Commentary

Is Elon Musk's Ongoing Twitter Debacle Shining A Light On Fake Accounts?

Six weeks ago, Elon Musk’s $44 billion offer was accepted by the Twitter board, with an endless stream of fanfare in between. Now, there is evidence that shows all the endless hubbub may have been for nothing.

Or has it?

Back in mid-May, Musk tweeted that the deal was on hold while the calculation of fake Twitter accounts was verified.

On Monday, Musk’s legal team, in a new SEC filing,  claimed that Twitter breached the terms of the acquisition by refusing to provide the correct number of fake profiles on its platform.

Apparently, Musk doesn’t find the reported 5% of fake accounts acceptable or believable, because now it looks as if he’ll be able to legally back out of his original takeover bid.

“Twitter’s latest offer to simply provide additional details regarding the company’s own testing methodologies, whether through written materials or verbal explanations, is tantamount to refusing Mr. Musk’s data requests,” reads his team’s statement.

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Twitter is standing behind 5% and sees the deal as fair: “Twitter has and will continue to cooperatively share information with Mr. Musk to consummate the transaction in accordance with the terms of the merger agreement,” the company says. “We believe this agreement is in the best interest of all shareholders. We intend to close the transaction and enforce the merger agreement at the agreed price and terms.”

But––and I hate to say this––I think I agree with Musk. At least in that it’s difficult to believe only 5% of Twitter accounts are fake.

According to Entrepreneur, findings from a recent bot analysis by SparkToro and Followerwonk backed Musk’s apprehension.

Analyzing 44,058 public Twitter accounts that were active within the 90 days prior to May 13 (when the study was conducted), SparkToro and Followerwonk found 19.42% of accounts on the platform to be fake or spam accounts.

They added that although this number was four times Twitter’s Q4 2021 estimate, it was a conservative estimate: “our analysis likely undercounts,” they said.

On Monday, Texas Attorney General Ken Paxton also sided with Musk when he announced  he was investigating Twitter for potentially misleading its users (Texans, specifically) for underestimating the number of fake accounts on its platform, quoting a percentage closer to what was found in the study mentioned above.

Interestingly enough, Meta quoted the same 5% estimate of fake monthly active users on Facebook during Q1 2022.

In 2019, it was reported that on Meta’s other social platform, Instagram, 1 in every 10 users was fake, a statistic that cost brands advertising on the platform upwards of $1.3 billion during that year alone.

Thus, while there certainly remain millions of real consumers worth reaching, fake accounts can obviously be harmful for brands who use these popular platforms to target consumers. If a large chunk of an influencer’s following is fake, brands are paying gobs of money to reach those who simply don’t exist.

Ultimately, this is what seems to concern Musk.

If up to 66 million of Twitter’s 330 million monthly active users are fake, the number of monetizable users is off -- and so is the value of the platform as a whole.

1 comment about "Is Elon Musk's Ongoing Twitter Debacle Shining A Light On Fake Accounts?".
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  1. Craig Mcdaniel from Sweepstakes Today LLC, June 8, 2022 at 11:46 p.m.

    Hey Colin, good write.  The real multi-billion dollar question is - What are the fake account numbers for Google and Facebook? I am not going to comment on what I think Google's numbers might be because of the class-action lawsuit.  I will comment on Facebook.  There highly organized Chinese marketing teams that create fake accounts. There are also Whatsapp hookers. I was kicked off of FB for writing my members about this and to watch out for the fake accounts. Kicking me off of FB was not a section 230 reason. It's in the hands of my law firm.

    The point is, Elon might have opened Pandora's Box in online fake accounts and fake clicks.

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