is ceding control of Ant Group Co., capping a tumultuous period for the Chinese fintech giant.
Mr. Ma will no longer be the controlling person of Ant, the company said in a statement on Saturday, confirming a previous report by The Wall Street Journal.
The changes are being made to reduce Ant’s reliance on the flamboyant Chinese billionaire, who co-founded
Alibaba Group Holding Ltd.
BABA 2.70%
and helped create Ant, the Journal reported previously.
Mr. Ma will continue to hold voting rights in an entity that controls Ant, alongside nine Ant executives and employees who will be also given voting rights.
Mr. Ma doesn’t hold an executive role at Ant or sit on its board, but is a larger-than-life figure at the company. He has controlled Ant via an entity in which he holds the dominant position. The agreements that allowed Mr. Ma’s dominance will be terminated. The nine other Ant executives and employees to be given the voting rights at the company can exercise their power independently of each other and of Mr. Ma, according to Ant’s statement.
Ant, which owns the popular digital-payment platform Alipay, has been forced to overhaul its operations amid a government crackdown that began with Beijing calling off the company’s multibillion-dollar initial public offering in November 2020. The IPO, which had been slated to happen in Shanghai and Hong Kong concurrently, would have raised more than $34 billion and valued Ant at more than $300 billion.
Ant has been revamping its various business lines, from consumer lending to insurance, and will eventually become a financial holding company subject to regulations in line with traditional financial firms.
The change of control moves Ant a step closer to finishing its overhaul. Yet it also could put back a potential revival of Ant’s IPO for a year or more. Chinese securities regulations require a timeout on public listings for companies that have gone through a recent change in control.
Regulators didn’t demand the change but have given their blessing, the Journal reported previously. Ant is required to map out its ownership structure when it applies to become a financial holding company.
The nine others who will hold voting rights include Chairman
Eric Jing,
Executive Vice President Xiaofeng Shao and Chief Technology Officer Xingjun Ni, in line with the details in the previous Journal report. Mr. Shao is also the general secretary of Ant’s Communist Party committee, according to people familiar with the matter. Mr. Ni was instrumental in founding Alipay in 2004.
Mr. Ma has all but vanished from the public spotlight since he laid into Chinese regulators in a controversial speech days before Ant’s planned IPO in 2020. He retired from Alibaba in 2019 but continued to control Ant. The two companies that Mr. Ma co-founded have been charting separate courses in light of Beijing’s crackdown on big internet platforms.
Mr. Ma’s control over Ant goes back more than a decade to the period when he was CEO of Alibaba. Throughout the years, he had contemplated giving up control of Ant out of corporate-governance concerns that risks may arise from Ant being too reliant on a single dominant figure atop the company, the Journal reported previously.
com Inc.’s layoffs will affect more than 17,000 employees, according to people familiar with the matter, the highest reduction tally revealed in the past year at a major technology company as the industry pares back amid economic uncertainty.
The Seattle-based company in November said that it was beginning layoffs among its corporate workforce, with cuts concentrated on its devices business, recruiting and retail operations. At the time, The Wall Street Journal reported the cuts would total about 10,000 people. Thousands of those cuts began last year.
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The rest of the cuts will bring the total number of layoffs to more than 17,000 and will be made over the coming weeks, some of the people said. As of September,
Amazon
AMZN -0.79%
employed 1.5 million people, with a large percentage of them in its warehouses. The layoffs are concentrated in the company’s corporate ranks, some of the people said.
Amazon
was one of the biggest beneficiaries of the Covid-19 pandemic as customers flocked to online shopping. The rush to Amazon’s various businesses, from e-commerce to groceries and cloud computing, pushed forward years of growth for the company. To keep up with demand, Amazon doubled its logistics network and added hundreds of thousands of employees.
When demand started to wane with customers moving back to shopping in stores, Amazon initiated a broad cost-cutting review to pare back on units that were unprofitable, the Journal reported. In the spring and summer, the company made targeted cuts to bring down costs, shutting physical stores and business units such as Amazon Care. Amazon later announced a companywide hiring freeze before deciding to let employees go.
Many tech companies have cut jobs as the economy sours. Amazon’s layoffs of more than 17,000 employees would represent the highest number of people let go by a tech company in the past few months, according to tallies released on Layoffs.fyi, a website that tracks the events as they surface in media reports and company releases.
The trend has affected companies such as Amazon and others that have acknowledged they grew too quickly in many cases.
Facebook
parent
Meta Platforms Inc.
said it would cut more than 11,000 workers, or 13% of its staff, adding to layoffs at
Lyft Inc.,
HP Inc.
and other tech companies. On Wednesday,
Salesforce Inc.
said that it was laying off 10% of its workforce. Co-Chief Executive
Marc Benioff
said the business-software provider hired too many people as revenue surged earlier in the pandemic. “I take responsibility for that,” he said.
Write to Dana Mattioli at dana.mattioli@wsj.com and Jessica Toonkel at jessica.toonkel@wsj.com
‘s immense wealth and borrowing power are now being tested as the
Tesla Inc.
TSLA -1.76%
shares that have fueled his fortune have sharply declined while he rushes to stabilize his massive personal investment in Twitter Inc.
The auto maker’s share value has nosedived 18% this week alone and more than 60% since he announced his plan to buy Twitter.
His ability to use his shares at Tesla to raise money, by selling or borrowing against them, has been complicated by their rapid downdraft in recent months.
