Another blow for Twitter’s ad business, with Microsoft announcing that it will be removing Twitter from its Digital Marketing Center management element, starting next week.
As first reported by Mashable, Microsoft is removing Twitter as an option from its digital management platform, which provides a cohesive way for businesses to manage their social media presence.
Microsoft’s Digital Marketing Center currently provides access to various tweet management capabilities, including scheduling and posting tweets, as well as ad management, within Microsoft’s integrated business platform. But now, Twitter will be dropped, which could see many Microsoft Business Suite users reduce their Twitter ad spend.
Microsoft hasn’t provided an official reason for its decision, but it’s believed to be related to Twitter’s updated API pricing, which will significantly increase the cost of accessing Twitter’s platform.
Though Twitter chief Elon Musk has provided his own reason:
They trained illegally using Twitter data. Lawsuit time.— Elon Musk (@elonmusk) April 19, 2023
Musk, who was an early investor in OpenAI, the creator of ChatGPT, has repeatedly expressed his annoyance that his $100 million ‘donation’ to the company has been used to transform it into a $29 billion business. And with Microsoft taking a large stake in OpenAI, and integrating ChatGPT into many of its tools, it too now stands to benefit – and Musk wants to get back his share of that revenue intake.
With this in mind, Musk is looking to restrict OpenAI’s access to Twitter data, which has been used to fuel its generative AI models, while also increasing how much it costs for companies to access the same. That seems to be what Musk is implying here, that Microsoft, as a beneficiary of OpenAI’s expansion, is profiting off Twitter data, which he’ll be looking to claw back.
Though as noted, that could also impact Twitter’s ad business. Last month, Musk noted that Twitter’s ad revenue has declined by more than 50% since he took over at the company, due to concerns around the app’s various rule changes, and the broader economic downturn.
And despite Musk culling 80% of Twitter staff to cut costs, and introducing new income pathways, via subscriptions, Twitter is still reliant on ad dollars to stay afloat, and any further impact could be major at this stage.
Still, many of Elon’s decisions seem to be driven by personal grievance, and he’s outright stated that the $44 billion that he paid for the platform will not factor into his thinking.
It seems like this could be another element that could impact Twitter’s bottom line – but maybe, if Musk can get some of that revenue back from AI developers, via increased API costs, and potentially litigation, that’ll make the risk here worth it.
But it’s another chapter in Twitter’s uneasy relationship with ad partners, which will remain a critical storyline for the app moving forward.