Elon Musk takes over Twitter
The news: Tesla and SpaceX CEO Elon Musk finally closed the $44 billion deal to take Twitter private but not before trying to back out of the deal and being sued by Twitter.
- The case was headed to the Delaware Court of Chancery, which has built a reputation for enforcing deal certainty in mergers.
- After a few embarrassing texts between Musk and his cronies were revealed as part of legal discovery, the world’s wealthiest person quickly resolved to close the deal at $54.20 per share.
- With a sink in hand, Musk took over Twitter in late October, dissolving the board and delisting the social media company from the New York Stock Exchange.
How it started: Musk’s desire to make Twitter profitable starts with its superusers.
- Verified Twitter accounts have to pay $8-$20 per month to maintain their blue check marks.
- Employees were told that they need to develop the verification subscription solution by November 7 or risk being fired.
How it’s going: Twitter soon sliced its headcount by half, firing 3,500 employees and then scrambling to rehire some that were critical to day-to-day operations.
- This was followed by a rush of newly verified accounts spoofing companies and celebrities and spreading misinformation.
- Advertisers paused their ads while longtime Twitter users looked to Mastodon, Tumbler, and other social apps to benefit from Twitter’s continued fallout.
The key takeaway: The world’s richest person now owns one of the largest platforms for real-time news and information.
Without the guardrails of a board or several key executives, Musk’s whims and ad-hoc changes to Twitter will have lasting effects as its users wrestle with possible replacements while value spirals.
2. Google backs out of gaming, axes Stadia
The news: Google pulled the plug on its Stadia gaming initiative in October, ostensibly as part of its “simplicity sprint.”
The miss: Stadia, which relied on Google Cloud to serve and stream games to devices like smartphones, Chromecasts, and PCs, could have been a revolutionary service, especially since it only required a controller because the heavy processing was being done in the cloud.
Video games were long thought to be recession-proof. The year started with a flurry of gaming acquisitions and consolidation that reinforced the notion that gaming could see unprecedented growth, particularly in cloud gaming and streaming and subscription services.
- Google could have leveraged its strength in the cloud as well as adapted various Android and PC games, but it was not to be.
- “We will be refunding all Stadia hardware purchases made through the Google Store, and all game and add-on content purchases made through the Stadia store. Players will continue to have access to their games library and play through January 18, 2023.”
- Google, which has gained infamy for the kilometric list of products and services it has killed, seems to have prematurely burned the cloud gaming bridge.
The key takeaway: With competitors like Microsoft, Amazon, and Meta expanding their own gaming services and platforms, it is only a matter of time before Google seeks to become a player in gaming.
Its ignominious Stadia retreat could hinder future collaborations and partnerships as well as alienate gamers who feel burned by the sting of Stadia’s demise.