CEO of Tesla Motors Elon Musk speaks at the Tesla Giga Texas manufacturing "Cyber Rodeo" grand opening party on April 7, 2022 in Austin, Texas. - Tesla welcomed throngs of electric car lovers to Texas on April 7 for a huge party inaugurating a "gigafactory" the size of 100 professional soccer fields. (Photo by SUZANNE CORDEIRO / AFP) (Photo by SUZANNE CORDEIRO/AFP via Getty Images)
Photo by Suzanne Cordeiro/AFP via Getty Images

Elon's new Twitter plan

Source Code

Good morning! The metaverse doesn’t yet exist, and we don’t even seem to have a very strong grasp on what it’s going to look like. Nick Statt will tell you all about that in a minute. But first, there's Elon Musk news. I'm Tim Grieve, and this isn't what I was planning to be doing this morning.

'I have moved straight to the end.'

When Parag Agrawal tweeted Monday that Elon Musk wouldn’t be joining Twitter’s board after all, he said: “I believe this is for the best.”

If his words sounded like polite spin on an ugly divorce, it turns out they were. What we know now that we didn’t know then: Musk turned down a seat on the Twitter board because he wants to buy the entire company. According to a new SEC filing, Musk has offered to buy all of Twitter for $54.20 per share in cash so that he can take the company private.

The clues were all there. Agrawal’s announcement Monday made it clear that he and the board had wanted to bring Musk inside only because they feared the damage he could do from the outside. As a board member, Agrawal said, Musk would be a “fiduciary of the company, where he, like all members, has to act in the best interest of the company and the shareholders.” That meant abiding by Twitter’s code of conduct and not attempting a whole takeover of the company.

So much for all of that. Here’s Musk’s you-can-keep-the-dog text to Twitter Board Chair Bret Taylor:

As I indicated this weekend, I believe that the company should be private to go through the changes that need to be made.

After the past several days of thinking this over, I have decided I want to acquire the company and take it private.

I am going to send you an offer letter tonight, it will be public in the morning.

Are you available to chat?

[VOICE SCRIPT]

1. Best and Final:

a. I am not playing the back-and-forth game.

b. I have moved straight to the end.

c. It's a high price and your shareholders will love it.

d. If the deal doesn't work, given that I don't have confidence in management nor do I believe I can drive the necessary change in the public market, I would need to reconsider my position as a shareholder.

i. This is not a threat, it's simply not a good investment without the changes that need to be made.

ii. And those changes won't happen without taking the company private.

2. My advisors and my team are available after you get the letter to answer any questions.

a. There will be more detail in our public filings. After you receive the letter and review the public filings, your team can call my family office with any questions.

Which is to say, your people can call my people.

In a follow-up letter, Musk told Taylor that this is his “best and final” offer, and if it’s not accepted, he’ll reconsider his role as a shareholder. But if there’s one thing we know about Elon Musk, nothing is ever really “final.” After all, he previously vowed to take Tesla private, then a few weeks later said never mind.

Meta’s plans to turn the metaverse into a money-making machine

Meta’s vision for the metaverse came into sharper focus this week, and it’s clear now that it’s going to be expensive — both for the company making these new technologies, products and platforms, and for the creators it is hoping to court.

Meta’s commission will be higher than Apple’s. The promise of the metaverse is not only about taking sci-fi concepts and bringing them to life. It’s also about building a better version of the internet we have today, or at least that’s what the Web3 evangelists keep saying. But Meta’s new metaverse take rate, revealed earlier this week as part of a new monetization push, doesn’t sound all that progressive.

  • The company said it will take close to half of a creator’s earnings on its proto-metaverse VR platform Horizon Worlds, when you include the standard 30% platform fee of the Quest Store and combine it with Meta’s newly announced 25% cut of whatever is left over.
  • Combined, that’s a 47.5% fee on digital goods, which will start with a limited selection of Horizon Worlds creators with a focus on avatar accessories and “paid access” to parts of the custom world, like a VIP section.
  • “The future of work is giving Meta 47.5% of your salary, apparently,” tweeted a popular NFT collector and crypto enthusiast who goes by the online handle “6529.”

The take rate is not all that unusual for gaming. The central issue here, it seems, is that most internet users are trying to apply the framework of other digital marketplaces to what is very much an unprecedented type of platform, with the only real comparison being video games like Minecraft and Roblox that rely on user-generated content.

  • Apple and Google take 30% of all digital goods on Android and iOS, which has over time earned them the ire of developers large and small and substantial antitrust scrutiny worldwide. OpenSea, meanwhile, takes just 2.5% of transactions, similar to credit card processing fees. Some competing metaverse platforms like Somnium Space take a 7.5% cut of aftermarket NFT sales.
  • Meta, on the other hand, is treating Horizon Worlds more like a video game platform that can’t exist without its creation tools and platform investment. Roblox, for instance, takes close to half of all digital sales, in part because it gives 30% of all revenue to Apple or Google. (Most Roblox users play on mobile.) Microsoft also takes roughly half of all Minecraft mod revenue.
  • Meta doesn't agree. “The sordid history of our industry has been lots of people monetizing on the backs of free content,” said Horizon Worlds chief Vivek Sharma in an interview with Casey Newton’s Platformer. “So I do think this is like a pretty material big step forward.”

