Elon Musk had a simple message Thursday for Twitter employees wondering how he plans to quintuple that company’s user base: We’ll just be more like WeChat.
Easy enough, right?
As Musk prepares to take the reins of Twitter—assuming he goes through with the $44 billion purchase—there’s no doubt that the Tesla CEO harbors grand ambitions for the company. By invoking WeChat, the Chinese super-duper app that’s become an indispensable tool for an estimated 1.3 billion users, Musk presaged moving Twitter well beyond its current utility as a social media platform. Twitter currently has about 200 million daily active users, a number Musk wants to raise to 1 billion.
Reaching WeChat-type heights, however, will require scaling hurdles never before toppled in the U.S., where rampant competition, wariness of centralized power, and regulatory roadblocks will make Musk’s aspirations all but impossible to attain.
Musk, of course, isn’t the first entrepreneur to envy the power of WeChat, which is owned by the Chinese tech conglomerate Tencent. While a few U.S.-developed apps and sites boast more daily users than WeChat, none have replicated its scope and ubiquity. WeChat users send messages, make payments, hail rides, order food, shop online, make doctor’s appointments, pay bills, and much, much more in the app.
Musk knows this all too well, given Tesla’s manufacturing footprint in Shanghai. In an all-hands virtual meeting Thursday with Twitter staff, his first since striking a deal in April to buy the company, Musk lavished praise on the app while discussing how to boost Twitter’s fortunes.
“You know, if I think of, like, WeChat in China, which is actually a great, great app, but there’s no WeChat movement outside of China,” Musk said, per Recode. “And I think that there’s a real opportunity to create that. You basically live on WeChat in China because it’s so useful and so helpful to your daily life. And I think if we could achieve that, or even close to that with Twitter, it would be an immense success.”
So what’s stopping Twitter, Facebook, Snapchat, or any other app from becoming America’s WeChat?
On the most basic level, the discussion begins and ends with the fact that none of these companies are located in China. Since WeChat’s debut in 2011, the Chinese government has propped up the app through subsidies and bans on foreign competitors. In return, Chinese officials have gained access to immense amounts of data, turning the app into a de facto surveillance tool for the autocratic regime.
Beyond that, any aspiring super app faces unrelenting competition from domestic and foreign rivals, some of which already have a stranglehold on the digital landscape.
Apple and Google, in particular, own a huge head start through the messaging tools, digital payments processors, and app stores integrated in their smartphone operating systems. As The Verge’s editor-in-chief, Nilay Patel, tweeted Thursday: “Elon Musk vs Mark Zuckerberg vs Evan Spiegel in the battle to build a WeChat-style superapp for the United States is going to be a delight because Apple will ruthlessly put all those features in iMessage first.”
What’s more, Twitter would need to succeed where Facebook parent Meta, a company with nearly 10 times the employee count, has largely failed.
Meta CEO Mark Zuckerberg outlined intentions about three years ago to make Facebook into a WeChat-like app, replete with “calls, video chats, groups, stories, businesses, payments, commerce” and other services. Facebook now offers many of those services, but none remotely approach the omnipresence of tools within WeChat. (Facebook’s daily active user count is up 25% globally since March 2019, but only 5% in the U.S. and Canada during that time.)
Even if Twitter succeeded at accumulating the cultural and technological cachet needed to emulate WeChat, there’s no guarantee regulators would tolerate such concentrated authority.
The Verge’s Alex Heath wrote in November that “the biggest risk to companies with super apps—or ambitions to become a super app—is the increasing scrutiny of the tech industry’s power.” Heath noted that regulators in the U.S. and Europe are “increasingly more critical of the biggest internet platforms,” and even China has “started forcing WeChat and other local firms to open up their platforms to rivals.”
You can’t blame Musk for setting his Twitter sights high. It’s certainly fair to question, though, whether his eyes are bigger than his stomach.
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That makes two. Cryptocurrency lender Babel Finance indefinitely suspended withdrawals and redemptions Friday morning, becoming the second such crypto firm to halt transactions in the past several days, CoinDesk reported. The Hong Kong–based financial services outfit, which reported about $3 billion in outstanding loans at the end of 2021, said “unusual liquidity pressures” prompted the shutdown. Celsius Network, which said it held $11.8 billion in assets as of last month, took the same step Sunday, prompting a dramatic selloff in cryptocurrency tokens. Reuters reported Thursday that securities regulators in at least five states have launched investigations into Celsius.
