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Featured January 20, 2023

Twitter Q4 Revenue Tumbles 35% as 500 Advertisers Suspend Spending

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Twitter Q4 Revenue Tumbles 35% as 500 Advertisers Suspend Spending

Twitter Inc’s fourth quarter revenues plunged about 35% year-on-year to $1.03 billion after advertisers held back spending following Elon Musk’s takeover of the microblogging site.

The revenue represents 72% of the company’s own targets for the quarter under review, tech publication The Information reported on Wednesday, citing Twitter senior executive for global sales and marketing Chris Riedy.

He expects first quarter revenue to come in at $732 million, down 39% from a year ago. News of falling revenues comes as Twitter faces an imminent finance charge of $13 billion.

Also read: Twitter Competitor Parler in Limbo After Massive Layoffs at Parent Firm

Over 500 advertisers halt spending on Twitter

On Jan. 17, the same publication revealed that more than 500 advertisers on Twitter pulled the plug on ad spending since billionaire Musk’s $44 billion takeover of the company in October last year. Companies have generally started to cut spending due to a range of macroeconomic difficulties.

It said a senior Twitter manager told employees that the firm’s daily revenue was 40% lower than the same day a year ago, implying that implied first quarter revenue would be around $720 million. Q1 revenue has now been projected to be a little higher, at $732 million.

Since taking over Twitter, Musk’s alleged overbearing management style and restructuring of the business that saw the sacking of top executives of the company, has unnerved advertisers. Elon Musk’s first interest payment on the company is due at the end of January.

“The lesson? Advertisers will not stop using social networks out of moral concerns over false information, the spread of fascism and racism, and their negative effects on young people. They will leave only when it hurts their advertising effectiveness,” commented marketing specialist Samuel J Scott on Twitter

Musk says things aren’t so bad

However, Musk insists things are rosy at the company since he took over. It is not just boastful claims, he said.

“Companies in general are missing the incredible opportunity that Twitter provides to reach customers. Just Tweet interesting things! That’s all it takes,” said Musk in response to one tweet that claimed U.S. automakers did not make money from Twitter advertising in 2022.

Data from Apptopia and Sensor Tower, independent research companies, shows that downloads and activity on Twitter have increased since Musk snapped up the business last year.

Downloads of the social network in the U.S. averaged around 125,000 a day during a recent 31-day period, a figure reflecting a 23% jump during the previous month and a 42% growth in the same period last year, according to Apptopia.

However, the growth was stunted outside the U.S with a 14% growth from the month ago period and 4% growth from a year earlier, Apptopia data showed.

Twitter relies on advertising for the bulk of its income. As such, ads accounted for more than 90% of its $5.1 billion in revenue in 2021. Of late, its clients, Audi and Pfizer, have halted ad spending after the Tesla boss’ $44 billion takeover.

Concerns over increased hate speech on the platform have seen advertisers withdrawing in their numbers. They have also been alarmed by a spate of impersonator accounts that flourished on the site after a botched relaunch of its blue tick scheme for verified users.

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Image credits: Shutterstock, CC images, Midjourney, Unsplash.

AI

Japan Leads the Way by Adapting Copyright Laws to the Rise of AI

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Japan Leads the Way by Adapting Copyright Laws to the Rise of AI

In a groundbreaking move, the Japanese government announced that copyrighted materials used in artificial intelligence (A.I.) training would not be protected under intellectual property laws, according to local media reports.

The Minister for Education, Culture, Sports, Science, and Technology, Keiko Nagaoka, confirmed this decision. Nagoka stated that it was applicable to A.I. datasets regardless of their purpose or source.

The policy shift was a response to the increasing significance of A.I. across various industries, including robotics, machine learning, and natural language processing. 

Japan aims to foster an open and collaborative environment by exempting A.I. training data from copyright restrictions to stimulate innovation and progress.

This move has sparked a global conversation about the evolving relationship between artificial intelligence and intellectual property rights, raising important questions about balancing innovation and copyright protection. 

A.I. training, copyright laws, and fair use policy

Japan’s decision to exempt A.I. training data from copyright laws has sparked global discussions on the delicate balance between intellectual property protection and A.I. advancements.

The Japanese copyright strategy is similar to the United States Fair Use Policy. The Fair use policy promotes freedom of expression by permitting the unlicensed use of copyright-protected works in certain circumstances. Most European countries also have an open policy toward using copyrighted materials in A.I. training.

Over the past months, several high-profile cases have involved A.I. training and copyright law. The U.S. House Judiciary Committee recently held a hearing examining the intersection of generative A.I. and copyright law.

