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What if Bloomberg had beaten Musk to the punch?
On building (not buying), the network effects of Twitter, and why it's strange Bloomberg didn't buy the operation years ago
In a more rational universe, Elon Musk wouldn't have been the billionaire to purchase Twitter. It would have been Michael Bloomberg.
■ Not as a personal vanity exercise, which is thus far what the Musk purchase appears to be. Bloomberg could have bought it as a perfectly sound business venture (within the existing business he already controls).
■ Bloomberg's services in news and financial reporting are well-established as best-in-class market leaders. They have worldwide reach, operate 24 hours a day, and benefit from a massive ability to aggregate and organize data, serving it up as valuable information. Twitter, meanwhile, has become itself a thriving center for informational immediacy.
■ For all of its shortcomings, Twitter inhabits a unique position as the consensus online gathering spot for news and politics. That position was absolutely cemented by the environment of second half of the last decade.
■ Were a capable institution to have non-stop, direct access to the full flow of posts on Twitter, and use computing tools to mine real intelligence from all of that raw data, it would have a real gold mine of salable information at its disposal. And as an institution with a reputation to uphold, Bloomberg LP would have had the incentive to impose sensible rules for user behavior that would have preserved and perhaps even enhanced its value (instead of sparking a small user exodus, which is what's happening now).
■ The indications were there that Bloomberg had considered the possibility -- it entered into a special arrangement with Twitter to license data back in 2015. And perhaps Bloomberg gets all of the value it needs from that existing agreement, but nothing beats true vertical integration when you can get it.
■ Michael Bloomberg himself has in the past been reluctant to grow his business through acquisition, which is perhaps the reason none of this ever came to fruition. He wrote in his memoir, "I'd make a terrible venture capitalist; every company I look at seems overpriced. I always think we can create it more cheaply ourselves."
■ But building a Twitter equivalent would be nearly impossible due to its existing network effects, and things are changing so quickly that Bloomberg leadership has already pulled back on employee use of the site. There's always a chance that the current owner will diminish the market value of the property enough that an enticing price will come along: One that even the reluctant venture capitalist wouldn't be able to resist.