Billionaire IAC chairman Barry Diller says Elon Musk bought Twitter as a toy: 'How long he will use it, like toys, we don't really know'

• Billionaire IAC chairman Barry Diller has mixed feelings about Elon Musk's Twitter acquisition.
• On CNBC's Squawk Box, Diller said Musk "bought a toy, and how long he will use it, like toys, we don't really know."

Barry Diller has some thoughts on Elon Musk's Twitter acquisition.

In an interview with CNBC's Squawk Box on Monday, Diller, the 80-year-old billionaire chairman of Expedia and the internet and media conglomerate IAC, shared his predictions for the future of the social media platform under Musk's ownership.

"You've got this extraordinarily wealthy person, and he bought a toy," Diller said. "He bought a toy, and how long he will use it, like toys, we don't really know, but he's not going to walk away, I don't think."

Diller seemed hopeful that Musk could improve Twitter but doubts the company could evolve into the super-app that Musk has said he wants it to be.

"Twitter will be better, it will be smaller," Diller said.

Musk said in October that his $44 billion Twitter deal will speed up the development of an "everything app" that he says could be a kind of WeChat equivalent outside of China.

"If you're in China, you kind of live on WeChat," he previously said. "It does everything — sort of like Twitter, plus PayPal, plus a whole bunch of things, and all rolled into one, with a great interface. It's really an excellent app, and we don't have anything like that outside of China."

"I think if we could achieve that, or even close to that with Twitter, it would be an immense success," Musk continued.

By headcount, however, Twitter is already much smaller in the days since Musk bought it.

The self-proclaimed "chief twit" fired several executives, including CEO Parag Agrawal shortly after taking over. In the following days, he would go on to slash 3,700 jobs, roughly half of the company's workforce.

The layoffs may not be going according to plan, though, as some affected employees say they're now being asked to return after the company realized they were "essential for Twitter's ecosystem to function."

As for users, an internal report, written before Musk's acquisition of the platform was finalized, pointed out an "absolute decline" in Twitter's most active users since the pandemic began. Several celebrities and other figures have left the platform on account of Musk's new ownership, and some users are looking to ditch Twitter for rivals like Mastodon instead.