Twitter Keeps Durban on Board; ‘Buy Now, Pay Later’ Purchases Soar to USD$120bn

by Hannah Dillon on 3rd Jun 2022 in News

In this weekly segment, ExchangeWire sums up key industry updates in media, marketing, and commerce from around the globe. In this edition: Twitter acts against shareholders to keep Egon Durban on its board; global 'buy now, pay later' purchases skyrocketed in 2021; Ofcom urges tech firms to do more to protect women online; and Qualcomm contemplates joining its rivals to purchase SoftBank's Arm.

Twitter refuses to remove Silver Lake’s Durban from its board

Social media giant Twitter has refused to dismiss Egon Durban from its board despite the company’s investors voting against his re-election at last week’s shareholder meeting.

On Wednesday (25th May), 43% of Twitter’s shareholders voted against Durban’s re-appointment following concerns that the private equity investor sits on too many boards. These concerns were initially raised by Institutional Shareholder Services (ISS) and Glass Lewis, two prominent shareholder adviser organisations. ISS reported that Durban currently holds a seat on seven public boards.

In accordance with Twitter’s corporate governance guidelines, Durban offered his resignation following the vote. A regulatory filing issued by the social media giant on Friday (27th May), however, revealed that Durban’s resignation had not been accepted.

Instead, the filing revealed an agreement allowing Durban to reduce his board commitments to no more than five public company boards by 25th May 2023.

“The board considers Mr Durban a highly effective member and believes that he brings to the board an unparalleled operational knowledge of the industry, a unique perspective, and an invaluable skill set and experience with mergers and acquisitions,” the filing said.

Durban, co-CEO and managing director of private equity firm Silver Lake, was amongst the first people Elon Musk contacted ahead of his offer to purchase the company for USD$44bn (£34bn) and was on the board when it unanimously approved the acquisition in April.

Global buy now pay later purchases hit USD$120bn in 2021

New findings from GlobalData have revealed that global buy now, pay later (BNPL) purchases rose to USD$120bn (£95bn), an almost four-fold increase from USD$33bn (£26bn) in 2019.

The analytics and consultancy firm’s report showed that BNPL purchases were responsible for 2.3% of worldwide ecommerce last year, indicating the service’s soaring popularity over the last two years. Companies such as Zilch, Afterpay, and Klarna saw demand for their services boom during the coronavirus pandemic, as consumers turned to online shopping en masse. Data from CNBC suggested that younger consumers in particular drove this growth for BNPL services.

Chris Dinga, payment analyst at GlobalData, commented, “This rapid growth was down to an increasing number of merchants accepting these solutions,” adding, “There have been some huge partnerships with ecommerce giants such as Amazon and Shopify, opening up a whole new world of consumers.”

GlobalData’s findings, however, come as BNPL companies are bracing themselves for regulatory crackdowns in the UK. Both the Treasury and Financial Conduct Authority are understood to be moving towards implementing stronger consumer protection measures within the coming months. Klarna has pre-empted this tighter regulatory framework by implementing new measures meaning use of its service could impact consumers’ credit scores. The Swedish company has also slashed its workforce by around 10% in an effort to protect its profits amid a global economic downturn.

Big Tech must do more to protect women - Ofcom

A report from Ofcom has led the media regulator to conclude that tech companies must do more to protect women online.

A survey of over 6,000 UK adults conducted by the regulator found that women are more likely to experience abuse or see harmful content online, and that only 42% of women feel comfortable speaking freely in online spaces.

Ofcom’s chief executive, Dame Melanie Dawes, said that tech firms should prioritise the safety of users over revenue, stating, "Look at your algorithms. Too many companies prioritise growth and revenue over user safety and don't actually think about the impact on the front-line user."

Dawes also appealed to tech companies to proactively involve female members of staff in the development of platforms and services, adding that it would be "much, much harder" to "retro-fit" safety measures.

The report from the communications regulator swiftly follows the introduction of the Online Harms Bill, which obligates tech companies and social media platforms to protect users from harmful online content. Under the bill, which is now at committee stage, Ofcom will regulate social media platforms and have the authority to fine companies who fail to comply with new legislation.

Qualcomm contemplates partnering with rivals to buy Arm

US chipmaker Qualcomm has detailed its aspirations to purchase a stake in SoftBank’s Arm alongside a consortium of its rivals. The semiconductor company, which is one of Arm’s largest licensees, expressed that sharing the UK chip designer would allow it to enable neutrality.

Speaking to Financial Times, Qualcomm chief executive Cristiano Amon expressed that the San Diego-based company was keen to invest in Arm and would contemplate a truce with other chipmakers to buy the firm from SoftBank entirely.

"It's a very important asset and it's an asset which is going to be essential to the development of our industry," said Amon.

This latest development reveals Qualcomm as the latest of numerous companies to express an interest in owning at least a stake in Arm. Back in March, co-CEO of Korean chipmaker SK hynix Park Jung-ho told the company's shareholders that it was contemplating creating a consortium to buy Arm.

"We are reviewing possibly forming a consortium, together with strategic partners, to jointly acquire it," Park Jung-ho reportedly commented.

After years of low returns, Arm’s annual revenue for 2021 was reported at USD$2.7bn (£2.1bn), a 35% leap from 2020. The chipmaker’s licensing business also saw its revenue soar by almost two-thirds, with royalties increasing to USD$1.5bn (£1.1bn).