General Motors will pull ads out of Twitter after Musk acquisition
General Motors is taking a break from Twitter announcements as rival Tesla CEO Elon Musk takes control of the social media platform.
The automaker released a statement on Friday following Musk’s purchase over Twitter on Thursday.
General Motors revealed that it is implementing the advertising break while the company assesses the situation on Twitter.
The country’s biggest automaker confirmed that it will continue using the platform to interact with customers but will not pay for advertising.
“We are engaging with Twitter to understand the direction of the platform under their new ownership,” General Motors said in a statement.
“As is normal course of business with a significant change in a media platform, we have temporarily paused our paid advertising.”
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The Tesla CEO and founder finally bought out the social media platform on Thursday night after six months of negotiations.
Before finalizing the deal, Elon Musk was worried about the potential loss of ad revenue.
He then sent a letter to advertisers on Thursday to reassure them.
Musk says he doesn’t want Twitter to become a “hellscape” where anything can be said without consequences.
However, he initially promised to reconsider the platform’s content moderation policies and strengthen freedom of expression.
“Fundamentally, Twitter aspires to be the most respected advertising platform in the world that strengthens your brand and grows your enterprise,” Musk said in a letter.
“Let us build something extraordinary together.”
The social media platform’s revenue comes mainly from advertising.
Advertisements generated 92% of Twitter’s revenue in the second quarter.
Dan Ives, a technology analyst at Wedbush Securities, said it would be disastrous for the company if advertisers were scared off by Elon Musk’s Twitter ownership.
“It sends an ominous signal,” said Ives. “GM [General Motors] is the first, but it’s not going to be the only one.”
“We have to wait and see if there’s a wave. On the day that Musk closes the deal, it’s not the news he wanted to hear.”
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General Motors currently competes with Tesla (Elon Musk’s company) for car sales.
The company is struggling to sell electric vehicles and lags behind Tesla in overall electric vehicle sales in the United States.
So far this year, electric vehicles have only accounted for about 1% of General Motors sales in the United States.
Additionally, the company has ambitious growth plans for electric vehicles and revealed plans to stop selling gasoline-powered vehicles by 2035.
However, Twitter is unlikely to support Tesla financially, as the company loses hundreds of millions of dollars every quarter.
Tesla is still profitable despite the company’s disappointing quarter.
Dan Ives says it can’t be ruled out that part of General Motors’ decision to make the announcement was a shot across the bow at Musk.
“It shows how they view Tesla as a competitor in the EV space,” he said.
Ives also noted that if more advertisers continue to monetize Twitter, it won’t just be automakers.