Historically, Mr. Musk has been a cash-poor billionaire, depending upon so-called margin loans—borrowing backed up by his shares—for his personal expenses and business investmentswhile holding on to his Tesla shares and benefiting from their rising value.
But Tesla’s market value has fallen by about $700 billion this year, sinking his personal wealth along the way. The decline in Tesla’s valuation comes after years of growth that has allowed him to easily borrow money without having to cash out his shares.
Shares in Tesla have fallen around 65% in 2022, dinged, in part, by the higher interest-rate environment. Another issue relates to the reason he may need cash: Twitter. Tesla investors have been concerned that Mr. Musk’s attention is divided following his October takeover of the social-media company.
Late last year, just as Tesla’s stock price peaked, he began selling Tesla shares, totaling more than $39 billion including $3.5 billion last week. What his liquidity is like is unknown after what he said would be a more than $11 billion tax bill for 2021 and putting up roughly $25 billion in cash as part of buying Twitter.
Mr. Musk’s current Tesla holdings, not including exercisable options, total 424 million shares worth about $52billion at Friday’s closing price of $123.15 a share.
Simply put, if he could tap all of those shares as collateral under Tesla’s rules, he would be allowed to borrow about $13 billion. That is only a bit more than he planned to borrow in April as part of the original Twitter deal using just 40% of his shares as collateral, underscoring how his borrowing power has shrunk with the collapse of the car company’s share price. He later scrapped those proposed margin loans to fund the deal amid investor concerns over the risk.
A Tesla launch in Bangkok earlier this month.
Photo:
Vachira Vachira/Zuma Press
Mr. Musk and Tesla didn’t respond to a request for comment.
Tesla shares aren’t his only asset or only avenue to raise money. He also holds shares in Space Exploration and Technologies Corp., or SpaceX, and has ownership in startups such as the Boring Co. His level of personal indebtedness isn’t clear.
Mr. Musk is facing questions about whether Tesla, where he is also chief executive, is ready for a recession as he separately tries to stem losses at Twitter, cutting thousands of workers from his newly acquired social-media platform. Late Tuesday, he said drastic spending cuts at Twitter were required as the company was on track to bleed billions of dollars. His team had been seeking additional investment dollars for Twitter.
“We have an emergency fire drill on our hands,” Mr. Musk said during a public talk on Twitter Spaces. After taking those drastic efforts, he said, Twitter could break even next year.
While Twitter has rarely been profitable in the past decade, itsfinances were made more challenging by the debt Mr. Musk took on to fund his acquisition and by a decline in spending by advertisers worried about the erratic changes occurring under his leadership. Analysts estimate the debt expenses alone have added more than $1 billion in cost annually to a company that last year generated $5 billion in sales, mostly from ads.
Mr. Musk has been here before—mired in debt and burning cash as the global economy teeters—and emerged successfully.
Those successes and investor enthusiasm for his ventures made him rank as the world’s richest person for a time.The drop in Tesla’s value this year sent Mr. Musk’s ranking as the world’s richest man to No. 2 behind
Bernard Arnault,
the chairman and chief executive of luxury conglomerate LVMH Moët Hennessy Louis Vuitton. Mr. Musk’s fortune fell to an estimated $140 billion as of Thursday from a high of $340 billion a little more than a year ago, according to the Bloomberg Billionaires Index.
If he needs cash, Mr. Musk could always sell more Tesla shares, as he did recently. But, in the past, Mr. Musk, Tesla’s largest individual shareholder, has been reluctant to sell. At Tesla, Mr. Musk lacks the kind of dual class of stock ownership that gives founders at
Meta Platforms Inc.
or
Alphabet Inc.
controlling power. Instead, Mr. Musk’s large stake in Tesla, in the past,has effectively given him veto power over shareholder proposals thanks to the company’s supermajority vote requirement.
On Thursday, Mr. Musk said he sold some stock to make sure he had “powder dry…for a worst-case scenario” and said that he was done selling until probably 2025, though he’s made similar statements like that this year only to sell more.
“I’m somewhat paranoid having gone through two really intense recessions,” Mr. Musk said.
While he had used margin loans before, the idea of borrowing billions off the backs of Tesla shares to help Twitter carries risks.
Tesla’s board of directors has limited his borrowing power to essentially 25 cents on every dollar of share value, according to regulatory filings. As the shares fall in value, he must comply with the 25% limit. The risk to Tesla shareholders, as the company describes in its regulatory filings, is that he may have to unload a lot of shares at once to generate cash. He has never disclosed at what price he would need to pony up more collateral.
In recent days, Mr. Musk has swatted down the idea of margin loans altogether. In a tweet, Mr. Musk cautioned that such a move was unwise in this market. “When there are macroeconomic risks, it is generally wise to avoid using margin loans on any company, as stocks may move in ways that are decoupled from their long-term potential,” he wrote on Dec. 8.
As of the most recent public filing, Mr. Musk had pledged as collateral more than half of his Tesla holdings, excluding options he could exercise.
Pledging doesn’t necessarily indicate that actual borrowing against those shares has occurred, the filing said.
the college student whose Twitter account tracking Elon Musk’s private jet was suspended, is back on the social-media platform with a new jet-tracking account.
Mr. Sweeney, a University of Central Florida sophomore, created @ElonJetNextDay Thursday evening, he said. It follows the same set up as his original account, @ElonJet, except it shares the whereabouts of Mr. Musk’s private jet with a 24-hour delay instead of in real-time.
