Here’s today’s AdExchanger.com news round-up… Want it by email? Sign up here.
First Bite Of The Apple
The Justice Department published its antitrust suit against Apple on Thursday, alleging the company operates and abuses a monopoly in the smartphone market.
Do a Ctrl+F search for the word “green.” Seriously.
Because one example the DOJ highlights of how Apple degrades third-party apps and other smartphone makers is with the notorious green bubble that appears in Apple’s default messaging app when someone using a non-Apple device sends a message.
With the green bubble comes alleged “social stigma.” That’s the actual wording in the suit, although who cares, really? Teenagers, apparently – a demographic among which the iPhone has 85% market share.
And there is an antitrust argument against the green bubble. Apple’s implication that other devices have lower-quality messaging tools allegedly discourages users from switching, which serves to solidify Apple’s dominance.
The suit also demonstrates the many ways in which Apple extracts revenue from smartphones, including its 30% fee on app sales and in-app advertising revenue. Apple also takes a 30% tithe when developers upsell a product or service in their app.
Not to mention that tap-to-pay transactions incur a fee and there’s a significant new cost for credit cards. Plus, Apple gets a healthy cut from Google (more than $20 billion per year) for revenue generated through iPhone and iPad searches.
Reddit And The Google Train
Reddit shares began trading on the New York Stock Exchange yesterday.
Reddit priced its IPO at $34, a roughly $6.4 billion valuation. Shares closed the day at $51.
In addition to going public, Reddit also just signed a $60 million annual deal with Google to license its data for Google’s AI models.
“Reddit’s corpus of information is very important to the training of large language models,” COO Jen Wong said during a Bloomberg Television interview on IPO day. Sounds like Reddit could have more data licensing deals in the works.
But Google is also a major driver of other parts of Reddit’s business.
For example, as of late last year, Google has made its “Forums” search tab more prominent in product review searches, surfacing info and product advice that was previously buried in lengthy subreddits. It’s not an exaggeration to call this a Reddit pipeline.
Of the discussion forum pages that dominate Google’s search engine results page, 15,156 of the most prominent ones are from Reddit, according to SEO consultant Glen Allsopp. Quora boasts 3,455 listings, while others barely break 100.
Google Cloud and AWS are also Reddit’s tech infrastructure providers, with commitments between the two of at least $385 million from now through September 2026.
Greater Than The Sum Of Its Parts?
Is Amazon stripping Twitch for parts?
Since buying Twitch for nearly $1 billion in 2014, Amazon has white-labeled Twitch services within Amazon. The Twitch livestreaming platform, for example, became Amazon’s Interactive Video Service. No big deal, you may say. But it means that any related revenue is being credited to Amazon, rather than the Twitch subsidiary, Digiday reports.
It’s a similar story for Twitch’s ads business. In the past year, Amazon Ads has worked directly with agencies and brands that want to buy ads on Twitch, cutting Twitch out of the process. The core ads business gets much of the most desirable supply.
These things happen in the background, so the Twitch community doesn’t feel it directly. But it hurts the platform because revenue that’s earned by Twitch falls elsewhere, and ongoing investment is tied to a business’s returns. Also, keeping Twitch’s finger on the pulse of gaming and livestreaming culture gets harder as the platform becomes more Amazon-ish. Gaming isn’t Amazon’s priority.
“What was valuable to Amazon was the technology,” a former Twitch employee tells Digiday. “[Amazon] got what they wanted – they got the most valuable part.”
But Wait, There’s More!
Algorithmic anxieties. [The Rebooting]
Lyft introduces video ads into its app and strikes new measurement and targeting partnerships. [release]
Could this year be the last TV upfronts? [Next in Media]
Apple and Google brace themselves for the first full-blown investigations under the EU’s newly enacted Digital Markets Act. [Bloomberg]
You’re Hired!
Lyft hires ex-Meta marketer Brian Irving as CMO. [Ad Age]