Turning down the volume. Samsung is taking steps to scale back on inventory and assembly amid concerns about the impact of inflation on consumer spending, Nikkei Asia reported Thursday. Sources told Nikkei Asia that the South Korean tech giant has slowed its orders and asked suppliers to delay shipping parts. The pullback spans multiple divisions of Samsung, including televisions, smartphones, and home appliances.
A quick hook. SpaceX executives have fired an undisclosed number of employees tied to a leaked letter criticizing CEO Elon Musk’s behavior, the New York Times reported Friday. In an email to staffers, SpaceX president and COO Gwynne Shotwell said the company “terminated a number of employees” who pressured coworkers into signing the letter. The authors wrote that Musk’s frequently crass Twitter commentary and the publication of a sexual harassment claim against him have become “a frequent source of distraction and embarrassment for us.” Musk denies the harassment allegation.
Fire up the plane? The U.K. government signed off Friday on a court order calling for the extradition of Julian Assange, putting the WikiLeaks founder one step closer to facing criminal espionage charges in the U.S., Bloomberg reported. Assange, currently held in a London prison amid the extradition battle, is expected to remain in the U.K. for now pending an appeal of the order. British officials agreed that Assange’s extradition would not result in oppressive, unjust, or abusive treatment, leading to their stamp of approval.
FOOD FOR THOUGHT
No wonder Jeff left. Amazon CEO Andy Jassy’s first year in the top job hasn’t been much fun. Since taking over for founder Jeff Bezos last July, Jassy’s main priorities have involved cutting costs and minimizing the pain of e-commerce overexpansion under his predecessor, the Wall Street Journal reported Thursday. While board members offered enthusiastic support for Jassy, the retreat stands in stark contrast to his history of quickly and successfully building out Amazon’s lucrative cloud-computing business. Sources told the Journal that Jassy has taken a more hands-on approach to managing Amazon’s e-commerce side, hoping to quickly turn the tide and reassure Wall Street.
From the article:
The company’s stock price has fallen by more than a third during Mr. Jassy’s tenure, erasing more than $600 billion in market value.
Now, Mr. Jassy and his team are working to sublease at least 10 million square feet of excess warehouse space, defer construction of new facilities on land Amazon has bought and find ways to end or renegotiate leases with outside warehouse owners. He has closed down much of the company’s bricks-and-mortar retail operation—68 stores—and is looking to pare back its head count.
“For this moment in our corporate history, he’s perfect,” said Amazon board member Jamie Gorelick in an interview.
IN CASE YOU MISSED IT
A major crypto hedge fund is wobbling as $10 billion Three Arrows Capital sees a spate of liquidations, by Taylor Locke
Disney’s business is booming—but CEO Bob Chapek is stumbling anyway, and insiders worry his tough leadership style is causing too much friction, by Nicole Gull McElroy
Hiring freezes sweep over tech as recession looms. That may do more harm than good, by Geoff Colvin
You think crypto winter has battered Bitcoin investors? Talk to a Bitcoin miner, by Sophie Mellor
The crash in crypto prices may be good news for at least one interest group: Gamers, by Nicholas Gordon
Tesla investor sues Elon Musk for fostering “toxic” workplace culture of discrimination and harassment, by Malathi Nayak and Bloomberg
BEFORE YOU GO
A power play. Three federal lawmakers want to unravel your tiresome tangle of charging cords. The Verge reported Friday that Senators Edward Markey and Elizabeth Warren, both Democrats from Massachusetts, and Sen. Bernie Sanders (I-Vt.) are calling on the Commerce Department to establish a universal charging standard for electronic devices. It’s the latest example of American policymakers cribbing off their European Union counterparts, who struck a deal last week that will eventually force companies selling portable devices in the bloc to outfit them with USB-C ports for charging. Commerce Department officials haven’t responded to the letter yet, but even if they don’t, the market might take care of the issue. Tech companies likely won’t manufacture products with different charging capabilities to sell just in the EU.
Note: Data Sheet will be off Monday in observance of Juneteenth. We will return Tuesday.
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