“I’m kind of surprised it’s made it this far, to be honest,” Mr. Sweeney said on Friday. “For now, it doesn’t automatically post to Twitter. I’m copying it from my Discord account and posting it to Twitter 24 hours later.”
Mr. Sweeney’s initial jet-tracking account was suspended Dec. 14 by Twitter. A message posted on the @ElonJet account said it was suspended for violating Twitter’s rules. The account had about 500,000 followers.
Mr. Musk, who bought Twitter in a deal valued at $44 billion in October, said that real-time posting of people’s locations isn’t allowed under the platform’s policies.
He later said his family had been endangered and he was pursuing the matter further.
Mr. Musk tweeted at the time that “Posting locations someone traveled to on a slightly delayed basis isn’t a safety problem, so is ok.”
Twitter posted updated guidance on its website about the sharing of private or live location information. It said sharing publicly available location data “after a reasonable time has elapsed” isn’t a violation. However, “If your account is dedicated to sharing someone’s live location, your account will be automatically suspended,” it said.
Twitter didn’t immediately respond to a request for comment on Mr. Sweeney’s new account.
Mr. Sweeney said he hadn’t heard from Twitter regarding his still-suspended @ElonJet account. It tracked Mr. Musk’s private jet using public data from plane transponders that log longitude, latitude and altitude. In 2020, Mr. Sweeney created an algorithm that calculates the whereabouts of a private jet belonging to Mr. Musk.
The @ElonJetNextDay account shares the whereabouts of Elon Musk’s private jet with a 24-hour delay.
Photo:
Kurt Desplenter/Zuma Press
“There’s been no communication at all,” he said.
Mr. Sweeney also ran automated Twitter accounts tracking planes owned by Russian oligarchs and aircraft associated with Russian President Vladimir Putin. The @PutinJet and @RUOligarchJets accounts, which were created after Russia invaded Ukraine earlier this year, were also suspended, along with @CelebJets, an account run by Mr. Sweeney that tracked the jets of celebrities.
Mr. Sweeney said he is still tracking Mr. Musk’s jet in real-time on other social-media platforms, but he won’t link to them on @ElonJetNextDay in an effort to comply with Twitter’s latest guidelines.
Mr. Sweeney said he believes his new account is in compliance with Twitter’s policies.
“We’ll see what happens,” he said.
Write to Ginger Adams Otis at Ginger.AdamsOtis@wsj.com
SpaceX is gearing up for a key test of its immense rocket that is designed for commercial launches, as well as the Mars mission
Elon Musk
has long sought.
Near a beach east of Brownsville, Texas, employees at Mr. Musk’s space company are preparing for the inaugural orbital flight of Starship, the towering rocket system the company has been developing for years to one day launch into deep space. The initial test mission would last around 90 minutes, beginning with a fiery blast of the ship’s booster over the Gulf of Mexico, SpaceX has said in a regulatory filing.
It isn’t clear when SpaceX will attempt the first flight, after dates Mr. Musk has discussed came and went. Some officials at the National Aeronautics and Space Administration, a customer for a version of Starship, previously said they thought the mission could occur in early December.
A SpaceX Falcon 9 rocket lifted off this month with a payload of 40 satellites for OneWeb’s broadband-satellite network.
Photo:
John Raoux/Associated Press
Mr. Musk, who acquired Twitter Inc. and recently delivered Tesla Inc.’s first all-electric semitrailer trucks, has described getting Starship into orbit as one of his main goals. At SpaceX, which Mr. Musk founded in 2002 and still leads, he has said the rocket system is consuming significant resources and faces formidable technical hurdles.
The company is using new engines it developed on Starship and wants to be able to quickly and rapidly reuse the vehicle, akin to how airlines operate planes. Starship is also really big: Fully stacked, it stands taller than the rocket NASA recently used on its first Artemis moon mission.
“There’s a lot of risks associated with this first launch, so I would not say that it is likely to be successful, but I think we’ll make a lot of progress,” Mr. Musk said last year, during an appearance before a National Academies of Sciences, Engineering, and Medicine panel.
A spokesman for Space Exploration Technologies Corp., as the company is formally called, didn’t respond to requests for comment.
SpaceX’s Starship program has encountered setbacks on shorter-altitude flights, and it isn’t clear how much it would cost if something similar happened on an orbital mission.
Japanese billionaire Yusaku Maezawa plans a journey around the moon on Starship.
Photo:
philip fong/Agence France-Presse/Getty Images
The company’s strategy of accepting potential failures, and learning from them, has helped it develop spacecraft like Falcon 9, the workhorse rocket the company used on almost 60 launches this year through mid-December, former employees said.
“It’s better to lose them now than to lose them because you left data on the table, because you were too scared to have a failure in public during the development phase,” said Abhi Tripathi, who worked in several director roles at SpaceX and currently serves as mission operations director at the University of California-Berkeley Space Sciences Laboratory.
At SpaceX, “risk taking, as long as it is safe to personnel and to property, is highly encouraged,” Mr. Tripathi said.
Jeff Bezos
‘ space company Blue Origin LLC is also working on its own large rocket, as is United Launch Alliance, the launch company jointly owned by
Boeing Co.
BA 0.53%
and
Lockheed Martin Corp.
SpaceX’s Starbase launch site in Texas.
Photo:
ADREES LATIF/REUTERS
If it works, SpaceX’s vehicle would lower the cost to get to orbit and give the company a sophisticated new rocket system, Mr. Musk said earlier this year. If it doesn’t, the program could threaten to become a money pit for a company that already has two proven rockets—Falcon 9 and Falcon Heavy—that are partially reusable, according to space-industry analysts and executives.
