What You Might Not Know About Twitter | Squawkbox

[Music] Said wow. With Jack departing, the Twitter board collectively owns almost no shares. Objectively, their economic interests are simply not in line with shareholders. Joining us to talk about the takeover battle and Musk's stance on free speech, Kevin O'Leary, investment investor and venture capitalist. He's also a CNBC contributor, and Adam Singhola, Taboola founder and CEO.

Adam, we'll get to... I almost think I know where you stand. Kevin, I definitely want you to weigh in in a second. I want to... I don't know where Adam stands because I'm... Would you, when it comes to whether you're a free speech absolutist, or you think we need more content moderation, where are you, Adam? More content moderation or free speech absolutism?

Adam: Well, I'm not sure Kevin and I are in agreement here, but I am definitely more high on content moderation. I mean, I think, and I'm convinced that it's important to live in a world that our kids make decisions that are based on something that's safe for them. They're not being bullied. We want a healthy ecosystem of publishers that can participate and feel safe. We want advertisers to be able to participate and feel safe, and I think it's actually mission critical. Twitter has done a lot of hard work in the back scene. We're all seeing the front-end consumer feed, but in the back end, you know, there's a lot of hard work to sustain this church and state to make sure people feel safe. So I think it's super critical, and we need more of it.

Hey Adam, do you... will you at least concede that, let's say that you're based where Twitter is based. Let's say... I think someone characterized it as swimming with a school of fish that are all the same. All the same about... Just take, for example, cultural issues. So they look at content moderation through this prism. They're absolutely sure, and everybody around them is nodding. And it's an echo chamber. They're all like, "Yeah, yeah, yeah." And they decide on the content moderation. You don't have a problem with that? What about the other fish that are on the other side, swimming in an entirely different school?

I mean, it's a private company; they can just appeal to those other fish. But it certainly... You know, if you wanted a public town hall or public forum, you're not going to get it there.

Adam: I think the critical decision here, Joe, is to make sure there's no CEO or any executive actually that has an opinion that can make decisions. You want to separate, much like... much like, you know, on CNBC...

Kevin: No, you do that by creating a policy. You put it out there publicly so anyone can...

Adam: Yeah, we've seen Twitter's...

Kevin: No, you separate the moderators and people, human beings. You want human beings that interact and review things first. The ones they picked were horrible. The ones they picked were horrible, and I don't want them deciding for me.

Kevin: What do you think?

So the way I'd like to look at this, because this debate around curating content is not unique to Twitter, this is a problem for all social media platforms. And over the last decade, almost 10 years, this company's been public. If you compare its performance... let's talk about investors; this is the most miserable investment you could have put your dollars into in social media. It has totally lagged all its other competitors, never grew anywhere near as fast as Google, or Facebook, or Instagram, or even TikTok that just cleaned it out almost right away in a matter of months.

You have to ask yourself that the rotating suite of executives have come through this thing, and all the stock options issued over the last nine years have created virtually no value for the shareholder. Now the best way to look at this is, you gave them a decade, why not get the whacking stick out and just start all over again? And that's what Elon Musk is proposing.

The biggest risk for shareholders here, whether you believe in the free speech issue or not, is if Musk goes away, then they're back in the same miserable place they are now. You know, there's Dante's hell; at the very bottom of that is Twitter. This has been a horrific place to try and grow a business. It needs change; it needs the whacking stick; it needs everybody cleaned out of there. And I think, frankly, if you ask me about free speech and who should be cancelled, who's not, the reason this thing is underperformed is they've tried to do this curation by cancelling voices and losing millions of followers. This is an abysmal performance.

Kevin: I don't disagree that this is a company that is underperformed. I think that that is clear, and whether Elon can perform better I think is a fair question. He, of course, doesn't say that he wants to even run it for any economic purpose; he's actually been explicit about that.

The question on the free speech piece though is, you know, at some level, you either have to decide that you're completely laissez-faire, in which case Twitter and all these social media platforms, if they approached it that way, would be littered—littered—with pornography, would be littered with snuff films, would be littered with terrible language. We would be littered with all sorts of stuff that would make it completely... You know, if you think these places are hellscapes now, think about what they would look like if there was no moderation. Just think about it.

Adam: All of that already exists on the internet an uncurated way, and people seem to be surviving. All of that exists now. You know, when you start to try and figure out who should have a voice and who shouldn't, you're stepping on the basic principles of free speech in America, and that really doesn't sit well with the majority of the population.

Even free speech, as much as I think anybody and believe that if you want to go online and have a perspective or a view, you can have it. The question isn't can you put that message out there? The question is, does the distribution mechanism—the companies where it's hosted—need to distribute that to, you know, millions of people, to 10 people, or somewhere in between? That's the question, and I'm not sure is actually about free speech at all.

Kevin: Okay, but you have to impose these rules on every single social media platform. If you decide that you're going to allow for this, it has to be ubiquitous across the entire internet, and I think that's going to be impossible to do.

The cost of free speech, the cost to society is allowing the lunatic fringe to have a voice, and that's always been the case back to when they were writing newspapers by hand. You've got to get over that, Andrew. You have to realize that the lunatic fringe has a voice. It's horrible; if you don't like their opinion—pornography, I don't want my kids seeing foul language or terrorism—then you use the tools of the internet to stop those URL sites, as you do now in your home. You have those tools.

