In today’s latest reminder that you shouldn’t build too much reliance on social platforms when looking to establish your business, reports suggest that Meta is now looking to scale back its investment in news content and newsletters, via its ‘Bulletin’ platform, in favor of focusing on the creator economy, and its metaverse-forward plans.
As reported by The Wall Street Journal, Meta is currently in the process of reallocating resources from its Facebook News tab and Bulletin, as per a new internal note from senior executive Campbell Brown.
As per WSJ:
“Ms. Brown, said that the company would shift engineering and product support away from the two products as “those teams heighten their focus on building a more robust Creator economy.”
What, exactly, those ‘Creator Economy’ projects are is unclear, but as noted, it once again underlines the concerns that many publishers have had over time, that if you try to play Meta’s game, and align with what it’s focusing on at any given time, you’re also then at the whim of Meta’s team, which can lose interest in projects seemingly overnight.
And those shifts can be devastating for publishers.
A key case study in this respect is ‘Little Things’, the Facebook-focused web publisher which was once a big winner of Facebook’s now infamous ‘pivot to video’, in which it encouraged brands to publish more and more video content in order to feed into consumption behaviors.
Until it didn’t.
In 2017, Facebook changed its algorithmic focus, and Little Things, which, at one stage, had over 12 million followers, lost 75% of its organic traffic, virtually overnight. The company was eventually forced to close, laying off around 100 staff – and it’s not the only publisher that’s lost out in a big way as a result of Meta’s broader strategic zigs and zags, as it seeks to maintain relevance, and keep users coming back.
Meta’s latest focus in this respect is, of course, short-form video, which TikTok has transformed into the key connection format, for almost all users.
According to Brown’s memo, Facebook will focus on short-form content, and metaverse-aligned projects, which could see more and more of Meta’s other bets lose out, particularly as it looks to rationalize expenditure, and recoup losses from lower ad spend.
That leaves Bulletin, which Meta launched in April last year, in limbo, along with the various writers and publishers that it established exclusive content deals with for the platform.
Back in December, Meta reported that more than 115 publications were active on Bulletin, many of them with thousands of subscribers, while Meta also funded 25 local news journalists as contributors to the project, which Meta saw as a potential savior for local news.
That seemed like a viable pathway, given Facebook’s ubiquity, and its connective benefits for local news content. But maybe, Meta hasn’t seen the engagement value from such that it hoped, which could play into this latest shift.
And then there’s the question of its News tab, and how Meta negates the impacts of scaling this element back.
As WSJ reports, Meta has paid publishers to participate in its News program, signing deals worth tens of millions of dollars with various news organizations, including The Wall Street Journal, The New York Times, and The Washington Post.
Most of those initial deals expire this year, which gives Meta a way out, and reports have been swirling in recent months that Meta is re-assessing its payments on this front, with big publishers standing to lose out big time as a result.
That also raises questions as to whether this might impact Meta’s deals with news publishers in various nations, where Meta has established revenue share agreements for the use of news content. Australia, Canada and the UK have all brokered deals that see Meta sharing a percentage of its revenue with local publishers, based on content displayed on the News tab – but if that’s scaled back, or even retired completely, that could force a renegotiation, with publishers no doubt set to turn up the heat on representatives in order to keep that money flowing, where they can.
But overall, as noted, the key point of note here is to not build too much reliance on Meta’s apps, or any social platform for that matter.
Yes, each platform wants you to share more content, because that ensures that they have more things to show their users when they log in, but getting too addicted to that referral traffic and income can have disastrous impacts on your longer-term strategy.
We don’t know what the full impacts will be in this instance, but it’s clear, once again, that Meta has changed its mind, which will take money out of the pockets of many partners who had worked with the platform in good faith.
Elon Musk Sells of Tesla Stock in Preparation for Possible Twitter Deal
It seems that Elon Musk isn’t entirely confident that he’ll be able to pull out of his $44 billion Twitter takeover deal, with Musk reportedly selling almost $7 billion in Tesla stock in recent days in preparation for a transaction, if he is ordered to pay up.
As reported by The Wall Street Journal:
“Mr. Musk, Tesla’s chief executive and largest shareholder, sold around 7.9 million shares between Friday and Tuesday, the disclosures show, leaving him with a 15% stake in the company. The Tesla boss has been on a selling spree over the past year, during which he has cashed out roughly $32 billion worth of shares in the electric-vehicle maker.”
Musk has since confirmed the sell-off, explaining that:
In the (hopefully unlikely) event that Twitter forces this deal to close *and* some equity partners don’t come through, it is important to avoid an emergency sale of Tesla stock.
— Elon Musk (@elonmusk) August 10, 2022
The Musk/Twitter takeover is scheduled to be heard in the Delaware Court of Chancery in October, after Musk and his team sought to exit the deal based on Twitter’s inability to convince them that only 5% of its active users are fake/bot accounts.
In response, Twitter has outlined its ‘airtight’ case against Musk’s various claims, with the court scheduling an expedited trial based on Twitter’s counter evidence. Twitter’s counter filing has also suggested that this element is not a legal impediment to the closing of the deal, under its original terms.
That means that Musk’s takeover will come down to Musk’s legal team’s ability to convince the court that Twitter’s process of counting bots and fake accounts constitutes a material altering of the original terms of the proposal, which looks like it could be a difficult path to take.
Which is why Musk is now taking measures to prepare for a likely loss, which will eventually, probably, still see Musk become Tweeter in chief. Whether he wants to be or not.
Of course, you could also argue that this is due diligence, and that Musk is simply taking steps to ensure he’s covered, just in case he loses the case. Some have also suggested that Musk’s entire Twitter takeover bid has been an elaborate front in order to facilitate the sell off of Tesla stock options that were set to expire soon. These latest sell-offs could also play into that narrative, in enabling Musk to make even more money, without raising market concerns as he reduces his Tesla stake.
That’s super rich guy math, and I won’t even pretend to understand the complexities of how that might work – but it does seem like, at the least, Musk is slightly concerned that he’s not going to win his upcoming trial, and that he will indeed be forced to buy Twitter at his original agreed price.
Though Elon has also noted that he has a back-up plan, in case his Twitter deal falls through.
There’s nothing at X.com yet, but another Twitter user also shared this video clip in which Musk explained his plans for the website.
So Musk has a ‘pretty grand vision’ for what ‘X.com’, and ‘X Corporation’, could be, with Twitter helping to expedite that plan, whatever it is.
So even if Elon does lose his upcoming court case, he could still look to make bigger waves in the social media world – while it may also suggest that Twitter could become ‘X’ or something like it, in Elon’s broader plan.
Which kind of kills off this idea:
In any event, we’re now getting closer to a resolution one way or another, with the trial date looming, and Musk preparing for the next stage, whatever that may be.
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