Musk's desperate plea to bring back advertisers

Tuesday, 17 January 2023

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Good morning!

Elon Musk could not do it. With all his bragging to revamp Twitter, increase its users, bring back old users that have left the platform over what critics have called "a liberal slant" by its content moderator team, whilst making a ton of money for the platform, it turns out even for Musk, it was a feat to difficult to accomplish.

Fans of the serial founder had thought that CEOs of social media companies should be able to make decisions concerning content moderation. They were naive. The power, Musk must realise, lies in the hands of the people.

But Musk will not admit that his tactics so far have been wrong. Already, he is trying to distance himself from these decisions, shopping for a new CEO who might take responsibility for them, as advertisers exit the platform in protest as he reactivated suspended accounts of users who have used what activists have called "hate speech."

Now, in a desperate plea to advertisers, he is offering free ads to major customers. One will think he will just suspend those accounts back and publicly apologize for his lack of judgement. But alas, this is Elon Musk, the genius founder.

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Below are the tech stories and news you need to know to start your day, carefully curated by Technext.

Summary of the news

Kenya's Kwara has raised $3 million
YouTube’s testing free ad-supported TV channels
Microsoft is reportedly going to face a new EU antitrust warning over its Activision deal
Twitter is offering free ads to bring advertisers back on the platform
MTN said it will challenge Ghana’s new $773 million tax bill

Kenya's Kwara raises $3 million

Kwara, a Kenyan fintech digitizing credit union, has announced that it has raised $3 million in seed funding, alongside a deal to acquire IRNET, the software subsidiary of the National Union of all savings and credit cooperative societies in Kenya, Technext reports.

It has also signed an exclusive distribution deal for digital solutions with the Kenya Union of Savings and Credit Cooperatives (KUSCCO), the national umbrella body for SACCOs in Kenya.

The seed funding round was led by some existing investors, DOB Equity, Globivest, and Willard Ahdritz, the founder of Kobalt Music. New investors that also joined the round included One Day Yes, Base Capital, and fintech executive Mikko Salovaara, the CFO of Revolut.

"We think we’ve barely scratched the surface in the Kenyan market. And so, we are just going to be really investing in products and services that deepen our relationship here," Kwara co-founder and CEO, Cynthia Wandia said.

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YouTube’s testing free ad-supported TV channels

YouTube is testing free ad-supported TV channels that show content from certain media companies, according to a report from the Wall Street Journal.

The concept is similar to services like Pluto TV, Roku’s Live TV channels, or the experiences built into TVs from companies like Samsung, LG, and Vizio — there will be a “hub” that lets you pick what you want to watch.

The concept has been part of a profitable business model for some of the other companies in the space, as earnings reports from Vizio and Roku show that they make more profit from advertising and commissions on subscriptions than they do from selling hardware, The Verge reports.

The most recent reports showed Vizio (PDF) pulls in an average of $27 annually per user, while Roku (PDF) manages to net more than $44 per year.

An unnamed YouTube spokesperson confirmed the tests to the Journal, and the report says the feature could roll out more widely this year. It’s reportedly working with companies like Lionsgate and A&E, with the latter being the owner of channels like History, FYI, and Lifetime.

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Microsoft reportedly to face new EU antitrust warning

Microsoft is likely to receive an EU antitrust warning about its $69 billion bid for "Call of Duty" maker Activision Blizzard, people familiar with the matter said, that could pose another challenge to completing the deal, Reuters reports.

The European Commission is readying a charge sheet known as a statement of objections setting out its concerns about the deal which will be sent to Microsoft in the coming weeks, the people said.

The EU antitrust watchdog, which has set an April 11 deadline for its decision on the deal, declined to comment.

Microsoft said: "We're continuing to work with the European Commission to address any marketplace concerns. Our goal is to bring more games to more people, and this deal will further that goal."

The U.S. software giant and Xbox maker announced the acquisition in January last year to help it compete better with leaders Tencent and Sony.

Twitter desperately offers free ads

The Wall Street Journal reports that Twitter seeks to bring business back by offering free ad space. Since Elon Musk bought Twitter for $44 billion, the social media giant has been bleeding advertisers, according to the Entrepreneur.

The WSJ cites emails it reviewed in which Twitter said it would match ad spending to the tune of $250,000, with the catch that the full half-million dollars worth of ads run by the end of February.

The incentives are the latest effort by the company to get brands to spend on its platform. Recently, Twitter offered advertisers $500,000 in free ads as long as they spent at least $500,000, the WSJ reports.

Ad buyers said that the incentive could be used to buy promoted tweets that run during Super Bowl week, a key selling period for Twitter. Advertisers in recent years have flocked to Twitter during the Super Bowl to generate buzz around their big game marketing efforts. The Super Bowl is Twitter's biggest revenue day of the year, the Journal has reported.

MTN to challenge Ghana’s $773 million tax bill

Barely a week after its Ghanaian subsidiary got slammed with a back-tax bill of around $773 million, there are strong indications that MTN Group won’t throw in the towel until it resolves the matter amid ongoing talks with the country’s authorities, Technext reports.

According to Reuters, Ghana Revenue Authority (GRA) had said the hefty fine — which comprises penalties for non-disclosure and interest charges — is for unpaid tax obligations for the years 2014 to 2018, claiming that MTN Ghana underreported its revenue by about 30% during the period,

But in a statement issued on January 13, the parent company disputed the “accuracy and basis” of the assessment, which it said was conducted based on a new methodology to track call data records on the advice of a third-party consultant. The telecoms giant added it would fight the unpaid taxes claims.

“MTN Ghana believes that the taxes due have been paid during the period under assessment and has resolved to defend MTN Ghana’s position on the assessment vigorously. MTN Group and MTN Ghana will continue to engage with the relevant authorities on this matter and MTN remains resolute that MTN Ghana is a tax-compliant corporate citizen,” part of the statement read.

Per Bloomberg, Ghana’s tax agency, in a statement on Monday, said its audit of MTN Ghana’s books adhered to “the principles of fairness and transparency”. The GRA said while the telecoms giant has received numerous tax compliance awards in the past, “these do not in any way prejudice the conduct of audits as required by law”.

However, Chief Executive Officer Ralph Mupita insisted that the GRA’s “methodology was applied retroactively” without prior notice, adding, “We strongly dispute this and will defend our position.”

Latest in funding

Kwara raises $3M, acquires IRNET Coop to increase the growth of SACCOs in Kenya