NASA is a major backer for Starship, providing deals valued at more than $4 billion to use a moon-lander version of the vehicle for Artemis exploration missions. Senior agency officials have said the company has been meeting milestones under its contract.
Technology entrepreneur Jared Isaacman and the Japanese billionaire
Yusaku Maezawa
have both said they purchased flights using the vehicle. A Japanese satellite operator said in August that it would use Starship to deploy a company satellite.
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Starship is made up of a 230-foot-tall booster called Super Heavy that would power a 164-foot-tall spacecraft, also called Starship, into orbit, according to SpaceX. The latter ship is designed to carry cargo or crew, with a user’s guide touting room for up to 100 people. The spacecraft is designed to be refueled in orbit, enabling longer-distance flights, according to company and NASA presentations.
SpaceX is spending heavily on the Starship program, according to space industry analysts. The privately held company has raised significant funds lately, selling at least $6.1 billion in stock over the past three years, according to securities filings. SpaceX recently began marketing employee shares for sale at a price that would value the company at around $140 billion.
Mr. Musk has warned that SpaceX could face bankruptcy if a severe global recession made capital and liquidity difficult to obtain while the company was investing in Starship and Starlink, its satellite-internet business.
Technical challenges with new rockets are common. In July, the company had to deal with a fiery blast underneath one of the Super Heavy boosters, though last month SpaceX said it completed a significant engine test. SpaceX also has lost Starship prototypes. Two years ago, a Starship spacecraft flew a short-altitude test flight without a booster, but smashed into the ground when trying to land.
In May 2021, the company landed a Starship spacecraft for the first time after another short flight.
For the first orbital test, SpaceX expects to bring the booster down in the Gulf of Mexico and land the Starship spacecraft in the Pacific Ocean, near a Hawaiian island, according to a company filing with the Federal Communications Commission.
Jeff Thornburg, a former SpaceX propulsion executive, said the company’s biggest challenge is ensuring the Starship spacecraft can safely return to Earth. The vehicle will endure enormous stress and heat as it re-enters the atmosphere from orbit, he said, but is designed to be used quickly and repeatedly.
“Reusability brings a lot of complicated engineering, because it can’t just survive once. It’s got to survive 10, 20, 100 plus times,” he said.
After months of delays, the FAA released its long-awaited environmental assessment of SpaceX’s South Texas Starbase launch site. WSJ’s Micah Maidenberg explains what the decision means for SpaceX and the company’s Starship program going forward. Photo Illustration: Alexander Hotz/WSJ
Write to Micah Maidenberg at micah.maidenberg@wsj.com
team has reached out for potential fresh investment for Twitter Inc. at the same price as the original $44 billion deal, according to one shareholder who said he was contacted about the proposal.
Ross Gerber,
president and CEO at Gerber Kawasaki Wealth & Investment Management, said a representative for Mr. Musk contacted him about offering more shares Thursday.
Mr. Gerber said his firm had previously put up less than $1 million to back Mr. Musk’s takeover of Twitter, which was completed in late October at a price of $54.20 per share.
Semafor earlier reported the new outreach to investors.
Elon Musk has warned of dire financial challenges facing Twitter, the social media company he took over for $44 billion in October. WSJ’s Mark Maurer explains how the company is trying to fix its finances and avoid a potential bankruptcy. Photo Illustration: Laura Kammermann
Twitter didn’t immediately respond to a request for comment.
Additional equity investments would likely dilute existing Twitter shareholders. The potential extent of the dilution from the latest fundraising effort couldn’t immediately be determined.
Mr. Musk this week sold more than $3.5 billion worth of
Tesla Inc.
TSLA -4.72%
stock. It was his second round of sales since buying Twitter Inc. Mr. Musk sold nearly 22 million Tesla shares over a three-day period ended Dec. 14, according to a regulatory disclosure made public Wednesday.
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Mr. Musk’s ownership of Twitter has gotten off to a tumultuous start. Last month, Mr. Musk said Twitter had suffered “a massive drop in revenue” and was losing $4 million a day. He later invoked the specter of bankruptcy.
As part of the acquisition, Twitter took on around $13 billion in debt. That could leave the social-media company owing annual interest payments of more than $1 billion, analysts have estimated, compared with around $51 million in 2021.
Mr. Musk’s focus on Twitter has irritated some Tesla investors as the company tracks for its worst annual stock-price performance on record.
Mr. Gerber said he was reviewing the proposal, but had some questions about how Twitter was being run. Those include how long Mr. Musk intended to act as chief executive and any transition plan, he added.
Last month, Mr. Musk said he expects to find someone else to run Twitter, without giving a specific timeline for when the appointment might happen.
Twitter has been in turmoil since Elon Musk took over. To get a sense of what’s going on behind the scenes, The Wall Street Journal spoke with former Tesla and SpaceX employees to better understand how Musk leads companies. Illustration: Ryan Trefes
Mr. Gerber, who also is an investor in Mr. Musk-run electric car maker Tesla Inc., said he wasn’t concerned about how Twitter is doing so far, but said he wanted more communication. “I think they just need to be clear with everybody about what’s going on. Not just with Twitter, but Tesla,” he said.
Several Tesla investors, including Mr. Gerber, have expressed frustration recently that Mr. Musk’s involvement in Twitter might be to the detriment of the auto maker. Tesla’s stock is down more than 57% this year.
