Apple and Facebook considered teaming up to ‘create businesses’

Apple and Facebook were once best friends. Okay, maybe that’s a bit of an exaggeration. But according to a recent Wall Street Journal report, Apple and Facebook considered teaming up between 2016 and 2018. The idea actually came from Apple, which was looking to grab some of Facebook’s revenue, according to people in the know. One such source, quoted by the WSJ, said thatApple wanted to ‘build businesses together’ with Facebook.

One of the possibilities discussed was a special ad-free version of Facebook that would be offered to iOS users from the App Store. Since it would be a subscription service, Facebook would collect revenue and Apple would get its traditional 15-30% share. But when you’re dealing with two money-driven companies like Apple and Facebook, the negotiations over who gets every penny extra get intense.

The WSJ report claims that the two companies fought over whether Apple should receive a share of so-called “boosted” posts. By paying Facebook (now Meta), the author of a post can get it seen by more Facebook users. Facebook argued that Apple would not be entitled to revenue from boosted posts. Since many small businesses use the feature to reach more potential customers, and Apple doesn’t take advertising money from developers, Facebook argued that this revenue was unrelated.

Apple, for its part, considered that the revenue generated by the boosted publications was in-app revenue from which it should be able to take 30%. With the talks coming to nothing, it was eventually agreed that the two companies should break off negotiations..

At the time the talks ended, Facebook was working on changes to improve privacy on the site. But co-founder and CEO Mark Zuckerberg decided at the time to wait before making changes in favor of user privacy, in order to maintain Facebook’s advertising business.

The camaraderie that existed between Apple and Facebook disappeared when the iPhone maker announced the introduction of App Tracking Transparency (ATT) in 2020. This would allow iPhone and iPad users to avoid being tracked by apps and websites for the purpose of receiving targeted advertisements for products they have viewed online. Mark Zuckerberg was so upset that he paid for a full-page ad in major metropolitan newspapers stating that Facebook was defending small businesses against Apple.

Apple and Meta were going in two different directions when it came to user privacy

Investors have taken notice. The market capitalization of Meta (Facebook’s new corporate name) has shrunk by $600 billion over the past year. And last month, the company reported the first quarterly year-over-year revenue decline in its history.

While Apple touts iPhone privacy, Facebook has been hit by scandals like Cambridge Analytica, which saw the personal data of 87 million Facebook users used without permission by the consultancy. Cambridge Analytica policy (whose vice president was Trump strategist Steve Bannon). The data was reportedly sold to Trump’s campaign during the 2016 presidential race and used to determine areas to spend extra money on advertising.

A spokesperson for Meta said she had “made significant changes over the past five years to protect people’s data while enabling businesses of all sizes to grow. The decisions we make are not driven by another company, but by our commitment to the people who use our products and our belief that privacy and personalization are not at odds.“. But online, is it possible to straddle that fine line between using your customers’ data to sell targeted ads, and claiming to protect their data?

And this is the story of two companies who, for a brief moment, tried to find common ground so that they could work together. But Apple’s decision to promote privacy and Facebook’s decision to continue to exploit personal data to help serve targeted ads have taken the two companies in opposite directions. It is not surprising that an agreement could not be reached.

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