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Elon Musk Outlines Final Steps Required to Consummate Twitter Deal



Twitter Announces Major Staffing Changes as Musk Deal Continues to Take Shape

Time for a quick check in on the Elon Musk Twitter takeover – so how close are we to Elon becoming Tweeter–in-Chief?

Musk addressed the topic in an interview for the Qatar Economic Forum earlier today, in which Musk explained that there are three key issues that need to be resolved before he will proceed with his Twitter takeover bid.

Those three elements are:

  • Fake profiles – Musk has repeatedly said that the deal cannot progress unless Twitter is able to provide evidence to support its claim that fake accounts only make up 5% of its user base. Twitter has since provided Musk’s team with its ‘full firehose’ of tweets to conduct its own assessment, but there’s no word as yet as to whether this will satisfy their demands on this aspect.
  • Debt financing – Despite being the richest man in the world (arguably), Musk also needs to secure final funding for his $44 billion Twitter offer. Musk has committed to paying $33.5 billion in cash, with an additional $7.1 billion in equity financing commitments from investors. That leaves $3.4 billion which will come via bank loans, though the full details of how this will work have not been finalized.
  • Shareholder approval – Lastly, Twitter shareholders actually have to accept Musk’s proposed deal, which Twitter’s board has recommended that they do. This is likely a formality, but it’s another step that needs to be taken for the deal to be confirmed – and with some Twitter shareholders suing Musk over the deal already, there is a chance it could get blocked at this step.

According to Musk, the deal will not be able to progress until these final details are clarified, but for Twitter’s part, it’s pushing ahead with the particulars either way, filing a new proxy statement with the SEC which once again states that it’s ‘committed to completing the transaction at the agreed price’.

Twitter Board chair Bret Taylor recently echoed the same, which suggests that Twitter will look to press Elon to consummate the deal as soon as possible, as opposed to letting him walk away on a technicality, or re-negotiate for a lower price.

Market speculation suggests that the latter is where Elon is aiming, looking to reduce his $44 billion outlay on the basis of fake profiles being a more significant element of the app than had been publicly communicated.

Though the prospects of this being a viable pathway are not great, with the SEC accepting Twitter’s past assessments of fake accounts in its official updates, which may mean that Elon has to pay up, even if he does find that there are more fakes than he expected.

Either way, that’s currently where we’re at, and we won’t know what comes next until Elon’s team comes back with their own assessment of Twitter’s data, and looks to frame that as they choose.

And Elon and Co. also have various other issues to contend with, including staff cuts at Tesla, legal action from staff, labor disputes and more.

Adding even more staffing drama into that mix doesn’t seem immediately appealing (Musk has said that he will cut Twitter staff too), but the Twitter deal is progressing at its own pace, and we should have some more insights from Musk and his team shortly.

We’ll keep you updated on any progress.

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Meta Threatens to Ban News Publishers Amid Debate Over New Revenue Share Proposal



NFTs are Coming to Facebook and Instagram – Whether You Like Them or Not

As Meta continues to lean further into AI-based content recommendations to keep users engaged in its apps, you know what it doesn’t need anywhere near as much as it used to? News content.

Meta has made this much clear, by ending its content deals with publishers, cutting its investment into news initiatives like its dedicated News Tab, Instant Articles and newsletters, and even directly noting that it’s de-prioritizing political news in-stream.

Which is why the latest push in the US to force Meta to pay more to news publishers seems particularly ill-timed.

This week, reports have suggested that the controversial ‘Journalism Competition and Preservation Act (JCPA) has been added to the annual defense authorization bill, which could see it carried into law in the new year.

The JCPA would facilitate an exemption under US antitrust law that would enable US news outlets to collectively bargain with social media platforms in order to negotiate a larger share of ad revenue, in exchange for the use of their content – i.e. it would force Meta to pay for links to news content in its apps.

Which is now, and always has been a controversial policy approach. But with the Australian Treasury Department recently reporting that its similar Media Bargaining Code has been a success, and has re-directed millions into the local media market, other nations are now taking a closer look – with New Zealand now also considering its own Media Bargaining Code along similar lines.

But again, Meta probably doesn’t need news like it used to anymore, and it could cut it off entirely in response. Which is exactly what Meta has threatened to do.

As per Meta:

If Congress passes an ill-considered journalism bill as part of national security legislation, we will be forced to consider removing news from our platform altogether rather than submit to government-mandated negotiations that unfairly disregard any value we provide to news outlets through increased traffic and subscriptions.”

Now, there’s a level of posturing here, and it seems unlikely that Meta would remove news content entirely. But that is what it did in Australia last year, amid negotiations over the media Bargaining bill.

At the same time, Australia’s media ecosphere is far smaller than the US. Would Meta really move to block all US news organizations from sharing content in its apps – and if it did, what would that mean for engagement and interaction in each?

This is the key point of the debate. On one side, media organizations argue that Meta generates a heap of engagement off the back of its reporting, which then constitutes a significant chunk of its revenue, because more users engaging more often means more ads, etc.

But Meta says that news content isn’t as big a deal to it as publishers seem to think – and as Meta notes, it views this as a more reciprocal relationship, where publishers use its apps to maximize reach, which in-turn helps them drive their business.

And again, Meta has been distancing itself from news content more and more over time, and leaning into a more TikTok-like approach of showing users video clips and entertaining posts, based on AI-fueled recommendations for each user.

Given this, could Meta now be in a position to actually cut off news publishers entirely, without impacting its revenue performance?

You can bet that, with Meta announcing major cutbacks, it’s not going to be giving up any revenue easily.

It’s early days, but this could be one to watch, as Meta potentially heads for a stand-off with publishers, in several regions, in the new year.

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