Speaking at the committee hearing, Sy Damle, a former General Counsel of the U.S. Copyright Office, argued in support of the fair use policy, describing the use of copyrighted works to learn new facts as “quintessential fair use.”

How does this impact the A.I. industry?

Several experts have aligned with Japan’s notion that removing copyright barriers in A.I. training will expedite the development of innovative solutions, ultimately driving economic growth in AI-dependent sectors.

Additionally, the move could prompt a reassessment of copyright laws in other nations as governments grapple with the challenges presented by A.I. technology.

While its long-term impact remains uncertain, Japan’s bold step signifies a significant milestone in the global conversation surrounding A.I., copyright, and the necessary legal frameworks to support these emerging technologies reshaping our world.

Japan warns OpenAI about collecting sensitive data

Reuters reported that Japanese regulators had warned OpenAI against collecting sensitive information without people’s consent.

Japan’s Personal Information Protection Commission told the ChatGPT-creator to minimize its collection of sensitive data for machine learning, adding that it may take action against the firm if its concerns persist.

The warning is coming amid reports that over half of Japan’s population wants more stringent control of the A.I. sector. According to the report, there is widespread concern among the people about the general use of such tools.

Meanwhile, Japan is not the only country concerned about OpenAI’s data collection methods. Earlier in the year, Italy temporarily banned ChatGPT over privacy concerns.

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Twitter Now Worth Only a Third of Musk’s $44B Purchase Price

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Twitter Worth Only a Third of Musk’s $44B Purchase Price

It’s been almost seven months since Elon Musk acquired Twitter for $44 billion but the tech entrepreneur has failed to invigorate the company’s fortunes. Financial services corporation Fidelity now estimate the value of the app to stand at just 33% of Musk’s purchase price.

Musk completed his famous takeover of the microblogging site in October, fulfilling his long-term desire to be the boss of Twitter.

The tech billionaire was criticized for overspending on Twitter during the acquisition. Musk paid $44 billion for Twitter, with $33.5 billion in equity. However, Musk has also acknowledged he overpaid and said it was only worth half of what he paid.

“Myself and the other investors are obviously overpaying for Twitter right now. The long term potential for Twitter in my view is an order of magnitude greater than its current value,” said Musk.

Twitter was valued at $20 billion in March by Musk himself in an email that was sent to the company’s employees.

Twitter struggles under Musk

Following Musk’s takeover, many corporations and companies cut ties with the platform. Musk’s erratic decision-making and management style is blamed on driving a host of advertisers away.

Ford, General Motors, Volkswagen, General Mills, Mondelez, Pfizer, and United Airlines are among the major corporations that paused or pulled their advertisements from Twitter due to concerns regarding hate speech and conspiracy theories.

International ad and consulting firm Interpublic, which represents American Express, Coca-Cola, Fitbit, Spotify, and dozens of other major corporations, has also stopped advertising on the platform. That cut caused Twitter to lose $24 billion. Given the recent advertiser exodus it is unsurprising that Fidelity downgraded Twitter’s value – but it remains unclear exactly how they arrived at a final valuation.

In November, Fidelity initially decreased the value of its Twitter stake to 44% of the purchase price. This was followed by subsequent markdowns in December and February.

“In 2021, Twitter generated more than 4.5 billion U.S. dollars in advertising service revenues, up from 3.2 billion U.S. dollars in the previous year,” according to Statista.

Also Read: Six Months of Twitter Under the Rule of Elon Musk

Additionally, the micro-blogging platform produced around $571 million in data licensing revenue, up from $508 million 2020.

Insider Intelligence projected “that Twitter’s 2023 ad revenues would reach $4.74 billion worldwide.” However, since Musk took charge, the market research company has cut its projection by “nearly $2 billion, to just $2.98 billion, as the app grapples with brand safety issues, confusing policies, and broken technology.”

Twitter Blue: a flop card

Twitter Blue, a subscription-based verification checkmark with various features, remains one of the most popular changes in Musk’s brief tenure.

In November, the Tesla chief introduced a feature called “Blue for $8/month,” which brought a drastic change to Twitter’s policy by providing a verification checkmark known as a Blue tick.

This feature also offers additional benefits such as the ability to edit tweets, half-ads, longer tweets, text formatting, bookmark folders, NFT profile pictures, etc.

Interestingly, though, the change has been copied by Facebook and Instagram owner Meta, whose subscription service Meta Verified lets users add a blue checkmark to their accounts.

