Social Media has come a long way since the early days of Facebook and Twitter. But recent years have seen some cracks developing in their monopoly on the Social Media scene. The fact that Twitter could censor the words of a sitting President offended First Amendment advocates who in turn tried to form alternatives like the Social Media platform Parler. However, because of the broad reach of established hosting platforms, they soon realized that what they thought they owned was really just rented, and their virtual landlords at Apple Cloud communications company Twilio could unilaterally terminate service to Parler.
Other alternatives to traditional Social Media have also tried to spring up over the years, including YouTube, WhatsApp, Messenger, Snapchat, Pinterest, Reddit, WeChat, Instagram, TikTok, and QQ. Although there appears to be enough competition to prevent monopoly control, a closer look might prove useful. It seems that once a platform achieves any level of success, it is gobbled up by one of the big boys.
For instance, Steve Chen, Chad Hurley, and Jawed Karim launched YouTube, in 2005. But just a year later, Google acquired it for $1.65 BILLION! It would be near impossible for three ordinary guys to turn down that much money. Eight years later, in 2014, Facebook acquired WhatsApp for more than ten times as much, i.e., approximately $19.3 BILLION. Microsoft acquired LinkedIn in 2016, Messenger, aka Facebook Messenger, is owned by… well, it’s obvious. Facebook also owns Instagram.
Pinterest, although privately owned, is an App and is thus subject to banning in the APP stores as Parler was. And Reddit was acquired by Condé Nast in October 2006.
TikTok is a Chinese company shrouded in controversy, having been banned in India due to “privacy concerns”. Trump attempted to have it banned in the U.S. due to security concerns, but was blocked by the courts. Pakistan also banned it due to Pornography concerns but then changed its mind. Oracle will serve as TikTok’s partner to provide cloud hosting and thus could choose to shut it down under the right circumstances.
Snapchat went public in March of 2017 on the NYSE and might be less affected by social pressure, but then again, it might not. Snapchat is 13.2% owned by the Chinese tech giant Tencent Holdings Limited which also owns WeChat and QQ. One of the common concerns about Chinese companies is the control the Chinese government exerts over them and the possibility of Chinese spying they enable.
Social Media Changes Coming in 2022
Technological change has been accelerating, and Social Media is no exception. In 2022 we expect several upheavals, some of which have already been announced, and we expect to see more changes as the year progresses.
Facebook’s Metaverse
As we mentioned last week, Facebook has announced its intention to become more than just a Social Media application as it is transitioning to the “MetaVerse” where you can live in an alternate reality and become your own “avatar”. You can clothe your avatar in the latest fashions and drive an imaginary sportscar for a fraction of the cost of the real thing. Your avatar can date other people’s imaginary characters and never have to actually meet in person. As the metaverse progresses, you may never have to leave home. Your avatar may be able to order a Pizza, resulting in a robot-delivered actual physical pizza arriving at your door that you can eat while sitting in your mother’s pizza box cluttered basement.
ClubHouse
In an effort to differentiate itself, Clubhouse has chosen a different direction from highly visual apps like Pinterest, TikTok, or Snapchat. To capitalize on the popularity of podcasts, Clubhouse has chosen an all-audio format, excluding all visuals except for a profile photo. Similar to LinkedIn, once you gain access to the app, you can follow friends and groups. Groups are called “Clubs” and have a theme based on a central topic, such as business, hobby, lifestyle, music, etc. Clubs can host their own rooms, where discussions are held. Discussions can be recurring weekly rooms or “one-offs”.
Interestingly, you can’t just decide to become a Clubhouse member but instead must be “invited” by an existing member. LinkedIn has a similar system where you could invite others to join your “network,” but LinkedIn doesn’t exclude you from overall LinkedIn membership without an invitation.
Trump Media & Technology Group
To combat the virtually monolithic Social Media control, former President Donald Trump has been working on creating an independent social media platform. The new platform won’t rely on Google or Apple for its hosting services. And thus, it will be somewhat insulated from the threat of shutdown that Trump suffered under the hands of Twitter and that Parler suffered under Google/Apple. Trump is hoping to have Trump Media & Technology Group (TMTG) up and running during the first quarter of 2022 under the direction of Rep. Devin Nunes (R-Calif.), who is expected to resign from Congress.
However, at this point, it is unclear what the TMTG Social Media platform will look like or how it will function. Trump is partnering with video hosting platform Rumble because they “do not discriminate against political ideology.” According to Wikipedia, “Rumble is a Canadian online video platform headquartered in Toronto. It was founded in 2013 by Chris Pavlovski, a technology entrepreneur from Canada. Rumble’s monthly user count has experienced rapid growth since July 2020, from 1.6 million monthly users to 31.9 million by the end of the first quarter of 2021… A lot of Rumble’s traffic is referred from Parler.” Rumble hosts channels from various sources, including America’s Funniest Home Videos, Newsmax, One America News Network (OANN), and Reuters. In August 2021, Rumble announced deals with former Democratic Representative Tulsi Gabbard and The Intercept founder Glenn Greenwald.
In a move similar to Clubhouse, TMTG has already launched “Truth Social” on the Rumble Cloud for invited guests only. Rumble agreed to go public earlier this month, with an implied $2.1 billion valuation.
Trump Media and Technology Group (TMTG) plans to go public via a merger with a special purpose acquisition company, Digital World Acquisition Corporation (DWAC). The merger with TMTG won’t occur until sometime in 2022, at which point DWAC shares effectively become TMTG shares. This merger must still be approved by the SEC before it can happen. Before the merger announcement, DWAC shares traded around $10, and on October 22nd, shot up to $94 are currently trading at around $53. if the merger fails due to SEC intervention, it could easily go back to being a penny stock.
Note: Some people mistrust “special purpose acquisition companies” because they start out as basically a “shell corporation” with no assets, but are listed on public exchanges thus creating a shortcut to exchange listing.
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Photo by Sara Kurfeß on Unsplash
