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More challenges for Elon Musk’s Twitter 2.0 revitalization, with The New York Times reporting that parts of the platform’s source code have been leaked online, which could leave the platform more vulnerable to both hackers and competitors.

Upon discovery of the leaked code data, Twitter immediately sought its removal, and vowed legal action against the culprit, who’s believed to be a disgruntled former employee.

As per NYT:

“Twitter moved on Friday to have the leaked code taken down by sending a copyright infringement notice to GitHub, an online collaboration platform for software developers where the code was posted, according to the filing. GitHub complied and took down the code that day. It was unclear how long the leaked code had been online, but it appeared to have been public for at least several months.”

The main threat of source code leaks is that it effectively provides hackers with a map of potential vulnerabilities, which could leave Twitter more susceptible to attacks in future. And in Twitter’s case, it could also help potential competitors build a Twitter-like platform, with direct insight into the back-end code that drives the site.

The latter is likely less of a concern, but given the raft of Twitter copycats that’s cropped up in recent months, in an effort to engage Twitter cast-offs who are unhappy with changes at the app, the leak comes at a particularly inopportune time for Elon’s social media project.

This also comes shortly after Elon himself revealed that the app is now worth less than half of the $44 billion he paid for it in September last year.

Late last week, Musk outlined a new incentive program for Twitter employees, structured around equity in the company, as a means to better engage them in its future success. Within this, the valuation for Twitter 2.0 was stated as $20 billion – which many market analysts say is still too high, given the current state of the app.

To be clear, Twitter is arguably in a better financial state than it was before Musk took over at the app, but also a more precarious one, in terms of safeguards and contingencies. When Elon first took the helm of the company, he claimed that it was losing $4 million per day, due to lower ad sales and high staff costs. Musk responded by immediately cutting 70% of the roles at company, while also shutting down offices, data centers – basically shedding costs wherever he could.

The end result is that Twitter is now potentially on track to break even in 2023, but it’s also experiencing a lot more errors and issues, which are likely a result of reduced oversight due to the massive staff cull.

At the same time, many Twitter advertisers have not resumed spending at the same levels since Musk took over – partly due to the global economic downturn, and partly due to Musk’s changes at the app. Add to this an additional debt burden now tied to the company as part of Musk’s takeover deal, and there are clearly some significant challenges ahead of it – yet Musk, in his announcement of the incentive scheme, also said that he sees a ‘clear but difficult pathto a $250 billion valuation for Twitter in future.

‘Difficult’ is no doubt applicable here, but ‘clear’ it is not. For context, Twitter’s currently on pace to bring in less than $2 billion in revenue for the current full year, which is well down on its pre-Musk numbers.

The main concern for advertisers remains Musk’s free speech push, which has seen him allow thousands of previously banned users back on the app, while also amplifying conspiracy theories and controversial profiles from his own Twitter account. At some stage, Musk may need to re-think that approach, in order to win over ad partners once again. But Musk himself continues to tout ongoing growth at the platform, while also claiming that advertisers are, over time, coming back.

Eventually, we’ll find out if that’s true, but the leaked source code certainly won’t help in providing assurance to ad partners that everything’s all good, and safe, at the app.

Twitter’s now seeking a court order that would force GitHub to reveal the identity of the person who shared the source code, along with any GitHub users who downloaded it.

There may well be a lot more to come on this case.