#SocialStocks: Meta and Twitter Manage Implications of More Layoffs

Google goes to bat for Section 230 law, Meta tests subscription bundle and other notable stories from this week

Welcome to “#SocialStocks,” The Fly’s weekly recap of Wall Street’s reactions to social media stock news.

LAYOFFS: 

Meta Platforms (META) plans to cut thousands of jobs, despite CEO Mark Zuckerberg’s comments predicting no further layoffs, The Washington Post’s Naomi Nix reported. The company plans to push some leaders into lower-level roles, flattening layers of management, according to the report. However, Andy Stone of Meta Communications tweeted: “The @washingtonpost got this one wrong. With all due respect, @loriamontgomery, @cpassariello, @markseibel, @laurastevens, how do you run a story with a headline/storyline that is contradicted by the reporting in the very same story – as well as previous reporting?”

Twitter (TWTR) laid off dozens of sales and engineering staff last week as CEO Elon Musk demanded the site’s ad targeting work like Google (GOOGL) search ads in one week, The Verge’s Alex Heath reported. Laid off employees included one of Musk’s direct reports who was managing engineering for Twitter’s ads business, according to company sources. Heath noted that Musk has done at least three rounds of layoffs since his pledge in November that layoffs were over.

BROADENING HORIZONS: 

Gamelancer Media has broadened the scope of its current media partnership with technology company, Snap (SNAP). With numerous popular short-form video programs currently hosted on Snapchat’s Stories page within the Discover feed, Gamelancer Media aims to include additional programs and creator partnerships through the deepened engagement across its 29 Snapchat channels.

STOCK SALE: 

In a regulatory filing, Meta Platforms disclosed that its COO Javier Olivan sold 13.3K shares of common stock on February 17th in a total transaction size of $2.27M.

EARNINGS RECAP: 

Sprout Social (SPT) beat analyst expectations in its fourth quarter earnings report. The company noted annual recurring revenue was $296.6M, up 32% from last year. “We are pleased with another exceptional quarter, anchored by record net new ARR, which we believe sets the foundation for accelerating ARR growth in 2023,” said Justyn Howard, Sprout Social’s CEO and co-founder. “We achieved multiple new high water marks in both new business and expansion, led by outstanding new business momentum in the enterprise. Our pricing changes are performing well, our partnerships are strengthening and social has never been more critical to our customers.” In addition to the beat, the company provided first quarter and full-year guidance. 

GOOGLE DEFENDS SECTION 230: 

Google will go before the U.S. Supreme Court this week to defend Section 230, a law that gives internet platforms legal immunity for almost all third-party content hosted on their sites, John McKinnon of The Wall Street Journal reported. A decision to limit that immunity could scramble business models of the largest internet companies, especially social media platforms such as Instagram, TikTok, and YouTube. Republican and Democratic lawmakers worry the immunity law has helped spread the promotion of harmful content to vulnerable groups. The supreme court case, Gonzalez v. Google, was brought by the family of an American college student who was killed during the 2015 Paris terrorist attacked. The plaintiffs allege YouTube failed to take down some ISIS terrorist videos and recommended them to users, which they argue makes Google liable for damages under the Anti-Terrorism act.

QUEST 2 IN CHINA: 

Tencent (TCEHY) is seeking to be China’s exclusive seller of Meta’s Quest 2 headsets, The Wall Street Journal’s Raffaele Huang and Newley Purnell reported. According to people familiar with the matter, Tencent has proposed to Meta that it become the exclusive seller of the VR headset in China, and has sought to publish Chinese versions of existing videogames for the device. The discussions between the companies are still at an early stage, the people say, adding that issues that would need to be addressed include how user data would be handled.

FACEBOOK FENDS OFF LAWSUIT: 

Facebook on Monday temporarily fought off a collective lawsuit valued at up to $3.7B over allegations the social media giant abused its dominant position to monetize users’ personal data, Reuters’ Sam Tobin reported. However, a London tribunal gave the proposed claimants’ lawyers up to six months to “have another go” at establishing any alleged losses by users, the author added.

