Google Cryptocurrency Ad Ban is Trouble for Twitter CEO Jack Dorsey
After search engine juggernaut Google decided to ban cryptocurrency advertising, following a similar ban by Facebook, Twitter (TWTR) CEO Jack Dorsey may be feeling pressured to do the same on his social media platform. Will he? (See more: Google Bans Advertising Related To Cryptocurrency Products.)
As with many industries, word of mouth is key to the success or failure of new cryptocurrencies and initial coin offerings (ICOs). Simply put, if investors don’t know that a new cryptocurrency is out there and available, that digital currency is not likely to thrive.
Investors may spend time scouring the internet for the next big craze, but there still has to be a certain threshold of awareness met before those trendy new buys can take off. As a result, Google (GOOG) and other search engines play a critical role in the success of any new cryptocurrency.
Dorsey now faces an uncomfortable dilemma. On the one hand, he is certainly feeling external pressure from Google and Facebook (FB) to crack down on misleading advertisements for products which are at best untested and at worst outright scams.
So far, Twitter has yet to step into the conversation with a determination about how it will proceed in its relationship with potential advertisers for these products.
While it might seem straightforward that Twitter would follow the example of Facebook and Google and simply ban advertisements just to cover its tracks, there is another side to the equation for Dorsey.Dorsey is also the CEO of Square Inc. (SQ), a company which recently included bitcoin trading in its platform. Square is also considering adding more cryptocurrency investments.
From his perspective as Square CEO, Dorsey is undoubtedly feeling pressure in the other direction. Allowing advertisements on Twitter for cryptocurrencies would undoubtedly boost business for the Square side of things. (See also: Square to Soar on Crypto Potential, Say Bulls.)
Crypto Shills Take Over Twitter
In the social media landscape, Twitter has become a focal point for bitcoin enthusiasts and ICO shillers. One is just as likely to find thoughtful analysis of the cryptocurrency space as one is to find gimmicky, all-caps trade tips for products which seem too good to be true.
Indeed, there are so many potentially deceptive promotional tweets that some Twitter users have become frustrated. Recently, Cornell University’s Emin Gun Sirer reached out to Dorsey to ask when Twitter would put an end to “brazen” scam posts. Dorsey responded that his team was “on it.”
However, actions have suggested differently. Facebook made a move to ban “misleading or deceptive” ads for cryptocurrencies and related products in January 2018. (See more: Facebook Bans Ads for Cryptocurrencies and ICOs.)
Twitter has yet to announce an official policy on advertisements of this kind. Some analysts suggest that making a statement of a policy of this sort would be a good start, even if it is awkward or difficult to enforce.
So far, the company has promised, via a spokesperson, to watch out for cryptocurrency-related “manipulation,” and it has even moved to suspend some accounts. However, it has yet to move broadly against the trend.
It Comes Down to Dorsey
To be fair, Facebook and Google have been unable to completely get rid of advertisements of this type, and it’s unlikely that any social media platform could fully excise these posts. Nonetheless, their strong statements and attempts to back them up are a show of priority; these two companies are interested in putting consumers ahead of revenue from advertisements. This is not a small thing, as Facebook and Google account for two-thirds of all digital ad spending across the country.
In the case of Twitter, the way forward will be almost entirely dependent upon Dorsey himself. The billionaire will continue to be pulled in two directions, with Twitter pushing him to work closely with regulators to put a damper on cryptocurrency hype. Square, on the other hand, might encourage him to bear down and head into even riskier bitcoin projects, some of which could be highly lucrative.
Even Dorsey’s own messaging on the subject has been difficult to parse out. For some, the simplest and best solution is for Twitter to seek out a new full-time CEO. One could even draw in more traditional reasons for a switch, including a slowdown in new users and disappointing ad sales. For the time being, though, it remains a stalemate. (See also: Twitter CEO Jack Dorsey Facing Calls to Step Down.)
Investing in cryptocurrencies and Initial Coin Offerings (“ICOs”) is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or ICOs. Since each individual’s situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein. As of the date this article was written, the author owns bitcoin and ripple.
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