Faced With the Flight of Advertisers From Twitter, Elon Musk Goes to War With Apple.
In Twitter's precarious situation, a head-on battle with Apple seems hard to win even for Elon Musk.
Decidedly, not a day goes by without Elon Musk creating controversy. This time, Elon Musk decided to open hostilities against Apple. The boss of Tesla and SpaceX violently attacked the company led by Tim Cook, in a dozen tweets Monday, November 29, 2022.
“Apple has mostly stopped advertising on Twitter. Do they hate free speech in America?” tweeted the new boss of the social network. “Apple has also threatened to withhold Twitter from its App Store, but won’t tell us why,” he added shortly after.
“Did you know Apple puts a secret 30% tax on everything you buy through their App Store?” the billionaire continued.
Elon Musk also tweeted a meme, a photo with overprinted text depicting a car named Elon that chooses to fork over to war with Apple, rather than continue straight and pay that 30%.
Advertiser leakage is problematic for Elon Musk's Twitter
Elon Musk's strategy may cost him dearly. Last year, nearly 90% of Twitter's revenue came from online advertising. Apple is one of many brands that have decided to freeze their ad buys because of the billionaire's erratic behavior.
According to the Washington Post, the California-based company was Twitter's largest customer, with ad buys costing it $48 million in 2021. “The number one concern for advertisers is the proliferation of hateful content on the platform, as well as identity theft,” said Jasmine Enberg, an analyst at eMarketers. “In general, advertisers are concerned because of the instability in the company.”
But the main risk for Elon Musk lies elsewhere.
Apple could choose to expel Twitter from its App Store if it considers the platform to be harboring dangerous content. This would be disastrous for the social network, which would no longer be readily available to iPhone users. Shortly after the attack on Capitol Hill by pro-Trump activists in January 2021, Apple and Google temporarily banned Parler, a network favored by the American far right, from their app stores.
Apple's rules require social networks to have strict moderation rules in place.
Since he bought Twitter for $44B at the end of October 2022, Elon Musk has reinstated several tens of thousands of accounts that he believed had been unjustly banned. This is notably the case of Marjorie Taylor Greene, elected representative of Georgia to the House of Representatives, whose account had been suspended because she was spreading misinformation about COVID-19. And Project Veritas, famous for its fake videos aimed at discrediting progressive groups.
The new Twitter boss also reinstated Donald Trump's account, but he did not return to the network, because his financial interests are before on the side of his own network Truth Social.
“If Twitter doesn't adhere to Apple and Google's guidelines, the consequences could be catastrophic,” noted Yoel Roth, the former chief security officer at Twitter who left the company after it was bought by Elon Musk, in an op-ed for The New York Times. “Twitter is in danger of being kicked out of their app stores, which would make it harder for billions of potential users to access the platform's services.”
Elon Musk denounces the “Apple tax”
Elon Musk points to the third area of contention: Apple levies between 15 and 30% of purchases made on apps in its store. This will weigh on the accounts of the social network if it draws more and more revenue from its subscriptions, in accordance with the project of the billionaire with his Twitter 2.0 vision.
But this battle against Apple and Google is far from being won for Elon Musk.
Epic Games filed a lawsuit against the group led by Tim Cook to try to escape this “Apple tax,” but this lawsuit ended instead in Apple's favor. Judge Yvonne Gonzalez-Rogers ruled that Apple's control over the App Store does not constitute a monopoly.
For Elon Musk, a long and expensive trial with Apple does not seem to be a winning strategy given Twitter's financial difficulties.
In the past, the billionaire has gone after the Cupertino giant. In 2015, he mocked it by calling it “Tesla's graveyard,” where underperforming employees would leave in search of better pay. According to “Power Play: Tesla, Elon Musk, and the Bet of the Century,” a book by American journalist Tim Higgins, Tim Cook had called Elon Musk to offer to buy Tesla. The co-founder of the car manufacturer told him yes, provided he was appointed CEO of Apple.
The one he wanted to replace would have hung up on him. As you can imagine, Elon Musk will not be able to count on Tim Cook to help him in his quest to make Twitter the super app of everything ...
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Perhaps Cook's recent capitulation was motivated by Musk's threat to bring his Tesla Phone to market immediately? Advertisers may not want to turn the world's richest man into the worl0s best known victim.
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