively affect Twitter's content and appearance. A data review conducted one year later found that only 12 percent of tweets were longer than 140 characters, with 1 percent of those tweets being 280 characters. The average length of a tweet is thirty-three characters. On October 30, 2019, Twitter announced it would ban political ads on the platform due to concerns of organizations and candidates "paying for reach." The ban was enforced beginning on November 22, 2019, and lifted in January 2023 after Elon Musk's takeover.

Twitter, along with several social media companies, experienced fewer negative financial effects from the Covid-19 pandemic than many other industries. It saw an influx in users during the start of the pandemic. The number of monetizable daily active users (mDAUs) in Q2 of 2020 was 186 million, a 34 percent increase from the year before and the highest quarterly yearly growth rate since Twitter began reporting mDAU growth levels. Though Twitter saw significantly more usage during the start of the pandemic, revenue was down by $683 million, or about 19 percent from the year before. Twitter's stock took a small hit at the beginning of 2020 but climbed to historically higher levels over the course of the year and throughout 2021. TWTR closed at an all-time high of $77.63 in early 2021. The company's annual revenue for 2021 was $5.08 billion, a 37 percent increase year over year. By early 2022, the stock had plunged to mid-2020 levels––between $30 and $40 per share––but the company's revenue remained high. Twitter's 2022 Q1 revenue was $1.2 billion, and mDAUs were up to 229 million.

Birdwatch, a fact-checking program intended to fight the spread of misinformation on Twitter, was piloted in January 2021 to a limited audience. Participating users were able to add contextual notes to tweets; at its time of launch, notes were only viewable through the public Birdwatch website. Birdwatch notes first became visible on Twitter to pilot participants in June 2021 and were available to all US users in October 2022. In November 2022, Birdwatch was renamed Community Notes.

An example of a warning label for a tweet with misinformation.

On March 1, 2021, Twitter began applying warning labels to tweets containing misleading information about Covid-19 vaccines. The policy included a strike system, in which repeat offenders had their accounts temporarily suspended; five strikes resulted in a permanent ban. Under Elon Musk's leadership, the practice was discontinued in November 2022. The decision disappointed health officials, who were concerned that the spread of misinformation would result in fewer people getting vaccinated.

Spaces, a live audio conversation feature, was launched in May 2021. It was first rolled out to a limited number of users in 2020 for testing. Spaces allowed for users with 600 or more followers to host live audio conversations with other users. In June 2021, Twitter began rolling out Twitter Blue, a paid subscription that offered users exclusive features. Among the first features were Bookmark Folders, to organize saved tweets; Undo Tweet, to remove a tweet shortly after sending it; and Reader Mode, to simplify the formatting of long tweet threads. Twitter Blue first launched in Australia and Canada for $4.49 AUD and $3.49 CAD, respectively. The service launched in the United States for $2.99 and New Zealand for $4.49 NZD on November 9, 2021. More features were added with the expansion, including access to ad-free news articles through Twitter.

On May 25, 2022, the Federal Trade Commission (FTC) ordered Twitter to pay a $150 million fine for profiting off of the advertising of user information in direct violation of a 2011 order that prohibited the company from misrepresenting its privacy and security practices. Twitter had collected the phone numbers and email addresses of its users under the pretense of account security purposes but instead sold the information to advertisers.

Acquisition by Elon Musk

Musk began purchasing shares of Twitter in January 2022. By early April of that year, he revealed in a regulatory filing that he owned 9 percent of Twitter's shares, making him the company's largest shareholder. The announcement led share prices to rise to almost $50. Musk then made an offer to buy Twitter at $54.20 per share but rescinded it shortly after, leading Twitter to sue him in July 2022. He counter-sued, resulting in the share price dropping to $33. After a drawn-out legal battle between the two parties, Musk went through with his original agreement to purchase Twitter for $54.20 per share at a total valuation of $44 billion. His stated reason for buying Twitter is to make it a bigger platform for free speech. Twitter has been accused of political bias against conservative and right-wing content. Musk's acquisition was largely viewed as detrimental to the company's future, due to his history as a controversial figure who often makes unpredictable decisions.

The sale was completed on October 27, 2022. On the same day, Musk fired CEO Parag Agrawal and CFO Ned Segal. More top executives were fired throughout the following week; some resigned. Multiple employees reported they had been locked out of their email and Slack accounts with no notice. In addition, Musk laid off 4,400 of Twitter's 5,500 contractors and half of its rank-and-file staff––about 3,700 people––citing revenue and cost challenges. He has since made plans to cut $1 billion from Twitter’s infrastructure costs. Musk's acquisition made Twitter a private company. On October 28, a notification of its listing removal from the NYSE was filed with the United States Securities and Exchange Commission (SEC). The stock closed the previous day at $53.70. TWTR was officially delisted from the exchange on November 8, 2022. Shareholders were paid $54.20 per share.

A week and a half after the mass layoff, Musk emailed the remaining employees about major changes to the company moving forward. One email informed staff of the end of the remote-work-for-all policy, which would force workers back to the office with few exceptions. Another email stated that going forward, all employees would be required to work "long hours at high intensity" to meet Musk's goal of a new and "extremely hardcore" Twitter. Employees were required to respond to the email, which was sent at midnight, with their decision by 5 P.M. eastern time that day. Those who did not respond or who chose not to stay were to receive three months severance. Around 1,200 employees refused the new terms and resigned.