EVERYBODY’S DOING IT: 

Meta Platform’s Mark Zuckerberg announced that, “we’ll begin testing a new offering called Meta Verified, a subscription bundle on Instagram and Facebook that includes a verified badge that authenticates your account with government ID, proactive account protection, access to account support, and increased visibility and reach. We’re starting with a gradual test in Australia and New Zealand later this week to learn what’s most valuable, and we hope to bring Meta Verified to the rest of the world soon. Some of the top requests we get from creators are for broader access to verification and account support, in addition to more features to increase visibility and reach. Since last year, we’ve been thinking about how to unlock access to these features through a paid offering. With Meta Verified, you’ll get: A verified badge, confirming you’re the real you and that your account has been authenticated with a government ID. More protection from impersonation with proactive account monitoring for impersonators who might target people with growing online audiences. Help when you need it with access to a real person for common account issues. Increased visibility and reach with prominence in some areas of the platform- like search, comments and recommendations. Exclusive features to express yourself in unique ways. Meta Verified is available for direct purchase on Instagram or Facebook in Australia and New Zealand starting later this week. People can purchase a monthly subscription for (USD) $11.99 on the web and (USD) $14.99 on iOS and Android. As we test and learn, there will be no changes to accounts on Instagram and Facebook that are already verified based on prior requirements, including authenticity and notability. Long term, we want to build a subscription offering that’s valuable to everyone, including creators, businesses and our community at large. As part of this vision, we are evolving the meaning of the verified badge so we can expand access to verification and more people can trust the accounts they interact with are authentic.”

SUBPAR: 

Meta gave roughly 10% of staff subpar ratings in recent performance reviews and cut a bonus metric to 85% of its target, The Wall Street Journal’s Salvador Rodriguez and Jeff Horwitz reported. Meta’s leadership expects the ratings to lead more employees to leave in the coming weeks, according to people familiar with the matter, who add that the company will consider another round of layoffs if not enough depart.

TIKTOK TRIVIA: 

TikTok’s statement from earlier on Thursday, said in part: “We’re bringing a whole new experience to the TikTok community, with five-days of interactive TikTok Trivia presented by Lionsgate and John Wick Chapter 4. Starting February 22, you can tune into the official @TikTok account to participate in trivia challenges and interact with host, actor, and TikTok creator James Henry, known for his creative skits and quirky videos. “Game shows and trivia have been a part of popular culture for years, and I’m thrilled to work with TikTok to bring this engaging entertainment format to TikTok LIVE. TikTok Trivia has the power to bring people together, creating an electrifying atmosphere filled with excitement and a shared sense of community,” said James Henry. Starting on Thursday,February16, anyone 18 years or older in the US can register for TikTok Trivia by clicking on a trivia widget on the For You feed, searching for #TikTokTrivia, or by going to the @TikTok account to participate in real-time interactive trivia. Each day will feature opportunities to win cash, and during the activation, you’ll see fun surprises and integrations from Lionsgate and John Wick Chapter 4. Make sure to join the trivia session on time, so you don’t miss out on some fun John Wick questions and teasers, a chance to win a share of the $500k prize pool, and stay tuned after each trivia session for recommendations of entertaining and interactive LIVE creators to check out..

BROADCAST CHANNELS: 

Broadcast channels, powered by Messenger, are a public, one-to-many messaging tool for creators to directly engage with their followers at scale. “We’re always exploring new ways to help creators directly reach their audience and form deeper connections with their communities. Mark Zuckerberg announced broadcast channels on Instagram with his own “Meta Channel Broadcast channels are a public, one-to-many messaging tool for creators to invite all of their followers into and engage with their most interested fans. Creators can use broadcast channels as a casual, quick way to keep followers up-to-date. They can use text, photo, video and voice notes to share their latest updates and behind-the-scenes moments and even create polls to crowdsource fan feedback. Only creators can send messages, while followers can react to content and vote in polls. In the coming months, Instagram will be adding more features, such as the ability to bring another creator into the channel to discuss upcoming collabs, collect questions for an AMA via question prompts, and more – the possibilities for connecting with fans are endless, and we can’t wait to see how creators begin using their channels,” noted the company in Messenger News.

SNAP MAUS: 

At the company’s investor day, Snap CEO Evan Spiegel said its app now has over 750M users per month, up over 25% from the 600M monthly users 10 months ago. For the year through April 2022, the monthly count rose 20%, the company said.

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Originally Posted February 22, 2023 – #SocialStocks: Meta and Twitter manage implications of more layoffs