Mr. Musk on Friday tweeted that “Tesla is executing better than ever” and that he had earlier that day gone over production progress at the company’s plant in Texas.
Cloud gaming is an emerging technology that allows people to stream videogames to nearly any internet-connected device, similar to how movies and shows are viewed on
Netflix,
Hulu and other streaming platforms.
The business model being developed alongside cloud gaming is a subscription service, where consumers get to play a catalog of games for a flat monthly or annual fee. With cloud gaming, players can avoid downloading games to their devices, which takes up memory, and they don’t need to invest in hardware such as a console or high-end computer.
The FTC and videogame industry participants anticipate cloud gaming will become a much larger part of the market in years to come. With its lawsuit, the FTC says it is protecting the videogame-distribution market—as it is today and how it is expected to evolve—from being dominated by a few companies.
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Microsoft is an early leader in cloud gaming with its Xbox Game Pass subscription service. The company’s $75 billion deal forActivision would bolster its content library, adding several blockbuster franchises including “Call of Duty,” “World of Warcraft” and “Candy Crush Saga.”
Microsoft, which has pledged to fight the FTC’s suit, has said it is an underdog in the existing console market, with Xbox’s position trailing
Sony Group Corp.’s
PlayStation and
Nintendo Co.
’s Switch. The company doesn’t disclose Xbox sales by volume.
Shoppers are seeing more out-of-stock messages than ever, but inventory tracking websites like HotStock and Zoolert are giving people a better chance of finding the hot-ticket products they’re looking for. Here’s how those websites work. Illustration: Sebastian Vega
The technology giant has also said that it has no meaningful presence in mobile, the biggest corner of the overall videogame industry by revenue.
Apple Inc.
and
Alphabet Inc.’s
Google, makers of the predominant smartphone operating systems, play a critical role in how people access mobile games, and they take a cut of developers’ in-app and subscription sales.
Xbox Game Pass, which Microsoft launched in 2017, offers a library of hundreds of games for subscribers to play starting at $9.99 a month. The basic plan allows subscribers to download individual games on their Xbox or PC to play whenever they want. For $14.99 a month, subscribers can play some of thosegames via the cloud, all part of Microsoft’s ambitions to build a “Netflix of gaming.” The company in January said Game Pass had 25 million subscribers.
Global consumer spending on cloud-gaming services and games streamed via the cloud will reach a combined $2.4 billion by the end of this year, according to an estimate from Newzoo BV. That is a tiny fraction—1.4%—of the $184.4 billion in overall spending on videogame software.
Sony, which has aggressively lobbied governments around the world to oppose the Microsoft-Activision tie-up, and others have attempted to grow their own cloud-gaming subscription services. Microsoft, for now, is the dominant player, accounting for 60% of the overall cloud-gaming business last year, according to an estimate from research firm Omdia.
Microsoft is an early leader in cloud gaming with its Xbox Game Pass subscription service.
Photo:
etienne laurent/Shutterstock
The FTC appears concerned that it “can’t see the unintended consequences even just a few years down the road for an acquisition like this,” said
Paul Swanson,
a Denver-based antitrust lawyer at Holland & Hart LLP. “What they’re saying here is we’re going to err on the side of preserving as many independent competitors as we can.”
Over the past decade, Microsoft has poured billions into its cloud operations primarily for selling software and infrastructure for enterprise customers. It is now building out a separate cloud infrastructure to power its videogaming ambitions, which have been under development since it launched its first Xbox console in 2001.
Cloud gaming hasn’t been an easy business to navigate. The technology is difficult for companies to execute smoothly because games need to support multiple players with minimal delay regardless of where players are located. Earlier this year, Google shut down its game-streaming service, Stadia, after struggling to gain traction with users.
Microsoft remains heavily invested in its Xbox hardware, but cloud gaming gives it an opportunity to reach more gamers. It wants to build its own mobile app store, a move it says would create more competition in mobile videogames, not less. The Redmond, Wash., company has argued that Apple and Google’s app marketplaces have policies that pose technical and financial barriers to its goals.
Representatives for Apple and Google didn’t respond to requests for comment. Apple has said that it doesn’t prevent cloud-gaming apps from appearing in the App Store and that it isn’t trying to block their emergence.
Industry researcher and academic
Joost van Dreunen
said Microsoft’s mobile move would likely benefit the videogame ecosystem by diminishing Apple and Google’s grip.
Microsoft has said it is an underdog in the console market, with Xbox trailing consoles such as Nintendo’s Switch.
Photo:
Guillaume Payen/Zuma Press
“It breaks down the so-called walled-garden strategy that has dominated the game industry for 20 years,” he said.
Since Microsoft announced its deal for Activision, which it values at nearly $69 billion after adjusting for the developers’ net cash, some videogame players have been concerned about what it means for industry competition.
Steve Schweitzer of State College, Pa., is worried that Microsoft will raise the price of Game Pass over time. He said that it is affordable now but that in a few years, if Microsoft becomes more dominant, it could bump up the price and start cutting back on quality. Mr. Schweitzer, 55 years old, said he remembers back in the 1990s when Microsoft was able to use its market power to capture market share in the browser wars. “I’ve seen this game before,” he said.
Before its lawsuit, the FTC had been reviewing the deal for months. Regulators in other jurisdictions, including the European Union and the United Kingdom, are doing the same. The company has gained approval for the deal in smaller markets such as Brazil and Saudi Arabia.
