October 21 (Reuters) – Former US President Donald Trump announced his return to the digital world with the planned launch of his own social media app as he vows to “stand up to Big Tech” after being banned from main platforms.
The app, TRUTH Social, will be created by a new company formed by the merger of Trump Media and Technology Group and a Special Purpose Acquisition Company (SPAC), according to a press release they released on Wednesday.
The company could provide the first real test of the power of right-wing social media with all the strength of Trump’s backing. Questions remain about how he plans to make money and avoid the same issues that have led Twitter Inc (TWTR.N), Facebook Inc (FB.O) and Alphabet Inc (GOOGL.O) YouTube to prohibit or suspend it.
Here is an explanation of Trump’s business.
What is the goal of the Trump Media and Technology Group (TMTG)?
In a presentation to investors, backers of the new company said TMTG aspires to create a media powerhouse to “compete with the liberal media consortium” and “fight the big tech companies in Silicon Valley.” During his presidency, Trump lashed out at major media outlets and called journalists “enemies of the people.”
The company has said it wants to create a “non-cancellable” global community – comprising a social media platform, a streaming service, a news division and an alternative cloud provider – to compete with established players. in those categories, from Twitter to Disney + to CNN to Google Cloud. He said a streaming service, TMTG +, promises “news, big tent entertainment, exciting documentaries, sports programs and more.”
Donors have not developed a pricing or income generation plan.
The TRUTH Social app is available for pre-order from the Apple App Store, a sign that its funders plan to distribute it through conventional channels.
How do PSPCs work?
A PSPC is a shell company that raises funds as part of an IPO to merge with a private company which then becomes publicly traded. SPACs have become a popular alternative to IPOs for companies, providing a way to go public with less regulatory control and more certainty as to which valuation will be achieved.
Shareholders of SPAC, Digital World Acquisition Corp (DWAC.O), will be asked if they wish to repurchase their shares for their IPO value when the merger is near completion. If they do, they will reduce the $ 293 million in cash that PSPC has available to give to Trump’s company.
What are the chances of success for TMTG?
Trump drew a large following on social media before being permanently banned from Twitter and suspended by Facebook and YouTube. His @realdonaldtrump Twitter account had 88.7 million followers. Trump has struggled to gain traction online since leaving office in January. He disconnected his blog – titled “From the Desk of Donald J. Trump” – after 29 days.
Other conservative online businesses have failed to attract huge audiences.
Gettr, a social media app launched in July by former Trump spokesperson and senior advisor Jason Miller, has reached around 2.2 million installs globally on the App Store and Google Play, according to Sensor Tower.
The social media and streaming platforms, media and web hosting services that TMTG seeks to challenge are well established and well funded.
TMTG may have a hard time finding a web host if it becomes a source of violent rhetoric. Speak, the app backed by prominent Republican Party donor Rebekah Mercer, went offline for about a month after Amazon.com Inc (AMZN.O) suspended its web hosting services after the January 6 at the United States Capitol by Trump supporters. Google has also removed Parler from its app store. Talking came back online in February with Los Angeles-based private cloud infrastructure SkySilk.
Since Parler came back online – on the App Store, not Google’s Marketplace – it has attracted just over 100,000 installs, according to Sensor Tower.
What kind of speech is TMTG going to ban?
It will not make fun of Trump or his people. According to its conditions of use, as a user of the site, it undertakes not to “denigrate, tarnish or harm, in our opinion, to us and / or to the site”.
Report by Helen Coster in New York; Additional reporting by Steve Holland in Washington; Editing by Will Dunham
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