Does Meta justify the cut? Clearly, some Web3 proponents don’t think so. And by the standards of most other digital marketplaces — including ones Meta has publicly railed against over high fees, like Apple’s — Horizon Worlds comes off as exploitative, which appears to be the exact opposite of the impression the company is trying to make.

  • Meta seems to want the best of both worlds. It wants to enjoy the popularity and lucrative nature of video games while also proclaiming its new platform is the beginning of a bold computing paradigm shift. Many players are OK with closed platforms in games, but few internet users seem to want an internet ruled by the social network formerly known as Facebook.
  • Meta is clearly trying to come up with a system that helps it recoup its mind-boggling investment. The company reported a $10 billion loss on its AR and VR efforts in 2021 alone, and CEO Mark Zuckerberg has repeatedly outlined the massive cost of his company’s shift toward the metaverse.
  • A new report from The Verge on Meta’s AR goals outlines an ambitious plan to launch best-in-class smart glasses alongside wrist-worn wearables to control them, all before Apple beats Meta to the punch. Clearly, Meta sees the hardware advantage as just as important as creating an enticing software platform, if not more so.

Taken together, Meta’s rather costly AR and VR investments and its approach to metaverse monetization give us our clearest indication yet of why Zuckerberg has reoriented his entire company around a nonexistent technology paradigm shift. If Meta owns the headsets and smart glasses, then it owns the platforms and stores. And if it owns the platforms and stores, it gets to set the rates.

If Meta sets up shop on the ground floor of the metaverse, before Apple arrives and before video game companies figure out a way to extricate themselves from their Big Tech landlords, then Meta has a pretty good shot at architecting a way out from under its declining social networking apps. Why then, if you’re a developer interested in AR and VR, would you want to build for Meta? That’s the pitch Zuckerberg and crew are going to have to make now, and it sounds like it’s going to be a tough sell.


—Nick Statt (email | twitter)

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People are talking

Brad Smith said companies shouldn’t resist conversations on tech regulation:

  • “The Europeans, the British, the Australians … they’re all moving forward. We’re going to be better served as a country if the United States plays an active role as well.”

Investor Blackwells Capital still wants Peloton to think about a sale:

  • “Issues related to cost structure, capital allocation, inventory management and quality control continue to plague the company.”

Making moves

Deezer is going public via a SPAC, sources told The Wall Street Journal. It’s the French music streaming service’s second go at an IPO, and its valuation is unclear.

IMDb TV is now called Freevee. Amazon’s free streaming service will also launch in Germany later this year.

Lambert Walsh is Amplitude’s first chief customer officer. Walsh most recently led customer success at DocuSign.

L. David Kingsley joined Intercom as its first chief people officer. He last held the same role at Alteryx.

Sequoia's Shailendra Singh left Zilingo’s board. A few others have quit the board as the company investigates its accounting practices.

Tu Nguyen is Sorare’s new CFO. Nguyen last worked in the same role at 1stDibs.

Peter Lacovara is Cloud to Street’s new head of Commercial. Lacovara most recently worked on alternative risk transfer at Marsh.

In other news

Gavin Newsom interfered with a lawsuit against Activision Blizzard, a state attorney alleged. The lawyer quit as a result.

Amazon is adding another surcharge for third-party sellers. Those who use the company’s fulfillment centers will need to pay another 5% to offset inflation and fuel costs.

Intel’s net zero goal is lacking. The company wants to cut its greenhouse gas emissions to net zero by 2040, but that plan leaves out Scope 3 emissions.

Give this story about Jack Dorsey’s bitcoin obsession a read. Dorsey’s interest in Block isn’t as much about the company as it is about bitcoin, sources told Bloomberg.

Wikipedia editors want the foundation to stop taking crypto, saying bitcoin and ethereum networks use up too much energy. The Wikimedia Foundation hasn’t said if it’ll comply with the request.

Google is dropping billions on offices. It’ll spend $9.5 billion this year on building and improving offices and data centers.

TikTok is thinking about a dislike button in the comments. Based on a screenshot of the feature, it looks like a thumbs down will show up next to the heart button.

What office perks would lure you back?

Companies have some … interesting ideas about how to get workers excited about the office. A marching band welcomed back Google workers; Qualcomm held a happy hour with its CEO; and Microsoft organized a beer and wine tasting. We want to know what would lure you back.

What in-office treats do you expect on your first day back at the office? Are you hoping for a live celebrity performance, or would a comedy show get you pumped? Are a few snacks enough? Respond to this email and let us know, and we’ll round up our favorites in the Sunday edition of Source Code.

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