Write to Sarah E. Needleman at sarah.needleman@wsj.com and Aaron Tilley at aaron.tilley@wsj.com
Meta Platforms Inc. has long given unfair deference to VIP users of its Facebook and Instagram services under a program called “cross check” and has misled the public about the program, the company’s oversight board concluded in a report issued Tuesday.
The report offers the most detailed review to date of cross check, which Meta has billed as a quality-control effort to prevent moderation errors on content of heightened public interest. The oversight board took up the issue more than a year ago in the wake of a Wall Street Journal article based on internal documents that showed that cross check was plagued by favoritism, mismanagement and understaffing.
Three years ago, YouTubers who go by Vlad, Niki, Diana and Nastya were friends cruising around Miami on a 97-foot yacht to celebrate a birthday. Today, they are locked in a fierce rivalry over YouTube supremacy.
They’re not even 10.
The children are stars of three YouTube channels—“Vlad and Niki,” “Like Nastya” and “Kids Diana Show.” They are the three most popular live-action YouTube kids channels in the world, with nearly 300 million YouTube subscribers between them. Now they’re expanding into everything from streaming shows to branded toys to licensing deals, all worth tens of millions of dollars.
“‘These kids who came from nowhere have more influence than Mickey Mouse.’ ”
“These kids who came from nowhere have more influence than Mickey Mouse,” says Eyal Baumel, a longtime strategist for YouTube personalities, including “Like Nastya.”
Across the three channels, the videos play like live-action cartoons in a suburban fantasy land. Kids dress up like superheroes, crawl over giant vegetables and drive around in motorized toy cars. Mom and dad are sidekicks.
The more success the kids have found, the swankier the toys and outings have become. In one video, Vlad and Niki snub mom and the Range Rover she bedecked in fluffy pink boas for a ride in dad’s hot red Ferrari.In another video from this year, the “Kids Diana Show” hits the road, staying in a resort in Maldives where the kids and parents hop aboard a yellow submarine.
Videos feature lots of “oohs,” “aahs,” applause and minimal dialogue—which makes it easy to redub the YouTube posts, which are mostly in English, into other languages including Arabic, Spanish or Indonesian.
“Kids feel that Vlad and Niki are their friends,” says their mother, Victoria Vashketov, of her children, who are 9 and 7 years old, respectively.
Toy makers pay the young celebrities to play with their products. Rates can range anywhere from $75,000 to more than $300,000, according to a person familiar with such deals.
The YouTubers also have exclusive lines of playthings branded with their names and likenesses. There’s a caped Vlad action figure and palm-sized figurines of Diana’s entire family, which can be purchased at big U.S. retailers like
Walmart
and Target as well as in countries including Sweden and Mongolia, according to the channels’ representatives.
Shenzhen, China-based Zuru Toys produced a specialty line of “Vlad and Niki” toys after entering into a partnership with the family in 2020. The company’s co-founder,
Nick Mowbray,
says he got into business with the boys because they have appeal globally.
The Youtube awards the Vashketov family has received are on display in their home just outside Miami.
Major streaming services are putting the videos on platforms including HBO Max and Amazon too.
“You can create a global franchise without a major studio,” says Dan Weinstein, who represents “Vlad and Niki” under the banner of his company Underscore Talent and has helped other internet sensations cross over to traditional media channels. “I think that’s pretty mind-blowing to think about.”
Timing is everything
Around the time that Vlad, Niki, Diana and Nastya were toddlers, iPads were becoming the new babysitters and videos featuring toddlers unboxing new toys on camera were taking over children’s content on YouTube.
Among the young personalities that began influencing consumer behavior was Evan from EvanTubeHD, a toy and gaming YouTuber who started posting videos featuring Angry Bird toys when he was 5 years old and became one of the first kid YouTubers to achieve stardom on the platform. Ryan Kaji—often hailed as the reigning kid king of YouTube—was reviewing popular toys like Thomas the Tank Engine and raking in millions. They created a formula for the kinds of videos that could rack up millions of views: Give a cute kid a coveted name-brand toy, film them playing with it, then post.
The three families leaned into that formula.
Vlad and Niki’s parents started making videos out of their home in Moscow. Sergey Vashketov was a midlevel executive at a food manufacturer; Victoria, a former gymnast. Early videos, which are in Russian, show Vlad and Niki guzzling bottles of
Coca-Cola
and frolicking with life-size bags of M&Ms and Skittles.
Nastya, whose full name is Anastasia Radzinskaya, comes from Krasnodar, Russia. Her parents say they started posting videos of their daughter on YouTube to show off her speaking skills after a doctor falsely diagnosed her with cerebral palsy and said she might never speak. Some of Nastya’s first videos show her playing with Legos and opening a
Disney
-themed mystery egg.
Diana’s parents—Olena and Volodymyr Kidisyuk—started making videos out of their home in Kyiv, Ukraine, training their camera on their daughter and older brother Roma, who played with popular toys in videos like Peppa Pig, Hot Wheels and Play-Doh.
Each of the three channels began humbly, staging the videos in basic locations like at the kitchen table or in a local park, shooting with smartphones and employing very little, if any editing. After videos began racking up millions of views on YouTube, the parents saw an opportunity to create a business around them, and they began investing in making more polished videos involving more extravagant locations and toys. The more popular the videos, the more often YouTube’s algorithm recommended their posts to kids.
Eventually, the families moved from Ukraine and Russia to sunnier spots like Dubai and Thailand that allowed for filming outdoors year round. About four years ago, the three families met in Miami and began a friendship, according to Ms. Vashketov. Nastya, who was having a birthday party, invited Vlad, Niki and Diana. Through the years the families have hosted several other birthday parties together, filming their kids playing together while the lucky birthday boy or girl opens mountains of flashy new toys.Birthday videos also perform really well on YouTube, says Ms. Vashketov.
