Musk has said in the past that he doesn't agree with the lifetime ban on Trump, which Twitter enacted in early 2021 following the Jan. 6 attack on Capitol Hill. But restoring Trump's account could pose another challenge for the platform should incendiary tweets drive advertisers away from Twitter and toward competitors like Snap (SNAP), Pinterest (PINS), and Facebook (META).
"It’s a much bigger problem to solve," Rohit Kulkarni, senior analyst at MKM Partners, said on Yahoo Finance Live (video above) about content moderation at Twitter. "Even Facebook and even larger companies have not been able to solve it in a more convincing manner."
Kulkarni explained that if Musk wanted to keep advertisers on the platform, he would have to install guardrails to protect brands from appearing alongside controversial content.
"There would need to be a mechanism for advertisers to be able to choose where their ads are being shown and in a way the [advertisers] feel to be next to content they view as brand-safe," the analyst stated.
To be sure, the Tesla CEO would have his hands full on a number of issues at the beat-up company.
Musk confidentially filed a letter in the Delaware Chancery Court on Tuesday seeking to proceed with the Twitter deal on its original terms. The reversal comes as Musk was slated to be deposed by Twitter's lawyers in the company's lawsuit, which sought to enforce the buyout contract.
For months, Musk has slammed Twitter's business for not revealing enough information about the number of fake accounts on the platform. Musk also butted heads with Twitter CEO Parag Agrawal as worried employees started to leave the social media platform.
To turn Twitter around, Musk would have to hire new management and new engineers. The platform will also ultimately have to decide what to do with the type of provocative speech that led to Trump's ban.
Kulkarni added that there could be a way forward, though the product changes won't be simple.
"It's OK to have content that could essentially not be kosher for some bunch of users," he said. "But so long as ads are not placed next to it, I think advertisers would be OK with that."