Following Musk's acquisition, several major companies pulled their advertisements from the platform, including General Mills, United Airlines Holdings, General Motors, Pfizer, and Audi. Twitter's revenue has since dropped massively. His takeover also resulted in a considerable loss of Twitter users, including some notable celebrities. An estimated 877,000 accounts were deactivated in the week following the acquisition, more than twice the normal number in the same amount of time. Instances of hate speech on Twitter have increased since Musk's day of purchase. This has been attributed to his absolutist free speech attitude and the precedent set by his reinstatement of previously banned accounts, including the account of former US President Donald Trump, who was banned following the attempted insurrection of the United States Capitol on January 6, 2021. Other unbanned accounts under his leadership included Marjorie Taylor Greene, Andrew Tate, Babylon Bee, Kathy Griffin, Jordan Peterson, and Kanye West. Approximately 60,000 accounts were reinstated.

On December 20, 2022, Musk announced his plans to step down as CEO upon finding a replacement. He plans to instead lead Twitter's software and server teams.

Platform

Twitter is a public microblogging social media platform. Posts by users are called tweets. Tweets can contain text, photos, videos, links, GIFs, and polls. They are publicly visible on a user's profile by default, but visibility can be restricted to approved followers. As a microblogging service, tweets are limited to 280 characters; the original limit was 140. In January 2023, Elon Musk announced he would expand the character limit to 4,000 beginning in February. Photos and videos previously counted against a tweet's character length until 2016. Links count as twenty-three characters no matter the URL's actual length. Tweets can be equipped with hashtags by using the # character followed by a keyword related to the tweet's content. Hashtags are intended to connect tweets to general topics. Tweets equipped with hashtags are publicly searchable under that tag, which promotes them to a larger audience beyond one's followers. Through Twitter's search bar, users can search for other users or search by hashtag or keyword to find tweets under a certain topic. Tweets can be sent through the website or app. Prior to September 2019, tweets could be sent via SMS.

In addition to posting, users can interact with tweets by other users. Tweets can be shared (called retweeting) and liked; users can also add comments to tweets by replying. A direct messaging feature is available, allowing for private communication between users. Users can be tagged in tweets using the @ character. Twitter is free to join. However, users who wish to become verified must subscribe to Twitter Blue, a paid monthly subscription that provides access to special features on the site. Prior to Musk's acquisition, users were verified by providing Twitter with a form of legal identification. He ended this practice shortly after taking over and replaced it with a payment system tied to Twitter Blue's subscription service. The new system allowed any user to become verified for $8 per month through Twitter Blue without actual identity verification. Within hours of this change, Twitter was flooded with newly verified fake accounts for celebrities and fictional characters. After multiple users took advantage of the new system, Musk announced that any impersonation accounts must clearly be labeled as parody, and verified users who change their Twitter name will temporarily have their verification removed. Twitter Blue was suspended on November 11, 2022, to make these changes. It was relaunched one month later on December 12, with new verification rules in place.

Timeline

January 9, 2023
Musk announces that Twitter's character limit will increase from 400 to 4,000 beginning in early February.
January 4, 2023
Musk lifts Twitter's ban on political ads.
December 9, 2022
Musk announces that Twitter will delete 1.5 billion inactive accounts to free up desirable handles attached to dormant accounts.
November 8, 2022
The Twitter stock is delisted from the NYSE following Musk's acquisition.
October 27, 2022
Elon Musk completes his purchase of Twitter for $44 billion and proceeds to fire CEO Parag Agrawal and CFO Ned Segal.
October 3, 2022
A short-term tweet editing feature is introduced to subscribers of Twitter Blue in Canada, Australia, and New Zealand, allowing users to edit their tweets up to thirty minutes after posting.
May 25, 2022
Twitter is charged $150 million by the FTC in direct violation of a 2011 order regarding its misrepresentation of privacy and security practices.
April 2022
Elon Musk makes an offer to purchase Twitter, but shortly revokes his offer, culminating in a legal battle between the two parties.
June 3, 2021
Twitter Blue, a paid subscription service offering exclusive features, is introduced in Australia and Canada.
March 1, 2021
Twitter begins marking tweets that contain misleading information about the Covid-19 vaccine.

Funding Rounds

Acquisitions

Patents

Further Resources

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News

Title
Author
Date
Publisher
Description
By BARBARA ORTUTAY
November 29, 2021
AP NEWS
Newly named Twitter CEO Parag Agrawal has emerged from behind the scenes to take over one of Silicon Valley's highest-profile and politically volatile jobs.But his prior lack of name recognition coupled with a solid technical background appears to be what some big company backers were looking for to lead Twitter out of its current morass.
November 29, 2021
AP NEWS
The Associated Press (AP) -- Shares of Twitter are surging on a report that co-founder Jack Dorsey will step down as the company's chief executive. Twitter's stock, which has consistently underperformed the market, jumped more than 10% at the opening bell Monday.
By BARBARA ORTUTAY
November 16, 2021
AP NEWS
Twitter users will soon see new warning labels on false and misleading tweets, redesigned to make them more effective and less confusing. The labels, which the company has been testing since July, are an update from those Twitter used for election misinformation before and after the 2020 presidential contest.
November 10, 2021
AP NEWS
LONDON (AP) -- Britain's Prince Harry said he warned the chief executive of Twitter ahead of the Jan. 6 Capitol riots that the social media site was being used to stage political unrest in the U.S. capital.
October 28, 2021
AP NEWS
LONDON (AP) -- British lawmakers are set to grill Facebook and other tech giants Thursday over how they handle online safety as European efforts to regulate social media companies gain momentum. Representatives from Facebook, Google, Twitter and TikTok will be questioned by members of a parliamentary committee scrutinizing the British government's draft online safety legislation.
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References

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