Traveling to amusement parks and going on vacation also often feature in videos. Between them, the three families have filmed and posted videos from places like Thailand, Italy, Hawaii and the French Alps. They’ve also spent time together in Dubai where two of the families lived full time for a spell.
Luck and timing were important. So too were analytics, said Mr. Weinstein, who has been advising digital creators like the Vashketovs for more than a decade.
YouTube helps creators build their audiences by providing data-driven tools that can analyze how their videos perform and help plan their content. That includes knowing what YouTube audiences are searching for, what the creator’s viewers are searching for, when they are on YouTube, other channels that the audience watches and other data points. It allows creators to engage in their own brand of A/B testing, tweaking each nuance of a channel’s presentation to see how it might impact viewership, including the color scheme, titles for the videos and even what types of thumbnail photos impact viewership.
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“Sergey and Victoria are voracious students of YouTube and content creation,” said Mr. Weinstein.
Today, the families have teams of people working behind the scenes.
“Vlad and Niki” has a film crew of up to five people at a time, including location scouts, camera operators and people to help secure props. They also work with people to help translate videos for their foreign-language channels, a mobile-gaming applications design team and an assistant who helps manage social media.
The Kidisyuks signed with pocket.watch, a company that helps YouTube kids and family creators build franchises around their channels, including additional branding and merchandising opportunities, consumer products, mobile gaming and the development and licensing of additional content. Pocket.watch represents more than 30 kids and family creators, including Ryan Kaji.
The Vashketovs recently bought a $12.5 million, eight-bedroom mansion.
Hollywood studios have taken interest too.
Nastya’s team is developing an animated series with Will Smith’s production company, Westbrook.
Netflix
has shown interest in the series and talks are ongoing, according to a person familiar with the matter.
HBO Max spent seven figures licensing “Vlad and Niki” content for its service, according to another person, who added that the streamer is considering producing two scripted shows including an animated series based on the two boys.
Netflix and HBO Max didn’t respond to requests for comment.
Diana and Roma starred in a promotional video for Paramount’s recent “Paw Patrol” movie and at one point hadcontent available on both Amazon Prime and
Roku.
The sister and brother duo also have an animated YouTube series featuring Diana’s alter ego, Princess of Play, sparring with her nemesis Boris the Baron of Boredom.
Competition
With such lucrative deals up for grabs, the rivalry among the channels has intensified over the years, causing the families to drift apart, according to people close to the families.
Competition is especially stiff between Diana and Nastya, who both appeal to girls. The two are neck and neck on YouTube. Nastya currently has 102 million subscribers while Diana has 104 million. Sometimes battles erupt between merchandising partners fighting over things like prime shelf space at major retailers, said one person.
Vlad and Niki’s mom says she sometimes will check to see how well Nastya or Diana videos have performed. But Victoria Vashketov plays down the competitiveness: “As parents, we all get along, and all the kids enjoy playing together.”
The families also share a brewing dilemma. Soon, their kid stars will grow into adolescents, perhaps too old to be making videos for preschoolers.
Vlad already has an eye on the future, saying he dreams of following in the footsteps of YouTube’s top creator, MrBeast, who regularly produces elaborate contests or challenges he posts to his channel. Additionally, Mr. Weinstein is lining up opportunities for Vlad and his brother to get into the music business, hiring producers and songwriters who have worked with both Justin Bieber and Selena Gomez to help put together some original songs.
For now the Vashketovs are enjoying being settled right outside Miami, something that helps give the boys consistency with school, the parents say. They recently bought a $12.5 million, eight-bedroom mansion located in the swanky town of Golden Beach.
And the Vashketovs say their kids can stop making videos any time they want. “Our inspiration really comes from Vlad’s and Niki’s interest,” says Sergey. “If we try to do something that they are not into, it doesn’t look authentic.”
As Vlad gets older, his 3-year-old brother Christian may step in. Ms. Vashketov says, even though Christian has appeared in several videos already, there are no plans to create a channel for her youngest son. That also goes for the baby girl Ms. Vashketov gave birth to in September.
move to purge Twitter Inc. employees who don’t embrace his vision has led to a wave of departures among policy and safety-issue staffers around the globe, sparking questions from regulators in key jurisdictions about the site’s continued compliance efforts.
Scrutiny has been particularly close in Europe, where officials have in recent years assumed a greater role in regulating big tech companies.
Staff departures in recent days include dozens of people spread across units such as government policy, legal affairs and Twitter’s “trust and safety” division, which is responsible for functions like drafting content-moderation rules, according to current and former employees, postings on social media and emails sent to work addresses of people who had worked at Twitter that recently bounced back.They have left from hubs including Dublin, Singapore and San Francisco.
Many of the departures follow Mr. Musk’s ultimatum late last week that staffers pledge to work long hours and be “extremely hardcore” or take a buyout. Hundreds or more employees declined to commit to what Mr. Musk has called Twitter 2.0 and were locked out of company systems. That comes after layoffs in early November that cut roughly half of the company’s staff.
Twitter conducted another round of job cuts affecting engineers late Wednesday, before the Thanksgiving holiday in the U.S., people familiar with the matter said. The exact scope couldn’t be immediately learned, though some of the people estimated dozens of employees were let go.
