As reported by Bloomberg– and confirmed on Sunday by the Saudi Arabian billionaire’s holding company — Prince Alwaleed bin Talal has bought $300 million worth of Twitter stock. Although it’s not clear whether he acquired the shares on the secondary market or directly from the company itself, the size of the investment sparked concerns that the prince might try to influence Twitter — especially if the revolutionary fervor of the “Arab spring” spreads to the kingdom. Although the risk of this seems remote, that users are raising the issue at all highlights the challenges for Twitter now that it has become a major media entity.
According to most estimates, the investment by Prince Alwaleed bin Talal bin Abdulaziz Alsaud, who is the nephew of Saudia Arabia’s king Abdullah, would give the billionaire investor a stake of about 3 percent in Twitter. That’s not a very large proportion of the stock, and as more than one observer has pointed out, it’s probably not enough to give Alwaleed much of a say in what happens at the company — especially if the Saudi prince acquired the shares from existing investors or insiders at the company, rather than through a direct investment, as some reports indicate.
Will the Saudi prince try to influence Twitter?
Alwaleed is also a well-known investor who has financial stakes in a wide range of companies, including Citigroup, News Corp. (publisher of the Wall Street Journal, among other things) and Apple. Those familiar with his investment philosophy say the prince doesn’t buy stakes in companies because he wants to influence them, but does so purely out of financial interest. Others have noted that even if Saudi Arabia did want to smother social media during an uprising, it wouldn’t have to put pressure on Twitter in order to do so, since it already controls the Internet.
That hasn’t stopped a number of Twitter users and media-industry observers from raising concerns about the investment, however — and one of the main fears seems to be that if an “Arab Spring”-style revolution were to erupt in the kingdom of Saudi Arabia, as some believe (or hope) that it could, Alwaleed might try to put undue pressure on Twitter to make it hard for dissidents to get their message out. Even the British government has considered doing this kind of thing in the case of unrest.
Although Saudia Arabia is seen by many as a friend of the West and a far cry from dictatorships such as Egypt or Libya, the reality is that the kingdom has a history of oppression of its own people — especially women, who aren’t allowed to drive and until recently weren’t allowed to vote either — and there are those who believe it is vulnerable to a popular uprising similar to the one that occurred in Egypt. And as we’ve described before, social media has played a powerful role in these revolutions by making it easier for dissidents to connect with each other and share information.
Twitter is part of the media ecosystem now
Would Twitter accede to requests from Prince Alwaleed, even if he were to make them? The company’s track record suggests this is unlikely. Among other things, Twitter forced the U.S. government to admit that it was going after the personal records of several Twitter users who were affiliated with WikiLeaks, something it could easily have provided in private if it wanted to. Instead, it made the news public and did its best to resist the government’s court order. Twitter’s general counsel Alex MacGillivray has also made it clear the company sees freedom of speech — especially during events such as the Arab uprisings — as a core principle.
But the fact that some users are afraid of what a Saudi Arabian investment might mean for the company is further evidence that Twitter has entered, or is entering, a new phase of its life. Instead of being just a plaything, it has become a media entity in its own right over the past year — a real-time information network not unlike a modern version of the Associated Press newswire, and one playing an increasingly large role in global events such as the Egyptian uprising and other ongoing military actions. Even the Taliban is starting to use it for intelligence purposes.
It has already become commonplace for users to criticize Twitter for allegedly “censoring” trending topics, by excluding terms that refer to the Occupy Wall Street movement and other popular events. The company repeatedly maintains it does not do this, and that trending topics are chosen by an algorithm that looks at frequency of use over time. But the charges of censorship continue, because for many Twitter has become such a key player in the new media ecosystem — and because people seem to increasingly see it and Google and Facebook as the new information gatekeepers.
Fox News and other outlets are accused of similar things all the time, and in many cases, their prominent investors or owners are supposedly the culprit. So what Twitter is getting isn’t that unusual for a media company — but it will have to learn how to deal with that, and how to counter it, as it becomes a larger part of the media firmament.