Why can't Twitter put those tools out? Why doesn't Facebook do more tools? Why doesn't Google do the same? The point is you can't curate the entire internet; it's not going to work. You can provide tools, and that's what Twitter should do. But back, you know, you've got to ask yourself, it's horrific what this company's done to their shareholders. I weep like a baby for them. I wouldn't touch this stock.

However, if Elon Musk gave me a piece of the deal, if he took it over on the debt stack or the equity, I'd back him because of executional performance on everything he touches. The rest of this board and those employees have done a horrifically bad job. I think they should be fired.

Adam: What do you think?

I think Kevin is mixing two different topics that are both important but have nothing to do with each other. The free speech is just a question about do we as people, you know, of the universe support any platform that has distribution to hundreds of millions of people and the pipes and the infrastructure exist to push a message out to millions of people, which did not exist 50 years ago, and does not exist on the open internet because that's the fundamental difference.

Facebook and Twitter have the responsibility to moderate those pipes. That infrastructure is what's different between opening the browser and going to a website of your choice. Let's put that aside. The reason Twitter is not where it can be, which I would argue is an opportunity for them, by the way, is because the advertisers' success as it comes to performance advertising. If you compare Amazon and Facebook and Google to Twitter, there's a gap there.

This is a separate topic. Then there's the question of can Twitter solve this problem? Can Twitter be a place where millions of businesses, small businesses to big brands, be as successful on Twitter as they are on Amazon, Google, and Facebook? If the answer is yes, this company is a 50 billion dollar revenue company, not five. If the answer is no, then it doesn't matter, right? That is a separate topic, and that is an opportunity for Twitter shareholders.

Kevin: Well, there's no question there's an opportunity for shareholders, but it doesn't involve this board or probably a majority of these employees. I think you have to reboot this company, get the spatula out from the sky, scrape it clean, and start again. They've tried so many times to try and figure this out.

I want to point something out to everybody here in terms of advertising dollars. Whether you like curated content or not, all of this content that Twitter puts out is not seen on the Twitter platform. You take the tweet, you put it up on the CNBC screen, and you distribute it, and you collect the advertising dollars.

The big problem with Twitter is they're simply a wire service. They haven't grown a base that they can monetize, and that requires new management. You made them famous—all the networks of television. When Trump used to tweet his stuff out, nobody saw it on Twitter. They saw it on your network, and that's why it's so broken now.

I think Elon, you know, probably bring in new fresh ideas. I'd definitely back him because I've made money with him; never made any money with the Twitter people. They suck in terms of returning capital back to shareholders, and that's horrific.

You got to think about it. After 10 years, yes, weak performance; time to change. Let's make the change; let's move on. I'm backing him if I can.

So Adam, would you try to level the playing field at all at Twitter? Let me make an example. I think you've seen cable TV, right? We don't need to mention any names, but you can watch one view of the world, and half the people that like that view watch that view, and then you can watch the other view of the world, and another half like to live in that echo chamber. And they, you know, they talk to all their friends that they're in the same tribe, and they all nod, "Oh my God, the others, other people..." They're just... oh.

And on both sides, you hear that. I view Twitter the same way. You think Twitter should... I mean, they can run it however they want. Kevin makes the point that maybe that's one of the reasons for the underperformance, but do certain people just have to go to a different social media outlet to get a fair shake? Is that okay with you if you alienate half the people with your content moderators at Twitter because they're all... they all have the same MO and the same thought set at Twitter? They're all aligned on one side of things, and what's there for people that have the other side?

Adam: Yeah, I think it's a real challenge and a problem that you're raising. You know, the whole dynamics of echo chamber and seeing more of what I know and more of what I follow is a real problem, and I'm not suggesting, by the way, social networks have resolved that.

I mean, I think, and I've spoken here on this show many, many times over about the challenge of social networks and how concerned I am about social networks versus the open web and journalism and, you know, free speech as it exists with human beings on the other side of it. So don't... you know, it's important to know how strongly I feel about the other side and specifically the open web.

I do think there's a problem there. All I'm saying is when it comes to safety, and that's so much about, you know, echo chamber, I think it's critical. Tesla has a seat belt, and you would never buy that car without a seat belt. And that seat belt matters; it matters everywhere. And by the way, Elon would never have taken that two-boat out.

So that's all I'm saying. I'm not saying it's perfect, and I think there's a lot more to be done. Well, I'm saying if this seat belt goes off, there's a real problem. It'd be great to have algorithms; it'd be great to have actual fair algorithms to dictate things. But we know that even the algorithms could be skewed with the writer of the algorithms.

So I don't know, Kevin—it's a slippery slope. It's a slippery... both sides have good points that can be made.

Kevin: You are... you're just... let it fly.

Adam: Kevin, I know which...

Kevin: No, I... why does everybody fear change so much? What's wrong? After you give someone a decade to get performance or executional skills and they can't deliver, you simply fire them. What's wrong with that? That's what's wrong; that's capitalism. It's a good thing.

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