Billionaire Elon Musk's Twitter Inc. takeover bid would streamline the company's ownership and open the door for major policy changes, but analysts say many challenges will remain.

The microblogging company already faced questions about its content moderation practices and slowing user growth. After spiking to 33.8% early in the pandemic, Twitter's monetizable user growth had slowed to 13% in its most recent reporting period. The company also faced heightened political uncertainty amid questions about how it balanced free speech with concerns about misinformation or hate speech on its platform.

"Free speech is the bedrock of a functioning democracy, and Twitter is the digital town square where matters vital to the future of humanity are debated," Musk said in announcing the acquisition agreement. "Twitter has tremendous potential — I look forward to working with the company and the community of users to unlock it."

The April 25 deal announcement followed a flurry of activity involving an unsolicited offer from Musk that veered into hostile territory after early talks inviting the Tesla Inc. CEO to join Twitter's board broke off. Ultimately, the company's board agreed to Musk's $54.20 per share cash offer, which represented a 38% premium to Twitter's closing stock price on April 1, the last trading day before Musk disclosed a 9.2% stake in Twitter and an intention to seek change at the company.

Musk said his plans for Twitter include making its content-moderation algorithms open source, reducing spambots and opening the platform's blue-checkmark verification process to all human users.

Analysts said the company also must figure out to how better monetize its platform, which is heavily reliant on brand advertising to generate revenue.

"Twitter as a social media platform has failed to figure out how to get a piece of business from accounts that it helps accumulate influence," said Robert Cantwell, founder and portfolio manager of Upholdings and Compound Kings ETF, a private equity fund.

Cantwell noted that Musk himself carried a lot of influence on Twitter due to his vast social following, for which he paid Twitter nothing prior to announcing his planned buyout of the company. Many other social media influencers make money off Twitter with little personal investment in it.

Musk's acquisition could mean a host of controversial changes, including the possible reinstatement of former President Donald J. Trump's suspended account and a pivot toward a subscription model versus its current advertising dependency.

"If the entire platform moves towards a subscription basis, it would probably help on content moderation, because people would only hear what they're willing to pay for," said Darrell West, a senior fellow at The Brookings Institution's Center for Technology Innovation. "But I doubt if [Musk] could make a wholesale transformation of the platform ... it wouldn't be easy on a short-term basis to convert it entirely to subscriptions."

Michael Nathanson, senior analyst at Moffett Nathanson, said some of Musk's proposed changes to Twitter could endanger its brand advertising business.

"We expect advertisers will be less willing to spend on Twitter if Elon Musk removes content moderation in order to promote free speech," Nathanson wrote in a research note. "In this scenario, we believe advertisers will look to other platforms to build brand awareness," a scenario possibility benefiting ad-based streaming platforms or digital competitors such as TikTok.

Twitter's social star is already somewhat faded in comparison to some of its newer competitors. Snap Inc.'s flagship application, Snapchat, for example, reported 319 million daily active users in the fourth quarter of 2021. That compared to Twitter's 217 million in the same period.

Twitter reports monetized daily active users or usage, which only counts subscribers who are using its ad-support or subscription applications. The company is scheduled to report first-quarter 2022 financials on April 28.

Twitter has set a goal of reaching 315 million monetized daily active users by the end of 2023.

"They're [Twitter] more of a niche platform in terms of news," said Angelo Zino, a senior industry analyst with CFRA Research. "I just have a difficult time seeing where they can monetize the platform the way maybe Elon Musk thinks that they can."

One point on which analysts largely agree is that the deal is unlikely to face outsized regulatory scrutiny, though Twitter's role as one of the few large social media companies could invite some questions.

"Technically, I don't see any serious antitrust issues," said Jill Fisch, a professor of business law at the University of Pennsylvania Law School. "But Congress has been debating about media regulation and the extent to which platforms fit within that framework."

Musk tweeted on April 14 that he would "endeavor to keep as many shareholders in privatized Twitter as allowed by law," which Fisch said is something to watch.

"If he's got minority shareholders in the company, then he owes fiduciary duties to those minority stockholders," Fisch said. "Musk owns the whole company, he can do what he wants. But a controlling stockholder in a company with minority stockholders has to take the interest of the minority stockholders into account. So I think that may be in tension with some of the other goals that he's articulated."

The deal is expected to close this year, subject to the approval of Twitter stockholders and regulators.