Musk faced accusations of charging its users to cover his $44 billion, which he invested to become the boss. Despite the criticism for removing legacy checkmarks from popular accounts, Twitter Blue generated $11 million on mobile in its first three months as a new product.

The amount it has generated is slightly lower than expected, as Twitter has 368 million monthly active users worldwide.

However, Twitter is adding more features to the paid verification badge as Musk tries to develop it as a flagship product under the Twitter umbrella.

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Mark Zuckerberg Unveils $500 Meta Quest 3 VR Headset

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Mark Zuckerberg Unveils $500 Meta Quest 3 VR Headset

Mark Zuckerberg has announced the new Meta Quest 3 virtual reality (VR) and mixed reality (MR) headset. The new version of the Quest will feature a higher-resolution display, a faster processor, and improved tracking, the Meta founder and CEO claimed.

In a blog post on Thursday, Meta revealed the headset also features a new design that is 40% thinner and more comfortable to wear compared to Quest 2, its predecessor. Quest 3 will be released later this year in over 20 countries, including the U.S., Canada, UK and Australia.

The 128GB headset starts at a price of $499.99 and users have the option to pay for more storage space. However, a lot more detail about the headset was left unannounced, including the full specifications of the chipset that will power it.

Zuckerberg said more information about the new Quest would be revealed at Meta’s “Connect” conference on Sept. 27. “Quest 3 will be the best way to experience MR and virtual reality in a standalone device. It’ll be compatible with Quest 2’s entire library…” he wrote on Instagram.

Virtual reality market heats up

The launch of Meta’s Quest 3 comes at a time when the virtual reality market is starting to heat up. Apple is reportedly working on its own headset that is expected to be launched on Monday during the company’s Worldwide Developers Conference.

Also read: 3 Top Headsets to Watch: Samsung XR Glasses, Meta Quest Pro, Apple Reality Pro

The headset is rumored to be similar to the Meta Quest 3 in terms of its focus on graphics and comfort. According to industry reports, it will be used for gaming and social features. Other companies such as Sony and Magic Leap, are also developing new virtual reality products.

Earlier this week, PC maker Lenovo announced that its enterprise-focused ThinkReality VRX headset had gone on sale with a starting price of $1,299.

Meta did not discuss Apple’s imminent headset launch. But the timing of Mark Zuckerberg’s reveal suggests it may have been scheduled to beat Apple to market. For a long time, Meta, formerly Facebook, has looked to VR and augmented reality as the next big thing in tech.

It is all part of Zuckerberg’s grand plan to build the metaverse, a virtual world where people can work, play, and socialize. Quest 3 will be a key part of that strategy. The headset is the “first” that can provide both virtual reality and mixed reality experiences in a single device.

Mark Zuckerberg Unveils $500 Meta Quest 3 VR Headset

This means users can fully immerse themselves in virtual worlds, or they can overlay virtual objects onto the real world.

“Ultimately, our vision is to…[go] beyond the rigid classifications of ‘virtual reality’ and ‘mixed reality’ to deliver truly next-gen experiences that let you effortlessly blend the physical and virtual worlds,” said Mark Rankin, Meta’s vice president of virtual reality.

“Meta Reality gives you both the deep, immersive magic of VR and the freedom and delight of making your physical world more fun and useful with MR. We’re excited to see what developers and creators can build on the Quest Platform…”

The Quest 3 upgrade

According to Meta’s blog post, the new version of the Quest is a significant upgrade over its predecessor, the Meta Quest 2. It features a higher-resolution display than Quest 2, meaning that images and videos will look sharper and more detailed.

The Quest 3 is powered by a Qualcomm Snapdragon processor, which Meta claims to be significantly faster and more powerful than the processor in Quest 2. Meta said the new chipset will allow for more immersive and realistic virtual realty experiences.

With a battery life of up to three hours, the headset comes with new controllers to help with how people can use it more effectively and efficiently. The new system is fully capable of AR gaming and users can still access over 500 VR games, apps, and experiences from Quest 2.

Mark Zuckerberg Unveils $500 Meta Quest 3 VR Headset

Meta said the Quest 2, which has been well received in the market since launch in 2020, will see its price drop to $299.99 from $400 starting June 4. The product will also receive software updates to boost performance and speed.

“Quest 2 remains our most affordable entry point to VR and [Quest] Pro is optimized for work use cases, with face and eye tracking for more authentic self-expression in meetings,” the firm said in its announcement.

“We’ll continue to sell Quest 2 and Pro alongside Quest 3, and we’ll keep shipping new software updates to make the Quest experience even better.”

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