Twitter has resumed making payments to Google Cloud, a subsidiary of Alphabet, according to an insider familiar with the matter. This development follows a previous report by Platformer, which stated that Twitter had chosen not to settle its bills with Google Cloud during contract renewal. Linda Yaccarino, the new CEO of Twitter, played a crucial role in restoring the relationship between the two companies. As a result, Twitter and Google are now exploring the possibility of expanding their partnership. This potential collaboration would involve Google increasing its advertising expenditure on Twitter and utilizing the social media platform’s data access tool.
Cost Reduction Measures and Legal Challenges
Since Elon Musk acquired Twitter in October, the company has been focused on implementing cost reduction measures. However, these measures have led to legal challenges for Twitter, as landlords, vendors, and consultants have encountered unpaid invoices. Despite multiple requests for comment, Twitter has not responded, while a spokesperson from Google has declined to provide a statement.
Impending Contract Expiration
The disagreement between Twitter and Google Cloud is primarily rooted in the impending expiration of their contract. The failure to settle Google Cloud bills could have serious consequences for Twitter’s trust and safety teams, although the specific impact remains undisclosed. Negotiations to revise the contract have been ongoing since at least March, as reported by The Information.
Twitter’s Infrastructure and Cloud Platforms
To host its services, Twitter relies on a combination of its own servers and cloud platforms from Amazon and Google, as outlined in the Platformer report. In March, it was revealed that Amazon had notified Twitter about withholding advertising payments due to outstanding bills for cloud computing services provided by Amazon Web Services.
Musk’s Cost-Cutting Measures
Upon Musk’s involvement, Twitter implemented substantial cost-cutting measures, resulting in a significant reduction in its workforce. Reuters reported in November that Musk instructed the company to reduce infrastructure expenses, including cloud service expenditures, by $1 billion.
Compensation for Content Creators
In a recent announcement, Musk stated that Twitter would begin compensating content creators for ads displayed within their replies, with an initial block payment of $5 million. However, this compensation will only be provided to verified creators, and ads served to verified users will be taken into account.
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