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Twitter sent fired engineers an email saying their code wasn’t satisfactory and offering four weeks of severance, some of the people said. Some other engineers received an email warning them to improve their performance to keep their jobs, the people said.
Ireland’s Data Protection Commission said this week it was asking Twitter whether it still had sufficient staff to assure compliance with the European Union’s privacy law, the General Data Protection Regulation, or GDPR. The company last week told the Irish data regulator that it did, but is still reviewing the impact of the staff departures, a spokesman for the Irish regulator said.
He said Twitter has appointed an interim chief data protection officer, an obligation under the GDPR, after the departure of Damien Kieran, who had served in the role but left shortly after the first round of layoffs.
In France, meanwhile, the country’s communications regulator said it sent a letter last Friday asking that Twitter explain by this week whether it has sufficient personnel on staff to moderate hate speech deemed illegal under French law—under which Twitter could face legal orders and fines.
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The staff departures come as Twitter holds talks with the EU about the bloc’s new social-media law, dubbed the Digital Services Act, which will apply tougher rules on bigger platforms like Twitter by the middle of next year.
Didier Reynders,
the EU’s justice commissioner, is slated to attend a previously scheduled meeting with Twitter executives in Ireland on Thursday. He plans to ask about the company’s ability to comply with the law and to meet its commitments on data protection and tackling online hate speech, according to an EU official familiar with the trip.
Věra Jourová, a vice president of the EU’s executive arm, said she was concerned about reports of the firing of vast amounts of Twitter staff in Europe. “European laws continue to apply to Twitter, regardless of who is the owner,” she said.
Mr. Musk has said that he would follow the laws of the countries where Twitter operates and that it “cannot become a free-for-all hellscape.”
Twitter didn’t respond to a request for comment.
Late Wednesday, Mr. Musk tweeted that the number of views of tweets he described as “hate speech” had fallen below levels seen before a spike in such views in late October. “Congrats to the Twitter team!” Mr. Musk wrote.
Some of the people who either departed or declined to sign on to Twitter 2.0 appear to include Sinead McSweeney, the company’s Ireland-based vice president of global policy and philanthropy, who led government relations and compliance initiatives with regulations worldwide, as well as the two remaining staffers in Twitter’s Brussels office.
Ms. McSweeney and the two Brussels employees declined to comment, but emails to their work addresses started bouncing back undeliverable in recent days according to checks by The Wall Street Journal. Four other Brussels-based employees were earlier this month told they were being laid off, according to social-media posts and people familiar with the matter.
Twenty Air Street, London, the home of Twitter’s U.K. office.
Photo:
Dan Kitwood/Getty Images
Damien Viel, Twitter’s country manager for France, was also among a wave of staffers who posted publicly this week that they had left the company. He declined to comment when reached by the Journal.
At least some of the departures occurred in teams that reported to
Yoel Roth,
Twitter’s former head of trust and safety, who resigned earlier this month. In an op-ed for the New York Times, Mr. Roth said he resigned because Mr. Musk made it clear that he alone would make decisions on policy and the platform’s rules and that he had little use for those at the company who were advising him on those issues.
The team included Ilana Rosenzweig, who worked as Twitter’s senior director and head of international trust and safety. She has left the company, according to her LinkedIn profile. Based in Singapore, Ms. Rosenzweig led Twitter’s trust and safety teams across Europe, the Middle East and Africa, along with Japan and other Asia-Pacific countries, according to her profile.
“I decided not to agree to Twitter 2.0,” Keith Yet, a Twitter trust and safety worker based in Singapore, wrote on LinkedIn on Monday. Mr. Yet worked on child sexual exploitation issues and handling legal escalations from Japan and other countries, according to his LinkedIn profile. Attempts to reach Ms. Rosenzweig and Mr. Yet were unsuccessful.
The departures come amid a wave of new tech regulation, particularly in Europe. The Digital Services Act, which will by the middle of next year require tech companies like Twitter with more than 45 million users in the EU to maintain robust systems for removing content that European national governments deem to be illegal.
The layoff announcements just keep coming. As interest rates continue to climb and earnings slump, WSJ’s Dion Rabouin explains why we can expect to see a bigger wave of layoffs in the near future. Illustration: Elizabeth Smelov
The act also requires these companies to reduce risks associated with content that regulators consider harmful or hateful. It mandates regular outside audits of the companies’ processes and threatens noncompliance fines of up to 6% of a company’s annual revenue.
Political leaders had warned that Mr. Musk’s Twitter would have to comply with EU rules. “In Europe, the bird will fly by our rules,” tweeted the EU’s commissioner for the internal market,
Thierry Breton,
hours after Mr. Musk completed his Twitter deal in late October tweeting, “the bird is free.”
A spokesman for the European Commission, the EU’s executive arm, said this week that it had active contacts with the company regarding the regulation and tackling disinformation and illegal hate speech, but declined to comment on the substance of Twitter’s compliance plans.
Activists and researchers are also concerned that the departures could undermine Twitter’s ability to block state-backed information operations aimed at spreading propaganda and harassing adversaries. The wave of departures “raises questions about how Twitter will moderate tweets and comments in a professional and neutral manner,” said Patrick Poon, an activist turned scholar at Japan’s Meiji University, who analyzes free speech.
—Liza Lin, Alexa Corse and Sarah E. Needleman contributed to this article.
Write to Sam Schechner at Sam.Schechner@wsj.com, Kim Mackrael at kim.mackrael@wsj.com and Newley Purnell at newley.purnell@wsj.com
