The Economics of Twitter and What Nigeria Needs To Know

The Economics of Twitter and What Nigeria Needs To Know

If Nigeria thinks that it could inflict financial harm on Twitter, it must recalibrate. My estimate is that former US President Donald Trump possibly had more followers than 95% of all accounts in Nigeria combined, before Twitter suspended his account with close to 90 million followers. Largely, if Twitter had been overly concerned about the financial impacts, it would not have done that, as Trump was a rainmaker for the company in the microblogging domain. Unlike the industrial world of ExxonMobil, Chevron and Shell where entities saw all relationships with governments from the balance sheets, modern companies like Twitter and Facebook see things differently. 

Why? The raw materials are the users because those users provide the critical factor of production which is now used to produce the final products. For any tweet on Twitter, a user is adding in the production system, feeding Twitter algorithms, to engage everyone. Anything that can break that supply chain, from the angle of the platforms, must be immediately managed.

It comes down to a virtuoso circle of network effects with its accelerating returns, generating a positive loop that keeping many users will favor a platform rather than pandering to bullies who will scare everyone. This differs from the industrial age firms like Shell where governments control access to the raw materials (crude oil deposits). They will fold to politicians!

Twitter runs a business model called Aggregation and it is the most potent business model in the world. Most of the top leading technology companies in the world have an element of it. And platform policy is at the heart of the playbook. 

Under the aggregation construct, the companies that control the value are not usually the ones that created them. Google News and Facebook control news distribution in Nigeria than Guardian, ThisDay and others. Because the MNCs tech firms “own” the audience and the customers, the advertisers focus on them, hoping to reach the readers through them. Just like that, the news creators have been systematically sidelined as they earn lesser and lesser from their works. But the aggregators like Facebook and Google smile to the bank. The reason why this happens is because of the abundance which Internet makes possible. Everyone has access to more users but that does not correlate to more revenue because the money goes to people that can help simplify the experiences to the users who will not prefer to be visiting all the news site to get any information they want. They go to Google and search and then Google takes them to the website in Nigeria with the information. Advertisers understand the value created is now with Google which simplifies that process.

If this ban continues, I will offer myself for the Office of the President, Federal Republic of Nigeria. One of my campaign promises would be to restore Twitter back to Nigeria. Magical? Lol. Yes indeed – for all the challenges in Nigeria – Naira crossing N500/$, insecurity, inflation, debts, youth unemployment, etc – the only thing that engages the Nigerian government is a blue bird. Tufiakwa!


Comment on LinkedIn Feed

Comment: I would prefer a president that is ready to ban twitter and any other social media platforms that tries to dictate to the state.

My Response: Hilary Unachukwu Economics textbooks have not changed how they see firms because new business models like aggregation are yet to enter into those textbooks. Unlike the industrial era books which we still use in secondary schools, if you see all from the modern era, the power of social media platforms come from the users. And because of that, they do not answer to any government.

More so, unlike the old world, the raw materials are outside the control of government. So, magically, there are limited options for governments.  The greatest risk to Twitter is not the Nigerian government but a possibility that a Lagos company which provides a critical plugin could disconnect it. Since that does not exist, Nigeria can fight with an algorithm, giving Twitter free global advertising in WaPost, NYTimes, etc.

Facebook suspends Trump for 2 years: it made headlines in all conservative circuits. And many go to Facebook to express frustrations. Facebook smiles to the bank. It is called a continuum. In mathematics, it is asymptotic in nature: catch me if you can, but you cannot!

Comment #2: Social media platforms’ power came from the people. So why are social media platforms eager to censor? Because aggregation cause centralization of power, Power in the media. This is not economics. This is politics. The government should not allow any adversary the power of propaganda by means of medium control. Nigeria’s government is not fighting the algorithm. They have just stopped the operation of a company. As they should have done. Maybe they should try the same thing to the Ghanaian government and see what happens. Donald Trump let his opponents have the power to not only censor him but abuse and attack his supporters also. No state should repeat that mistake. I’m bad at mathematics, but I will not add to my opponents power.

My response #2: HU , I think EB explained this clearly “read T&C before clicking NEXT”. What Twitter is doing has been going on in all human systems: ability to ban and suspend guests. The only difference here is that BIG people are affected. A school can suspend a student. A club can ban members. APC can suspend and ban members. Those happen when they do not follow the T&Cs. If you do not like the T&C, do not join the club. But if you do, follow the rules! I understand how a man who has never been “banned” or “suspended” will feel what we the commoners go through. But he accepted the T&C.


Click to register for Tekedia Mini-MBA (Sept 13 – Dec 6, 2021): online, self-paced, $140 (or N50,000 naira). Full curriculum here.

Click to join Tekedia Capital Syndicate and build Next Africa with a minimum of $10,000 co-investment in startups.

Share this post

4 thoughts on “The Economics of Twitter and What Nigeria Needs To Know

  1. Awopetu Emmanuel · Edit

    Indeed it a catch me if you can, yet, be reminded, you can’t. The future of Nigeria is not hanged on politics based, so don’t kill yourself over it. Technology if used prudently will beat power- but remember the word prudent.

    Also, note, wars are won on economics, so, the young generation should trash outdated thinking and look into the future of economics for their rise.

    Good evening.

  2. You have Buhari as president, Malami as attorney general, Mohammed as information minister, Pantami as communication/digital economy minister. Which one amongst them really understand how the knowledge economy works and where the true power resides?

    It’s not really much about bloaviating or wanting to sound tough, because at the end you expose your poor judgement and how incapacitated you have truly become.

    The things that need all the toughness and swift reactions are ailing economy, insecurity and the stealing going on within the government circles; how many have they brought their full weight on and what is the result?

    We have blown past six years of this accidental administration, which aspects of our national lives have they made better? They came in angry, via well orchestrated propaganda, but nothing gotten via propaganda ever endures; and now they somewhat believe that by sounding tough or steamrolling everyone they would earn respect and admiration.

    These are lost souls, and the best we can do is to allow them to self-destruct, how it will all end is becoming clearer.

  3. Instructive indeed!
    Meanwhile, departing slightly from the main issue here, I would mention that with the human repository of knowledge and capacity we have in Nigeria and diaspora, it will almost be immoral for the country to be short of strong candidates to vote for, in the next elections. I’d like to see you run for the office of the president “in any case” Prof. Ekekwe. I will offer myself to be on the campaign team for free.


Post Comment